The Department of Agriculture (DA) said the pilot-testing of a new loan program aimed at easing farmers’ access to credit will be conducted in two towns in Surigao del Norte and Nueva Ecija.
Agriculture Secretary Emmanuel F. Piñol said the government has set aside P35 million for the Production Loan Easy Access (PLEA), which will initially be implemented in Malimono, Surigao del Norte, and Bongabon, Nueva Ecija.
“The two towns have been chosen as the first two laboratories of an innovative lending program aimed at increasing the productivity of farmers and fishermen and lifting them out of poverty,” Piñol said in a statement.
The DA noted that Malimono is a fishing-dependent municipality, while Bongabon is an onion producer. Under the PLEA program, each farmer from the two municipalities could borrow as much as P50,000, according to Piñol.
He said the PLEA program will be implemented by its attached agency, the Agriculture Credit Policy Council (ACPC), which handles the lending programs of the DA across the country.
“ACPC will allocate P15 million for Malimono and P20 million for the farmers in Bongabon. In Malimono, a poor town with rich fishing grounds, the initial P15 million will be downloaded to a local credit cooperative, which will be lent at an interest rate of 6 percent per annum,” Piñol said.
“Every farmer and fishermen who will avail themselve of the loan will be automatically covered by crop insurance under the Philippine Crop Insurance Corp. and the premium will be deducted from his loan proceeds,” he added.
Piñol said before the implementation of the lending program, farmers and fishermen will be properly identified and their areas properly marked through geo-tagging.
After the verification, all information will be placed in a computer database with verified farmers being issued with identification cards complete with their biometrics and passbooks, he added.
“At an interest rate of 6 percent per year, or .5 percent per month, the maturity of the loan will depend on the commodity and activity that the borrowing farmer will be involved in,” Piñol said.
For rice and corn, he said, he recommended a two-year loan maturity, five years for high-value crops like cacao and coffee, and a maximum of 10 years for long-gestating crops like coconut and mango.