By Manny Piñol
Baguio City (Late Post) – The Department of Agriculture (DA) through its credit agency, the Agricultural Credit Policy Council (ACPC), will establish starting this month Loan Facilitation Teams (LFT) in every province which will be tasked to assist farmers, fishermen and other agriculture stakeholders who would like to avail of the government’s loaning program.
The Agricultural Training Institute (ATI), the education and extension agency of the DA, will also conduct Financial Literacy Workshops for farmers, fishermen and members of cooperatives and associations who would like to avail of the Easy Access Financing of government.
These were the two major moves agreed on during the one-day workshop of top officials of the Agriculture Department and its line agencies as it slowly shifts its production support programs from subsidies to easy-access financing.
In my message to the officials of the DA at the opening of the one-day activity, I said that government should facilitate the access to credit of farmers, fisherfolk and other agriculture and fisheries stakeholders.
The loaning programs of government in the past recorded very low accessibility rate because of the stringent requirements and voluminous documents required from the poor and often unschooled farmers and fishermen.
The Loan Facilitation Offices, whose locations in the provinces will be published soon, will assist the farmers and fishermen, associations and cooperatives in complying with all the requirements.
“Ideally, after we have validated the identify of the loan applicant and the association that he belongs to, all that he needs to do should be just a sign a piece of paper so he could avail of a loan. All documents must be prepared by the Loan Facilitation Team,” I told DA officials in Baguio City last Friday.
This move from subsidies to Easy Access Financing follows the approval by President Rody Duterte of my recommendation that the DA should start abandoning its seeds, fertilizer and farm machinery and equipment subsidies program which has been marked with issues of corruption and slow implementation over the years.
The most prominent of these subsidy anomalies was the Fertilizer Scam where under the pretext of buying fertilizers for farmers billions of pesos were released to the different Congressional Districts and Local Government Units, including those in Metro Manila.
My recommendation was based on the following observations and validations I made during the two years that I served as Agriculture Secretary:
1. Government procurement process for seeds, fertilizers, farm machinery and equipment and post-harvest facilities for the fisheries sector is slow and prone to corruption.
2. Due to the tedious and long bidding process, seeds are often delivered when the planting season is over and the germination percentage has gone down.
3. The Lowest-Bidder rule in government procurement also prevents agriculture stakeholders from choosing the best seeds or equipment for them. This process also results in the procurement of low-quality equipment.
4. The Subsidy Program is vulnerable to interference by local political leaders who more often than not would make sure that seeds, fertilizers and equipment are given to their political supporters while their political enemies are left with nothing.
5. Seeds, fertilizers, equipment and machinery given out as subsidies by government often end up being sold by the beneficiaries because of they do not have a stake in the grants.
6. The yearly grants and subsidies to support farmers and fisherfolk bleed the government dry with billions of pesos allocated every year which could not be recovered anymore.
On the other hand, a low-interest, easy access financing program to be implemented by the DA through ACPC is expected to have the following benefits:
1. Efficient and fast procurement by farmers of whatever they need for their production, including the freedom to choose whatever variety of seeds, brand of fertilizer and kind of equipment they need in their farms;
2. It will reduce political interference and corruption in the bidding and procurement process;
3. It will instil in the farmers and fisherfolk and loan beneficiaries the sense of ownership, thus reducing the risk of the seeds, fertilizers and equipment from being sold;
4. It will allow government to recover whatever it allocates for the loaning program every year thus saving billions of pesos which could be pumped back into the program;
5. This program would give the beneficiaries the sense of pride because they will no longer have to line up and beg for support from government every time the planting season comes.
This approach will surely increase productivity in agriculture and fisheries and reduce poverty in the countryside.
(First photo shows Malimono, Surigao del Norte farmers and fisherfolk proudly holding their DA Monitoring Cards issued after their training for rural credit. Other photos show DA officials during the one-day workshop on Education and Extension Services in Baguio City on Friday. Photos by ACPC, DA-AFID and DA CAR RAFID.)
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