THE nation depends on farmers for food. And farmers have to survive in the harsh environment that nature provides. While the Philippines is a tropical country with plenty of rich topsoil in its mountains and plains, our farmers still need financing to be able to adequately perform and produce better crops. They need good quality seeds, both organic and inorganic fertilizers, farm machinery, pesticides and other farm inputs. And all these cost money.
While the Agri-Agra Law requires all banks to lend 25 percent of their total loan portfolios on the countryside (15 percent for agriculture and 10 percent for agrarian reform projects), many commercial banks do not comply. They would rather pay penalties of almost P2 billion a year just to dodge the law that seeks to scale up agriculture.
Instead of lending to agriculture, which ramps up physical production, the banks buy government securities or T-bills, which only help shore up the usual deficit spending of the government to pay for public services. Banks would rather give loans to condominium developers than to farmers because, they say, they are more assured of repayment.
‘… there is no recognition and assistance more palpable than giving them easy access to financing.’
In the case of agrarian reform beneficiaries, even if they already own the lands they till, without financing and other support services, what they own are just pieces of paper called Certificate of Land Ownership Award, but these cannot produce anything and are not effective negotiable instruments.
It is thus a big deal for rice farmers when President Ferdinand Marcos Jr. on Friday unveiled the government’s low-interest credit line that rice farmers can use to buy seeds, fertilizers, pesticides, and other farm inputs. On his 67th birthday, the President launched in Nueva Ecija the Department of Agriculture’s “Agri-Puhunan at Pantawid Program (APP)” and oversaw the distribution of 9,832 certificates of condonation with the release of mortgage (Cocrom) covering P277 million in debts of land reform beneficiaries.
The President led the distribution of “intervention monitoring cards” to select rice farmers in Guimba and Palayan City in Nueva Ecija, which can be used to access low interest loans to purchase farm inputs and pay for services from accredited merchants.
The APP program offers a combination of low-interest loans and a monthly subsistence allowance for rice farmers, using an initial funding of P3 billion from the Department of Agriculture and the Development Bank of the Philippines. For the dry cropping season, the APP will open credit lines to farmers and cooperatives behind 50,000 hectares of rice in Luzon. It targets to reach rice farmers tilling 1.2 million hectares nationwide.
A rice farmer tilling one hectare of farmland will receive P58,000. This includes an P8,000 monthly subsistence allowance to be given for four months, and a P14,500 government subsidy per hectare.
“I am aware that despite the government’s programs, many of you are still struggling and are forced to take on loans with high interest rates just to buy seeds, fertilizers and pesticides,” the Chief Executive said.
He assured farmers that the government will continue promoting the welfare, rights and improvement of the agriculture sector. He said farmers should be recognized and aided as they carry out their role in ensuring food security for the country. To this, we may add that there is no recognition and assistance more palpable than giving them easy access to financing.
