Thailand's finance minister Korn Chatikavanij has asked the Bank for Agriculture and Agricultural Cooperatives to expand its Weather Index insurance programme to help ease the impact of drought on farmers.

BAAC president Luck Wajananawat on March 8 said the programme, provided by Sompo Japan Insurance (Thailand), to mitigate farmers' drought-related losses covered only rice and corn growers in five provinces, including Khon Kaen and Nakhon Ratchasima. So far, fewer than 1,000 farmers have joined the programme, the first of its kind in the world.

"We need to consult the firm on the expansion of the scale," he said, adding that the issue should be finalised in two months so that it covers this harvest season.

Since drought is expected to be more severe this year, due to global warming and the El Nino phenomenon, the bank is preparing to offer short-term loans worth 30,000 baht (US$917) to each orchard owner to cover the purchase of water.

Businessmen and farmers nationwide are crying foul over water shortages.

Ongart Kittikhunchai, president of the Chiang Mai branch of the Federation of Thai Industries, is seeking a master plan to ease drought and improve irrigation in the next five to 10 years, because farmers and related manufacturing industries are the most badly hurt by this natural phenomenon.

At present, only 53 million cubic metres of water, or 20 per cent of its capacity of 263 million cubic metres, remain in the Mae Kuang Dam in Chiang Mai. In the Mae Ngad Dam, water reserves have reached 190 million cubic metres, or 74 per cent of its 265 million capacity.

Suthep Noipairote, chief of Chiang Mai's Irrigation Office 1, said despite the ample supply, water was being allocated cautiously, because this year's dry season is expected to be longer than usual.

He said that if the water was distributed lavishly and the rains did not come in May as expected, tap water could be affected, thereby hitting Chiang Mai's economy and tourism industry.

Panit Charoenboon, Chiang Mai's agricultural chief, said there were no reports yet of agricultural damage in the province but that drought was estimated to affect 10 per cent of the second rice crop covering 95,000 rai this year.

However, farm crops should not be affected, because the harvest already started late last month.

Somkid Khangrang, director of the Sirikit Dam, said the 6.2-billion cubic metre dam could release only 1.415 billion cubic metres, the lowest in 10 years. While attributing the dryness to climate change and forest encroachment, he urged rice farmers to be aware of damage if they proceeded with planting the second crop.

Meanwhile, eight districts of Surat Thani province have been named disaster areas, covering more than 30,000 farmers. Governor Damri Boonjing allocated 1 million baht ($30,602) to each district and is now pinning his hopes on an artificial rainmaking project that will kick off next Monday.

The Royal Irrigation Department's Phuket office recently allocated 41 million baht ($1.25 million) for the dredging of two mines - a job that should be completed before the rainy season. Veerawat Angsupanich, chief of the irrigation project, said water reserves for the production of tap water in the province were sufficient and that if the rains came in May, there should be no shortage.

Some ponds on the island have become shallow, and the Phuket administrative body must transport water to some villages.

Yala Governor Krisda Boonrad said his province had enough water for consumption and irrigation, thanks to the Bang Lang Dam, which now contains 1.4 million cubic metres. However, areas not covered by the dam are suffering from drought.

"Everyone should consume water cautiously," he said, adding that few farmers in the province had planted a second rice crop.