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THE
local farm sector’s credit requirement was estimated at
P200 billion in 2007, but banks were only able to
finance P48 billion, or 24 percent, of this requirement,
the Department of Agriculture (DA) said.
The DA
noted that despite the banking sector’s reported excess
liquidity or available funds for lending, access to
credit by the agriculture sector remains limited.
Agriculture Secretary Arthur Yap said that although the
Bangko Sentral ng Pilipinas (BSP) is “awash in billions
of pesos of funds” and government financial institutions
have about P15 billion available for lending to
private-sector borrowers, farmers cannot access these
funds even if they have the capability to pay for the
money they need.
Yap said
the lessons of past food production programs proved that
allowing the government to directly lend to farmers was
not feasible, as data from the Agricultural Credit
Policy Council show that it still has collectibles
amounting to P300 million from farmers who borrowed way
back during the Masagana 99 rice program of
then-President Ferdinand Marcos.
Moreover, the passage of the Agriculture and Fisheries
Modernization Act stopped the practice of direct
government lending to farmers and fisherfolk.
Earlier,
the DA lamented that while Philippine agriculture
accounts for almost a fifth of the country’s gross
domestic product, it only gets a measly 5 percent of the
total loans offered by commercial banks.
Farming
in the
Philippines
is considered a risky venture since it remains at the
mercy of the weather.
Weather
disturbances such as storms or dry spells could result
in losses for farmers. Compounding the problems faced by
the farmers is the difficulty of farmers in accessing an
existing crop insurance system that will protect them
from losses caused by natural disasters. |
