LandBank loans for onion sector hit P1.1B

LOANS released by the Land Bank of the Philippines (LandBank) for the country’s onion sector has reached P1.1 billion as of end-September this year.

In a statement on Friday, LandBank said additional loans amounting to P102.9 million is also in the pipeline to support the production and trading of onion and acquisition of cold storage equipment.

Onions are a high-value crop that can be financed under the LandBank Sulong Saka Program, designed to provide credit assistance to various qualified stakeholders for agribusiness projects that support high-value crops production, processing and marketing.

Under the program, farmers may borrow up to 90 percent of the total project cost for a production loan, while a maximum of 80 percent may be borrowed by small and medium enterprises, cooperatives, farmers’ associations and organizations, large agribusiness enterprises and corporations, nongovernment organizations and countryside financial institutions.

Eligible borrowers may also avail of up to 80 percent of the project cost for the acquisition of fixed assets, and up to 85 percent of the market price of the commodity for commodity loans.

Local government units may likewise avail of financial support under the Sulong Saka Program, provided that the loan amount will not exceed their net borrowing capacity.

Loans for working capital and permanent working capital are payable up to one year and three years, respectively, while loans for fixed assets and construction of facilities are payable based on project cash flow but not more than its economic useful life.

The interest is based on market rate, while loans for smallholder farmers shall bear a concessional fixed rate of 5 percent per annum.

Meanwhile, some 20,000 onion farmers enjoy bountiful harvests and improved earnings through the cold storage facility financed by LandBank.

The storage facility is owned and managed by the Argo Cold Storage, a subsidiary of Argo International Forwarders Inc., and can accommodate up to 450,000 bags of onions. Farmers from Nueva Ecija and neighboring provinces benefit the most from Argo Cold Storage’s services, which help prolong the shelf life of onion produce and reduce postharvest losses due to insect infestation.

“LandBank is doing its share in boosting the local onion supply by providing accessible credit assistance to onion producers in the country. We will continue to service the requirements of agriculture players toward a food-secure and resilient Philippines,” said Cecilia Borromeo, LandBank president and chief executive officer.