The Department of Agriculture (DA) will establish an “accessible” financing scheme for farmers and fishermen instead of giving them subsidies to curtail corruption and fast-track project implementation.
Agriculture Secretary Emmanuel F. Piñol made the pronouncement after President Duterte gave his nod to the DA’s proposal to forego its subsidies program “which has been marked with issues of corruption and slow implementation over the years.”
“The DA will start shifting its agriculture and fisheries support program from the corruption-prone subsidies to a more efficient and easily accessible low-interest financing program starting next year,” Piñol said in his official Facebook page on April 22.
“This move follows the approval by President Duterte of my recommendation that the DA should start abandoning its seeds, fertilizer and farm machinery and equipment subsidies program which has been marked with issues of corruption and slow implementation over the years,” he added.
Piñol cited the infamous fertilizer-fund scam as one of the “most prominent” examples of “anomalies” of the DA’s farm subsidies program.
“The most prominent of these subsidy anomalies was the fertilizer scam where under the pretext of buying fertilizers for farmers billions of pesos were released to the different congressional districts and local government units, including those in Metro Manila,” he said.
Piñol added the DA’s subsidies program “is vulnerable to interference by local political leaders who more often than not would make sure that seeds, fertilizers and equipment are given to their political supporters while their political enemies are left with nothing.”
“Seeds, fertilizers, equipment and machinery given out as subsidies by the government often end up being sold by the beneficiaries because they do not have a stake in the grants,” Piñol said.
“The yearly grants and subsidies to support farmers and fishermen bleed the government dry with billions of pesos allocated every year which could not be recovered anymore,” he added.
Piñol said a “low-interest, easy access” financing program could eliminate corruption in the agency and ensure the improvement of the country’s agriculture sector.
“It will reduce political interference and corruption in the bidding and procurement process. It will instil in the farmers and fishermen and loan beneficiaries the sense of ownership, thus reducing the risk of the seeds, fertilizers and equipment from being sold,” he added.
“It will allow the government to recover whatever it allocates for the loaning program every year thus saving billions of pesos which could be pumped back into the program,” Piñol said.
Piñol also added the agency’s “easy access” financing program which is given through the Agriculture Credit Policy and Council (ACPC) “would give the beneficiaries the sense of pride because they will no longer have to line up and beg for support from the government during planting season.”
“I firmly believe that the subsidy program is not sustainable because subsidies are mainly the result of political decisions,” he said. “The Easy Access Financing Program, on the other hand, levels the playing field.”
The agriculture chief added that initial reports from the ACPC showed that two of its newest financing programs have posted a 96-percent nationwide repayment average.
“The initial reports of success of the Easy Access Financing Program of ACPC through the Program for Unified Lending in Agriculture [Punla] and the Production Loan Easy Access [PLEA] with repayment rates of 100 percent by vegetable farmers of Cordillera and 96 percent nationwide convince me that Easy Access Financing is the way to go,” Piñol said.
The ACPC has recently opened a new credit portfolio, titled “Farm Machinery and Equipment Loaning Program,” which allows farmers associations and cooperatives “to borrow huge amounts without collateral for the purchase of tractors, harvesters, ice plants and cold storage at a 2-percent interest rate per year, payable in eight years,” according to Piñol. He said a committee would be formed and convened to study and draft the policies and guidelines for the agency’s policy shift from subsidy to easy access financing.
Image credits: Nonie Reyes