By Manny Piñol
President Rody Duterte hit it right on the mark when he called the attention of the country’s biggest agricultural bank, the Land Bank of the Philippines, to return to its original mission of helping the country’s agriculture and fisheries stakeholders get easily accessible credit.
Saying that the LandBank has rambled on missing its real mission of helping farmers, the President said that the bank should find ways of releasing the loan funds in a more expeditious manner.
While I sit in the LandBank as a member of the board representing the Department of Agriculture, I have to admit that the President was right in his observation.
Through the years, the LandBank has metamorphosed from a “missionary” agricultural bank, whose role was to spur growth in the agriculture and fisheries sector, into a universal bank which has more commercial loan accounts than those granted to the agriculture sector.
In fact, borrowing money from LandBank is difficult for the ordinary farmer and I know that for a fact.
Ask the big rice traders where they borrow money by the millions to be used in buying the produce of farmers at the start of the harvest season and they will tell you that most of them get the loans from LandBank at 6% interest per annum.
Ask the rice farmer where he borrowed P20,000 he used in buying seeds, fertilizers and farm inputs and he will tell you he got it from the rice trader who imposes a 10% monthly interest for a period of four months.
At the end of the harvest season, the trader pays back his loan from LandBank in full but the farmer, if the harvest fails, ends up drowning in the usurious rate of his loan repayment.
A friend once said that the reason for the lack of access of farmers and fishermen to credit was that out of the 18 or so list of questions asked by the banks from prospective borrowers, the farmers could only answer two – 1. What is your name? and 2. Where do you live?
Of course, that is an exaggeration meant to emphasize how difficult it is for the poor and mostly unschooled farmers and fishermen to get loans from formal lending institutions.
The absence of credit in the rural areas is what exacerbates poverty in the farming and fisheries sector.
This is precisely the reason why the DA through the Agricultural Credit Policy Council, a credit policy agency attached to the DA, has designed easy access credit programs to serve the small farmers and fisherfolk.
The credit does not require collaterals and imposes a 6% interest which actually goes to the conduit Rural Banks or farmers credit cooperative or association.
And contrary to the belief that farmers and fishermen do not pay back their loans, the ACPC has reported a 96% repayment on loans already granted under the Duterte Administration amounting to about P1-B.
In fact in the Cordillera, vegetable farmers have posted a 100% repayment record for the P46-M loan facility granted by ACPC.
The President’s statement is a wake up call and all government lending institutions must heed the appeal.
When easy credit is given, there will certainly be a sudden upsurge of economic activities in the countryside and productivity will increase while poverty will be reduced.
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