DA sets aside P4B to spur rural productivity

The Department of Agriculture (DA) has set aside P4 billion to spur agriculture productivity in the countryside which may be severely affected by the phase-out of its credit programs.

Agriculture Secretary Leonardo Montemayor said the fund will serve as a safely net to cushion the impact of a lack of credit facility for farmers and fishermen.

Montemayor said the safety net includes a P3.21-billion allocation for the Agro-Industry Modernization Credit and Financing Program (AMCFP) and the Agriculture and Fisheries Credit Guarantee Fund.

He said the agriculture department’s credit and policy council had approved the AMCFP, requiring the Land Bank of the Philippines and the Quedancor to implement the credit program.

Among the other credit programs serving as safety net are the P350-million rediscounting facility of the Land Bank of the Philippines; and a P123.9-million wholesale guarantee facility from the Quedan and Rural Credit Guarantee Corp.

"These safety nets are in line with President Arroyo’s directive to help spur growth in the countryside by ensuring the continuous flow of credit to the farming and fisheries sector at more affordable costs to the rural folk," Montemayor said.

"The administration of AMCFP, for instance, with decades of track record in credit management is expected to ensure continued loaning access by those needing credit," he added.

Montemayor also urged other banks, and non-government organizations to "derive additional liquidity for agricultural and fishery loans from the administrators of AMCFP, depending on your preferences."

Another alternative, he said, is the AFCGF, which will be overseen by Quedancor pursuant to the Agricultural and Fisheries Modernization Act (AFMA).

Montemayor explained that while AMCFP is still on the drawing board, the agriculture department has already developed innovative financing schemes to meet the credit needs of small farmers and fisherfolk.

"These farmers and fishermen who have viable projects but lack collateral need this facility most," he said. "This is the only alternative we have to keep the inflow of cash into agri-business.

"One feature of the innovative financing scheme is that it is a credit, rediscounting and guarantee facility designed to reduce agri-lending risk and induce the flow of funds from private, urban-based banks to small farmers and fisherfolk," he added.