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AS the rice crisis continues to be the favorite topic of tattle in
cafe society (and asking for a second helping of the staple at the
dinner table now is considered politically incorrect!), a lesser
known factor is the vast amounts of money that have been denied to
rice farmers and the like under the Agrarian Reform Bill. Had these
funds been diverted as mandated, it may well have helped avoid the
alarming food situation that the country now finds itself in.
One lawmaker who has seen the blinding light on
the issue is Sen. Loren Legarda who is seeking to plug a loophole in
the Agri-Agra Law that has been denying farmer-beneficiaries of the
Agrarian Reform Law billions in pesos in loanable funds from private
banks.
Legarda explained that while the Agri-Agra Law
mandates banks to set aside 25 percent of their loanable funds for
agricultural and agrarian credit, many of them had been investing
instead in government securities as a form of alternative compliance
to the law.
“In 2002 alone, banks had chosen to invest in
government securities P56.6 billion instead of lending the money to
agrarian reform beneficiaries,” said Legarda, chair of the Senate
Economic Affairs Committee.
“The credit being denied our farmers are
depriving them of the means to secure seeds, fertilizers and other
farm input. As a consequence, our agricultural productivity is
going down and our food security is being compromised,” she
stressed.
Legarda has filed Senate Bill No. 75 to remove
the option of investing in government securities as a form of
alternative compliance to Presidential Decree No. 717 or the Agri-Agra
Law issued in 1975.
The senator said the original intent of the law
to ensure the availability of more credit to farmers, fisherfolk and
agrarian reform beneficiaries had been watered down by subsequent
amendments to it. “By plugging this loophole, we will ensure the
availability of credit to agrarian reform beneficiaries, which are
the small farmers,” she said.
Overall, banks had been complying with the
25-percent Agri-Agra Law requirement, broken down as 15 percent for
agricultural loans and 10 percent for agrarian credit, said Legarda.
But while banks had been providing the full 15
percent as agriculture credit through the years, they had been
availing of the option to buy securities to cover a big chunk of the
10-percent agrarian credit requirement, she rued.
“The P56.6 billion denied agrarian reform
beneficiaries in 2002 represented 66.8 percent of the P84.68 billion
total amount for agrarian reform credit compliance,” she pointed
out.
Pending her bill’s passage, Legarda appealed
to banks to, on their own, allocate the whole 10 percent of the
agrarian credit to agrarian reform beneficiaries as their way of
boosting the agriculture sector and ensuring the supply of food in
the country.
Legarda is also seeking to remove the
distinction between agriculture and agrarian reform credit, thereby
treating the 25-percent loan quota as a generic whole. She said this
will allow banks flexibility in allocating their quota among
different beneficiary sub-sectors as borrowers are given their share
of the responsibility in ensuring the viability of their projects.
From 1993, when the Bangko Sentral ng Pilipinas
started to monitor the banks’ compliance with the Agri-Agra Law
until 2002, the loanable funds allotted to agriculture and agrarian
reform credit were as follows: P285.01 billion (1993); P386.26
billion (1994); P520.43 billion (1995); P596.43 billion (1996),
P714.21 billion (1997); P776.97 billion (1998); P990.63 billion
(1999); P888.42 billion (2000); P935.71 billion (2001) and P956.81
billion (2002).
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bizzfizz_98@yahoo.com
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