Landbank urged to advance funds to farmers

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The Federation of Free Farmers (FFF) called on the Land Bank of the Philippines (Landbank) to advance funds for lending to farmers under the Agricultural Competitiveness Enhancement Fund (ACEF) credit program.

The group said in a statement P3.5 billion worth or loan applications are on hold while the Department of Agriculture (DA) looks for money to replenish the depleted funds.

The group said as of June 2020, the Department of Budget and Management (DBM) has released P4.16 billion for small farmers credit through Landbank which is equivalent to 80 percent of the ACEF fund balance of P5.15 billion in May 2018.

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“The DA can replenish whatever Landbank has advanced and even pay its interest, once additional ACEF funds become available,” said Raul Montemayor, FFF national manager.

Last week, the DA said it transferred to Landbank an additional P1.44 billion for lending to farmers, fisherfolk and agripreneurs under the ACEF program.

“The fresh fund augments the previous P4.495 billion the DA has cumulatively entrusted to Landbank, being the administrator of the ACEF lending program. Hence, to date it has a total portfolio of close to P6 billion,” Agriculture Secretary William Dar said in a statement.

Dar added the DA will request the DBM to release another P2.1 billion ACEF money for credit.

FFF said Landbank can be proactive by advancing funds for the ACEF program in the meantime, noting that only about 5 percent of the bank’s loans actually go to small farmers and their organizations every year.

Under the ACEF Law, tariff collections from imports of certain agricultural products are to be placed in a special fund, of which 80 percent are earmarked for lending to small farmers and agricultural enterprises. The remaining 20 percent are then equally allocated for technology promotion and scholarships.

“We understand that the bank has to generate income from large corporate loans to cross-subsidize its credit programs for small farmers, which are riskier and more expensive but the bank will better serve its original purpose by allocating more funds and taking some risks to help small farmers, even if this means less profits,” Montemayor said.

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