Additional P1-B for gov’t agri-credit to benefit 97,000 more farmers, fisherfolk

GOVERNMENT initiative in providing credit and financing support to local food production, especially for food staples sufficiency, is getting an added boost by way of an additional P1 billion funding for the Agro-Industry Modernization Credit and Financing Program (AMCFP) in 2013.

The additional budget for the AMCFP, which will come from the General Fund, is expected to benefit an estimated 97,676 new small farmer and fisherfolk borrowers in 2013 who currently have no access to banks and other sources of formal credit.

The AMCFP is the umbrella financing program for agriculture and fisheries of the Department of Agriculture (DA). It is designed to be a responsive and sustainable credit and financing program for small farmers and fisherfolk including those engaged in food and non-food production; processing and trading; cooperatives; farmers and fisherfolk organizations; and agri-related small and medium enterprises.

Under Republic Act 8345, otherwise known as the Agriculture and Fisheries Modernization Act (AFMA), the AMCFP should be given P2 billion on the first year and P1.7 billion for the next six years.  However, not until 2013 has a budget actually been appropriated for the Program.  In previous years, the AMCFP was funded solely through the collection and consolidation of funds from terminated agricultural directed credit programs.

The Agricultural Credit Policy Council (ACPC), which is the government agency mandated to oversee the implementation of the AMCFP, plans to utilize the P1 billion additional funding of the Program for the benefit particularly of farmers and fishers who are engaged in the priority commodities of the DA.  The DA priority commodities include the food staples like rice, white corn and cassava, which are part of the Food Staples Sufficiency Program (FSSP).  Other DA priority commodities are yellow corn, coconut, high value crops, livestock, poultry and fishery products.

Credit and financing is considered by the DA as one of the FSSP’s key strategies to attain food sufficiency as well as increase farmers’ incomes.  Aside from the provision of timely, adequate and affordable credit, the other key strategies of the FSSP are the purchase of yield-enhancing inputs such as seeds and fertilizers and acquisition of farm machinery, equipment and facilities.

Increased access to credit from formal sources is one of the DA’s and ACPC’s commitments as well in the Philippine Development Plan (PDP) for 2011-2016. The target is to increase the incidence of formal borrowing among small farmers and fisherfolk from 52% in 2007 to 61% by the year 2016. ACPC estimates that P109 B will be needed to address the credit demand of the agri-fishery sector for the year 2013.

A National Agriculture and Fisheries Credit Summit was jointly organized and conducted by the ACPC and the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM) on August 18, 2011 where a strategic plan was developed on how to achieve the PDP target of increasing formal borrowing incidence among farmers and fisherfolk.

Among the strategies that were identified were: 1) strengthening lending programs (i.e. AFMA-mandated AMCFP) to small farmers and fisherfolk; 2) reducing costs of lending and providing incentives for private financial institutions providing agri-credit; 3) strengthening risk-mitigating mechanisms such as agri-credit guarantee and insurance programs; 4) establishing a credit database and intensifying information dissemination and program monitoring and evaluation; and 5) intensifying capacity-building programs to enhance financial management capability and credit worthiness/bankability of small farmers and fisherfolk, cooperatives, farmers’ organizations, etc.

The programs currently being implemented under the AMCFP are the Cooperative Banks Agri-Lending Program (CBAP), Agri-Microfinance Program (AMP), Cooperatives Agri-Lending Program (CALP), and the DA Sikat Saka Program.

From January to September 2012, a combined total of P806.43 million in agri-fishery loans were generated by these programs – P93.83 million under AMP; P5.59 million under CALP; P703.55 million under CBAP; and P3.46 million under Sikat Saka. The amount benefitted 19,005 small farmer and fisherfolk borrowers. Cumulatively, the AMCFP has already generated over P4.9 billion loans benefiting 149,505 farmers and fisherfolk.

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