To establish a more efficient and organized credit system for the farmers and fisherfolk who are usually deprived access to bank loans due to stringent requirements set by financial institutions, Agriculture Secretary Emmanuel Piñol seeks the creation of a Farmers and Fisherfolk Credit Union.
Piñol said the establishment of the credit union is part of the government’s agenda to raise incomes of Filipino farmers and fisherfolk so they could rise from poverty.
“By law, the DA is not allowed to directly release funds and use them for agricultural loans,” Piñol said during the House of Representatives committee meeting on small business and entrepreneurship development held at the conference room of the DA New Building in Quezon City.
With the law tying the DA’s hands, the agency resorts to giving its loanable funds to financial institutions that have their own sets of requirements and impose interest rates, which often intimidate potential borrowers.
The requirements are too complex with high interest rates, and delayed release of funds,” the DA Secretary added.
“Time is a critical factor here. If a farmer suffered damages from a storm and the loan is released after a year, it’s useless. By that time, the farmers have already resorted to traders that offer even higher interest rates with less complicated requirements, and they release the loan right away,” Piñol explained.
“We must take note that farmers follow planting timelines, which is why timely release of funds for the farmers is really important,” Piñol added.
As such, Piñol proposed that a separate agency that should focus on credit facilitation, collection, financial management, as well as consolidate loan programs and funds to provide better service to the farmers who wants to avail loans from DA be established.
He further stressed that the proposed agency should also impose crop specific payment schemes as different crops have different harvest periods.
“It’s about time that we teach farmers the sense of responsibility by paying their debts, knowing that the funds will be used by other farmers who are in need,” he said. # Adapted – www.da.gov.ph
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