Farmers badly hit by Lando
(The Philippine Star) - October 25, 2015 - 10:00am

SANTA ROSA, Nueva Ecija, Philippines – Philippine rice farmer Francisco Santo Domingo’s life is in ruins after losing yet another gamble with nature, but the typhoon that destroyed his crops means gleeful loan sharks have again hit the jackpot.

Like thousands of other farmers, Santo Domingo will be forced to go back to the “shadow” bankers who dominate the nation’s agricultural economy and take on even more debt at exorbitant interest rates.

“My life is an endless cycle of borrowing money to plug more money that I owe,” a disconsolate Santo Domingo, 37, told AFP as he looked over crops that were just a week away from harvest but ruined by Typhoon Lando.

“This storm will mean we will go hungry for a very long time. We bet everything on this harvest.”

The storm brought floods as high as three meters to one of the

Philippines’ most important rice growing regions, fertile central plains on the main island of Luzon.

Santo Domingo took out a P60,000 loan – a massive amount for any small-time farmer in the Philippines — just a few months ago to buy rice seeds, fertilizers and equipment.

With zero savings or collateral to offer banks for a loan, Santo Domingo said he had no choice but to seek out a village loan shark and agree to terms of 25-percent interest per month.

If the typhoon had not come, the father-of-three had planned to sell his rice quickly enough to pay off most of the loan, while earnings from other crops would have helped manage the rest of the debt.

Now, he faces going back to a loan shark to try and finance another rice crop.

“The loan sharks only have to deal with delayed payments, they will get their money. But us farmers are condemned to die in debt,” Santo Domingo said.

According to the central bank, 604 of the country’s 1,600 cities and towns do not have a bank, denying many residents access to formal credit.

It is in these remote and rural environments that backyard credit operations thrive, with scandalous interest rates sometimes reaching up to 20 percent a day, analysts said.

In Santa Rosa, one loan shark admitted to AFP there were seven of them operating in a single government building.

“We expect the farmers to come to us for more loans after this typhoon. We are just helping them,” the lender, a 43-year-old accounting clerk, told AFP.

Five percent of all Filipino adults owe money to informal lenders, Central Bank governor Amando Tetangco told AFP, adding authorities were trying to encourage banks to lend to the poor.

Many of the farmers who bite the bullet with loan sharks will never recover from debt, according to financial planner Salve Duplito, a celebrity personal finance coach.

“The more they get into these schemes, the harder it will be for them to lift themselves out of this debt quicksand,” she told AFP.

Crop insurance

Vice President Jejomar Binay has urged the government to revisit the crop insurance program after Typhoon Lando destroyed ricefields in Luzon.

Binay made the appeal after visiting the rice-producing provinces of Nueva Ecija and Isabela that were severely affected by the storm last week.

“Let’s revisit the crop insurance. I learned that they ask a lot of requirements from our farmers but offer only a small amount, which I think is P2,000 more or less,” Binay said.

Created in 1978, the Philippine Crop Insurance Corp. (PCIC) is mandated to provide insurance protection to agricultural producers in the country against losses of crops and non-crop agricultural assets due to natural calamities, pests and diseases, and other perils.

The Vice President said he would provide hybrid seeds to the affected farmers.

“Aside from the relief goods we distributed to affected families, I also promised to give our farmers hybrid seeds, which are more expensive than ordinary seeds,” he said.

In a recent study, state-owned think tank Philippine Institute for Development Studies (PIDS) said the covered amount of crop insurance extended by the PCIC must be increased.

PIDS said around 97.5 percent of rice-insurance policies of borrowing clients under the regular program have insurance cover less than the average production cost per hectare, which is roughly P40,000 based on the estimate of the Philippine Statistics Authority.

Lando hovered over northern and central Luzon for days, dumping rain and inundating several provinces. At least 47 people died.

Various areas have been placed under a state of calamity, including the provinces of Isabela, Aurora, Pangasinan, Cagayan, Nueva Ecija, Quirino and Nueva Vizcaya.

The National Disaster Risk Reduction and Management Council said the agriculture sector was hardest hit by Lando, with farmers in the affected regions losing P8.6 billion worth of crops and P1.2 billion worth of infrastructure.

Hardest hit were the agricultural provinces of Nueva Ecija, Aurora, Nueva Vizcaya, Isabela, Ilocos and Pampanga where rice fields and a number of communities were flooded.

Department of Education (DepEd) Region 1 Director Alma Ruby Torio said a partial report indicated that damage to local schools reached P62,405,000.

Torio said a report from Disaster Risk Reduction Management regional coordinator Jose Ritchie Perez showed that schools in the western part of Pangasinan bore the brunt of the typhoon as floods submerged houses and schools.

Torio said the DepEd central office had provided assistance.

The Philippine Charity Sweepstakes Office (PCSO) will celebrate its 81st anniversary by assisting Typhoon Lando victims through hospitalization assistance in areas hit by the storm.

PCSO general manager Jose Ferdinand Rojas II said the PCSO board of directors approved to subsidize the bills of patients directly affected by national emergencies and calamities who are being treated at government hospitals and healthcare facilities. PCSO will shoulder the bills of those confined or treated in public hospitals as a direct result of the effects of Lando.

“PCSO’s Charity and Branch Operations sectors, particularly the Northern and Central Luzon departments, are closely monitoring the situation in Aurora province and surrounding areas,” he said.

This calamity assistance policy is applied during natural disasters and national emergencies.

Rojas said this is in line with the agency’s charter, Republic Act No. 1169, which mandates that PCSO provide assistance to charities of national character. – Helen Flores, Perseus Echeminada, Eva Visperas

ACIRC FARMERS INSURANCE LANDO LOAN LUZON NBSP NUEVA ECIJA RICE SANTO DOMINGO TYPHOON LANDO
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