No more farm subsidies by 2021 — DA

The Department of Agriculture (DA) is scrapping government subsidies in the farm sector and shifting to low-interest financing program by 2021.

Agriculture Secretary Emmanuel Piñol said the government would continue to focus on easy access credit which is more sustainable and effective and will lessen corruption.

“Our target is that by 2021, we will be fully out of subsidies. Every production program will be available on easy access financing, from seeds, fertilizers and equipment, Piñol said.

“The subsidy program has been plagued with controversies and big issues of corruption. It used to be a political decision that bleeds government dry every year,” he added.

It is estimated that P30 billion to P40 billion annually is being allocated for production support.

“All of that money is being given away without a chance of recovery. And that is the reason why our economic managers are stingy in providing funds for agriculture because they feel like we are just wasting our money,” Piñol said.

The agri chief said scrapping subsidies would work to the advantage of both stakeholders and the government.

“This will level the playing field as everybody will now have access to the things they need in the farm without political interventions and corruption,” he said.

Next year, DA is asking for up to P10 billion in its budget to be allocated for its lending program.

“The DBM (Department of Budget and Management) likes this idea that DA is able to recover its investments and plow it back to the same program,” Piñol said.

Currently, DA’s loan programs posted an average repayment rate of 96 percent nationwide.

DA has four major lending programs namely Program for Unified Lending to Agriculture offered to borrowers in the poorest provinces of the country; Production Loan Easy Access with an annual interest rate of six percent; Survival and Recovery Loan Program offered to those who were affected by natural or man-made calamity; and the Agriculture and Fisheries Machinery, Equipment and Postharvest Facilities Loaning Program.