By Manny Piñol
Secretary of Agriculture
“Cash Advance,” a byword among agriculture stakeholders during the planting season will soon be an institutionalized intervention for farmers to liberate them from loan sharks and increase their production.
In many farming areas all over the country, the absence of credit programs has pushed farmers and fisherfolks to loan sharks and local traders who give them “Cash Advances” at atrocious interest rates and who also corner the farmers’ produce during harvest time buying it at prices they dictate.
The “Cash Advance” is usually used in buying seeds, fertilizers and other farm inputs, also to pay for labor, including personal needs like tuition fees for their children and at times payment for hospitalization.
As a farm boy myself, I saw this “monster” gobble up the dignity of the farmer who literally has to beg for the “Cash Advance” and which also has wrapped him in eternal hand-to-mouth-existence and poverty.
On Friday, during the first Coordinative Meeting convened by the Department of Agriculture in Davao City which included the National Food Authority (NFA), the PhilRice, the PhilMech, the Regional Directors of DA and the Rice Program Coordinators, I directed the Agricultural Credit Policy Council (ACPC) to work with NFA on the guidelines to implement the “Cash Advance” Credit Program for rice farmers.
I issued the directive in response to the problems raised by many rice farmers who said that they could not deliver their produce to the NFA, even if it offers a higher price, because they have borrowed money from the local traders and financiers at very high interest rates.
The DA-ACPC/NFA “Cash Advance” Program will just be a variant of the highly-successful Production Loan Easy Access (PLEA) which lends to farmers, fishermen and their wives funds up to P50,000 at 6% interest.
Here are the proposed features of the “Cash Advance” Program:
1. It will only be available to Rice Farmers, including tenants with the consent of the landowners, who will sell their produce to the NFA;
2. There will be “No Collaterals” with a “Service Fee” of 3% payable after every harvest or in six months. Meaning, if his “Cash Advance” is P50,000, he will only pay a “service fee” of P1,500 which is a far cry from the 10% per month interest rates imposed by loan sharks and local traders;
3. The farmer could register individually and does not have to belong to a cooperative or association but he will have to be registered in the program and issued a “Cash Advance” booklet to record his borrowings and payments;
4. The DA-ACPC through its Information and Communications Technology Service (ICTS) will conduct a geo-tagging and aerial mapping identifying the exact location of the “Cash Advance” applicant’s farm and other details. All these data will be inputted in a program which when accessed by DA-ACPC/NFA “Cash Advance” Program will indicate all the interventions given to him.
5. The DA-ACPC and ICTS will also update the registry of all rice farmers in all rice producing areas of the country in preparation for future applications for inclusion in the “Cash Advance” Program.
Given the 97% repayment rate of the PLEA, I believe this “Cash Advance” Program of DA-ACPC/NFA will be another innovation which will increase farmers’ production, liberate him from loan sharks and lift him up from poverty.
The “Cash Advance” Program will be implemented as soon as the guidelines are formulated.
(Attached photos were downloaded from public websites.)
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