SOURCE: Press and Public Affairs Bureau
Quirino representative Junie E. Cua has filed a bill which proposes a solution to the decades-old problem of agricultural and rural financing in the country. House Bill (HB) no. 5681 or the Agricultural and Rural Financing Enhancement of 2019 strives to provide access of rural communities and agricultural households to financial services and programs that increase productivity, enhance market efficiency, promote modernization and improve the welfare and economic prospects of rural and agricultural communities through active participation of banking institutions.
“Despite more than 50 years of remedial measure on agriculture financing, most notably the Republic Act No. 10000 or the Agri-Agra Act of 2009 which mandates lending by banks to farmers & fisherfolk, there are still little or no financing support to our farmers”, observed Cua, who chairs the Committee on Banks & Financial Intermediaries in the House of Representatives. “As correctly observed by President Rodrigo Duterte in his 2019 State of the Nation Address (SONA), farmers are not being given access to capital with which they can use to increase their yield, resulting in very low productivity. In fact, since 2010 the banks have not been able to comply and have opted to pay penalties that have run into billions of pesos”, added the Quirino solon.
“Farmers cannot borrow from regular banks because the cost of lending to individual farmers is very high and default rates for these types of borrowers is likewise high. Farmers make little or no money due to a variety of reasons. Among them are because they have small, monocrop farms and they often have to borrow from traders or middlemen at usurious interests for all their needs (inputs, transportation, etc.). In addition, farm productivity is low that leave them next to nothing after each harvest.”, observed Chairman Cua.
“We need to organize and train them into cooperatives or associations with professional managers who will access the credit financing from the banks. In turn, these cooperatives/associations can provide ready, low-interest, and flexible financing that can wean them away from mono-cropping into integrated farming that is more profitable thus improving their ability to pay back”, added the Chairman of the Banks Committee, who was also Governor of Quirino and was able to observe the conditions on the ground. Following this scenario, HB5681 creates an Agribusiness Management Capacity and Institution-Building Fund, a special fund to finance the organization, capacity and institution-building programs of rural cooperatives and other duly-registered organizations of rural and agricultural households, to improve their viability and productivity.
SOURCE: Office of Rep. Junie E. Cua