Agriculture Secretary Emmanuel F. Piñol’s call to convert the P70-billion Pantawid Pamilyang Pilipino Program into a livelihood-funding assistance instead of a cash dole-out has been frowned upon by experts and program beneficiaries. Some netizens also bashed the chief of the Department of Agriculture (DA) on social media for suggesting the establishment of livelihood assistance in place of the 4Ps.
What is lost in all the noise created by Piñol’s suggestion is that the Philippine farm sector remains unable to compete with neighboring Southeast Asian countries like Thailand and Vietnam, which enjoy a good dose of assistance from their respective governments.
Bangkok, for instance, provided some $2.2 billion in loans and handouts to Thai rice farmers last year to help stabilize prices. In a report, Thailand’s Ministry of Commerce provided $1.57 billion in handouts to farmers and $633 million in loans for 3.7 million households. Bangkok introduced similar short-term loans for rice farmers in 2017 that cost $2.3 billion to cover 4 million households. In another report, an official of the USA Rice Federation claimed that Vietnam extended rice-support subsidies of $236 per ton.
These figures pale in comparison to the assistance given by the European Union and the United States to their respective farmers. The EU has its common agricultural policy, which is a system of subsidies paid to farmers in the economic bloc. One of its goals is to guarantee minimum levels of production. The CAP costs around £30 billion a year and has encouraged farmers to produce more agricultural goods. In the US, taxpayers shoulder some $20 billion annually in subsidies and insurance extended to American farmers.
In the Philippines, farmers can hardly secure loans from commercial banks. Many of them have to rely on loan sharks, or usurers, who can readily provide farmers with the money they need, complete with onerous interest rates. It does not help that farmers seeking loans do not have the documents and collateral required by banks. What makes it more difficult for farmers to access formal lending channels is that lenders are not that keen on the sector because they view farming as a risky venture.
The inability of farmers to access the funds they need from banks is probably what prompted Piñol to call for a revamp in the government’s conditional-cash transfer program. In a way, it could be viewed as Piñol’s cry for help because he knows the difficulties confronting farmers who are in dire need of production capital.
Last year the DA chief had proposed a budget of P50 billion for an “easy access” financing program. The DA’s plan was to provide a maximum loan of P50,000 for a million farmers and fishermen qualified under the scheme. The amount is miniscule compared to subsidies provided by the governments of other Southeast Asian countries. We call on lawmakers to study how they can include this in the 2019 budget of the DA. We also urge Congress to appropriate more funds for research and development activities that could finally improve farmers’ productivity.