Landbank ramps up loans to small farmers
State-run Land Bank of the Philippines has ramped up lending to farmers through the adoption of a direct marketing strategy as part of its aggressive thrust to channel financial assistance to the farming sector.
Landbank president and CEO Alex Buenaventura said trained supervised credit technicians market directly to all farmers to ensure that small farmers gain access to financing.
Under this strategy, a master list of small farmers would be generated in consultation with local representatives of the Department of Agrarian Reform and the Department of Agriculture.
“Simply put, with this lending strategy, Landbank goes to the farmers, and not the farmers going to Landbank,” he said.
Another innovative lending scheme is the Farmers Corporatives Inclusive Financing Program open to farmers’ cooperatives that enter into a Farm Management and Marketing Agreement (FMMA) with a big Agri Corporative Corp. (ACC).
Under the program, the government financial institution would take charge of land consolidation and coop organizing for the small farmers. It would also provide a fully integrated corporate loan for production, postharvest and processing facilities with lower debt to equity ratio of 90:10 at competitive interest rate for ACCs.
The ACC’s roles under the program is to increase farm production to global standards; to buy from farmers cooperative 100 percent of production at agreed price per kilo as specified in the FMMA and to hire farm workers from nominees of farmers cooperative members.
“The main objective of the Farmers Corporatives Inclusive Financing Program of Landbank is to raise the income of each farmer family way above the P10,000 poverty line threshold per month through corporate farming by partner ACCs which will double production and harvest sales net income of small farmers,” he said.