Landbank earmarks P10 billion for palay buying assistance

MANILA, Philippines — The Land Bank of the Philippines is allocating P10 billion for a lending program for local government units (LGUs) particularly for the procurement of palay from local farmers to cushion the impact of the continued drop in palay prices.

The Palay Alay sa Magsasaka ng Lalawigan (PALAY ng Lalawigan) program will  assist provincial, municipal and city governments of rice-producing areas nationwide to procure palay from small farmers, with a low interest rate of two percent per annum.

Landbank said it is considering aligning its pricing with the recent announcement of the Agricultural Credit Policy Council (ACPC) Governing Board that pegged the price of wet palay at P16 per kilo and dry palay at P19 per kilo.

“This is a direct response of the bank, together with the Department of Agriculture, to the call of the national government for a concerted effort of government agencies serving the agriculture sector to firm up its support for our palay farmers in the wake of the impact of lower palay prices,”Landbank president and CEO Cecilia Borromeo said.

Earlier this month, Agriculture Secretary William Dar and Borromeo met with members of the League of Provinces of the Philippines (LPP) where the attending 19 governors agreed to participate in the Palay Alay program. Landbank, however, did not disclose the provinces to be assisted by the program.

Under this program, the provincial government will buy local palay and may operate a socio-economic enterprise to assist the farmers whose incomes were adversely affected by the drop in the farmgate prices of palay.  

The PALAY ng Lalawigan program complements the memorandum of agreement (MOA) signed by the DA and Landbank last Aug. 28 for the implementation of the Expanded Survival and Recovery Assistance Program for Rice Farmers (SURE Aid) Program where rice farmers who are tilling one hectare of rice farm and below may avail of a one-time, zero-interest, no collateral loan of P15,000 payable in eight years.

The SURE Aid Program, with an initial allocation of P1.5-billion from ACPC, was launched by DA and Landbank earlier this month in Zaragoza, Nueva Ecija where more than 1,000 rice farmers from Nueva Ecija and Tarlac received their SURE Aid Landbank Cash Cards containing the assistance.

Last week, Dar announced that the ACPC is allocating an additional of P1 billion for the Sure Aid program.

“The amount we set aside was P1.5 billion. That’s not enough. It can only accommodate 100,000 farmers out of the 600,000 farmers that we have under the category,” Dar said.

“In effect, we will now be able to give to almost 170,000 farmers,” he added noting the fund increase.
Landbank is in charge of managing the P2.5 billion DA-ACPC fund by releasing loans through either direct lending to farmers or through service conduits in undbanked and unserved areas.
The DA-ACPC said it would provide Landbank a validated list of farmers eligible for the loan assistance and DA-identified service conduits.
Local farmgate prices of palay have been dropping since the implementation of the Rice Tariffication law last March.
Based on latest figures from the Philippine Statistics Authority (PSA), average price of palay fell 4.4 percent to P16.68 per kilo as of end-August.
This is an annual decrease of 27.4 percent from its level of P22.98 per kilo in the same week of the previous year.
Under the Rice Tariffication Law, quantitative restrictions on rice importation are lifted and private traders are allowed to import the commodity from countries of their choice.
The law replaced the government’s quantitative restrictions on importation of the staple with a 35 percent tariff.