Villar-Authored Laws Provide Over PhP2.1 Billion Loanable Funds Yearly To Farmers, Fisherfolks Funds from RCEF, ACEF and SIDA managed by Land Bank provide much-needed credit assistance

Access to cheap or subsidized credit is among the top requirements of Filipino farmers and fisherfolks in order to be more profitable and competitive. Thus, it has been a priority consideration for Senator Cynthia Villar in her legislations. Three of the major ones provide over PhP2.1 billion loanable funds every year.

These are Republic Act (RA) No. 11203 or the Rice Competitiveness Enhancement Fund (RCEF) enacted into law last year (2019), R.A. No. 10848 or the Agricultural Competitiveness Enhancement Fund (ACEF) passed in 2016, and R.A. No. 10659 or the Sugarcane Industry Development Act (SIDA) passed in 2015.

"Ever since, I have been focused on removing the barriers that keep farmers and fisherfolks from being more profitable. Among which is access to affordable credit and I am glad that the laws I have authored and sponsored are serving their purposes," said Villar.

The chairperson of the Senate Committee on Agriculture and Food expressed satisfaction that the bills she authored are providing much-need credit assistance on top of free inbred seeds, machineries/equipment, scholarships, livelihood assistance, training among others to farmers, fisherfolks as well as small cooperatives.

In a recent report by Land Bank of the Philippines, which have been designated in the laws to manage the funds, as of August 2020, outstanding loans to the agriculture sector reached PhP224.66 bilion. This amount includes P20.86B in loans provided to cooperatives and farmers association under the Agricultural Competitiveness Enhancement Fund (ACEF) and the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund (ERCA-RCEF) and the Socialized Credit Program under the Sugarcane Industry Development Act (SCP-SIDA).

The RCEF also allocated PhP1 billion in credit to boost farmers' productivity. ACEF earmarks PhP800 million or more depending on collections. The SCP-SIDA is funded by 15 percent or about PhP300 million of the annual PhP2-billion fund allocated for the development of the country's sugar industry.

"We are thankful to LandBank for doing its job in boosting the agricultural productivity in the country. We hope that they will be even more proactive in making the available funds more accessible to the intended beneficiaries. Previously, there were some delays on their part. We should avoid that especially during the pandemic when funds are urgently needed," cited Villar.

Studies show that agricultural credit is important in solving rural poverty and promoting countryside development. Smallholder farmers and fisherfolks provided access to loans could have the capital needed to purchase production inputs, such as seeds, equipment, or to diversify their crops or livestocks to increase productivity, minimize losses and earn more.

"We have been encouraging farmers to run their farms as a business, so these available loans or credit facilities can help them with that. We also want to save them from falling prey to loan sharks who charge them exorbitant interests. So, government credit facilities or lending windows should really be accessible to them.

The SIDA law provided for socialized credit through Land Bank, for acquisition of inputs, farm machineries, and implements necessary for the continuous production of sugarcane. The bank manages the socialized credit facility under the Farm Support Program and the Farm Mechanization Program.

Under ACEF law, 80 percent of the funds are in the form of credit with reasonable interest which shall not exceed PhP5 million per project loan, for the acquisition and establishment of agri-based production and post-production, processing machineries, equipment and facilities to achieve modern agricultural practices to be extended to Filipino farmers and fisherfolks, associations, cooperatives, and MSMEs

Under the RCEF law, ten percent (10%) of which or PhP1 billion shall be made available in the form of cheap credit facility with minimal interest rates (2%) and minimum collateral requirements to rice farmers and cooperatives to be implemented by the Land Bank and the Development Bank of the Philippines.