DA sets up P200-million fund for lending to rice farmers

MANILA, Philippines — The Department of Agriculture is allocating P200 million in loan funds for farmers who will sell their produce to the National Food Authority (NFA).

Agriculture Secretary Emmanuel Piñol said farmers who would sell their palay to NFA could borrow up to P50,000 which they could pay back after harvest at three percent interest without any collateral.

DA recently launched Production Loan Easy Access for Rice Farmers at the Southern Philippines Grains Center in Sultan Kudarat with about 500 rice farmers expected to become the first beneficiaries of the program.

“The PLEA for Rice Farmers is the latest variant of the DA’s easy access credit program aimed at providing farmers access to production loans which they traditionally get from traders and loan sharks at 10 percent interest per month,” Piñol said.

Unlike the regular PLEA program where borrowers are required to be members of a cooperative or association, the PLEA program for rice farmers will be granted to both individual farmers and members of cooperatives or associations.

Farmers in Sultan Kudarat and in some areas of North and South Cotabato, Maguindanao, and Saranggani have either finished harvesting or are now harvesting their palay to prepare for the next planting season.

“Since many of them borrow their production expenses from traders at high interest rates, the bigger part of their income would go to the payment of loans leaving them with no choice but to again borrow money to finance their land preparation and planting,” Piñol said.

Farmers, who will participate in the program will be documented by the DA and basic information will be backed up by satellite images and aerial photos which will pinpoint exactly the location of the applicants’ farms.

Based on the data, DA will be able to project the expected harvest of the applicant which will serve as the basis in determining the amount of the loan to be granted.

“Once the applicant is validated, his loan will be immediately released in full through a local conduit bank to allow him to finance his farm operations,” Piñol said.

During harvest time, NFA will buy the farmers’ produce at P17 per kilogram clean and dry with an incentive of P3.70 per kilo after which his loan will be deducted from his proceeds.