Farmers now get easy access to credit – DA

The Department of Agriculture (DA) has officially launched its easy access loan program starting in Surigao del Norte, aimed at improving the country’s lending for the agriculture sector.

Through its Production Loan Easy Access (PLEA), the DA issued the first batch of loans to 247 farmers in Malimono in Surigao del Norte to increase agriculture productivity and address rural poverty.

The initial batch of farmers has been issued their Juan Magsasaka ID card, which will serve as a “virtual credit,” and will allow them to borrow from P5,000 to P25,000 without any collateral and a six percent annual interest payable in at least two years.

“The credit program, which I personally conceptualized and referred to our rural credit experts for refinement, aims to address the age-old problem of farmers and fisher folks for capitalization to finance their farming and fishing activities,” Agriculture Secretary Emmanuel Pinol said.

The lending program will be available through local cooperatives and rural banks and the maturity will depend on the kind of agricultural commodity.

For cash crops like rice, corn and vegetables, the loan maturity will be two years while high value crops like coffee, cacao, coconut and banana, the loan maturity will be between five and eight years.

While the government has passed the Agri-Agra Law which compels local banks to allocate 25 percent of their loan portfolio for agriculture and fisheries, Pinol said financing institutions have always considered farmers and fishermen as unreliable borrowers.

“Almost all of these banks preferred to pay the fine imposed by law rather than extend loans to farmers and fisher folks,” Piñol added.

The loan program, which is the proposed flagship lending program of the DA with a P50-billion allocation for next year’s budget, is expected to be fully implemented nationwide by 2018.

Apart from increasing agricultural productivity, the program also aims to reduce and eventually eliminate the dependency of farmers on government subsidies and dole outs and contribute to the administration’s target of reducing national poverty by end-2022.