DA to hike formal borrowings of farmers

MANILA, Philippines - The Department of Agriculture (DA) is targeting to increase the formal borrowing of fishermen and farmers to 61 percent by 2016 from 52 percent in 2007, a top DA official said.

In his speech during the 60th Annual Convention of the Rural Bankers Association of the Philippines, Agriculture Secretary Proceso Alcala called on rural bankers’ cooperation to accomplish this goal.

“In particular we wish to invite the greater participation from our rural banks in a number of innovative financing programs we implement under the AFMA-mandated Agro -Industry Modernization Credit and Financing Program (AMCFP),” he said.

Part of this program, Alcala said is the utilization of special time deposits which is directly deposited by DA to partner cooperative banks and cooperative rural banks.

This loan is not coursed through wholesalers thus beneficiaries benefit from lower interest rates of not more than 15 percent per annum.

In 2012, loans released under the AMCFP increased 146 percent compared to 2011, and reached up to P1.12 billion.

This year, DA provided an additional P1 billion for the implementation of a new program under the AMCFP.

The objective of the program is to increase production and income of the farmers to meet food self-sufficiency targets.

This program, Alcala said, would be offered to conduit or depository banks. “We hope you could participate in this program,” he said.

The DA is also one of the pillar of the Agriculture Guarantee Fund Protocol (AGFP) which was created in 2008 to encourage banks to lend to the agriculture sector.

The AGFP, he said, provides guarantee coverage for unsecured loans extended by institutions and other lending conduits (such as rural/cooperative banks) to small farmers engaged in rice and/or food production projects.

“We are happy to note the increasing participation of rural banks in the AGFP.

To date, he noted that there are 118 rural banks that participated in the program. This represents only 21 percent of the total rural bank group.

“That is why we encourage more participation in this endeavor,” he said.