Burmese junta authorities in Arakan State are gearing up to buy rice from farmers this paddy season and are disbursing loans to farmers during the cultivation, said a village clerk. The junta will buy rice against the loan from farmers after harvesting.

"The township authorities told us to find out who needed loans to cultivate this rainy season. The government will give 130,000 Kyat for 100 baskets of paddy to farmers as loan," he said.

The amount from the government is somewhat lower than the availability in the private market in Arakan State. In local markets farmers receive 150,000 Kyat as loan for 100 baskets of rice.

"Some farmers in our village are interested in the government's offer price, and they can get a loan from the government for their farms," he said.

According to the system, farmers will have to repay the loan to the government in he form of paddy after the harvesting is complete.

During last year's paddy season the authorities in Arakan State did not distribute such loans to Arakanese farmers but they are reportedly doing it this year out of fear of a shortage of rice next year.

A source said that this year the paddy production in Burma will decrease because farmers in the Irrawaddy Division have been unable to cultivate after Cyclone Nargis lashed the region.

"The plan is to procure rice for next year and the authorities are likely to collect rice from farmers in Arakan State one way or the other," the clerk said.

A source from Maungdaw, a western border town of Burma, said that the township authorities invited village chairmen to Maungdaw on Monday to detail the government's plan to distribute loans to farmers and told them to arrange the loans for farmers in Maungdaw Township.