The Department of Agriculture (DA) called on rural banks across the country to lend more to farmers, fisher folk and rural entrepreneurs to further enhance and develop growth in the farming sector.
During the recent 60th annual convention of the Rural Bankers Association of the Philippines (RBAP), Agriculture Secretary Proceso Alcala urged the country’s rural banks to implement innovative financing programs to serve more marginalized farmers, fisher folk and rural entrepreneurs.
“It’s high time that we consolidate efforts to further enhance growth and development for the benefit of our poor and small farmers, and I am optimistic that you will be part of it,” he said.
Alcala urged the RBAP—led by its president, lawyer Leandro Garcia Jr.—to partner with the DA to successfully implement the Agro-Industry Modernization Credit and Financing Program (AMCFP).
Last year, loan releases under the AMCFP through cooperative rural banks totaled P1.12 billion, more than double the P446 million lent in 2011. This year, the DA has allotted an additional P1 billion under the AMCFP to be lent to small farmers, fisher folk and rural entrepreneurs.
The amount of agricultural production loans has been increasing through the years, expanding by more than fivefold from P41 billion in 1990 to P231.8 billion in 2011, according to the DA’s Agricultural Credit Policy Council (ACPC).
Alcala said the DA aims to further increase formal borrowing among small farmers and fisher folk, from 52 percent in 2007 to 61 percent by the year 2016.
He also commended RBAP for participating in the Agricultural Guarantee Fund Pool (AGFP), which was created in 2008 to encourage banks to lend to the agriculture sector.
The AGFP provides guarantee coverage to unsecured loans extended by financial institutions and other lending conduits, such as rural and cooperative banks to small farmers engaged in rice, corn and food production projects.
To date, 118 rural banks have joined the AGFP.