MANILA—Department of Agriculture (DA) Secretary Emmanuel Piñol is seeking the creation of a more efficient and organized credit union for the farmers and fisherfolks in line with the government’s agenda to raise their incomes 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 DA central office in Quezon City.
With the law tying the DA’s hands, the agriculture chief noted that the agency has resorted to giving its loanable funds to financial institutions that have their own sets of complex requirements along with higher interest rates, which often intimidate potential borrowers.
Piñol added there are also delays in the release of funds.
“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,” he explained.
Piñol underscored the importance of timely release of funds for the farmers as they follow planting timelines.
As such, Piñol proposed that the creation of 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.
He stressed that the proposed agency should also impose crop specific payment schemes as different crops have different harvest periods.
“If we continue to let farmers avail of their loans from those who take advantage of their needs and impose high interest rates, they will remain in the cycle of being just mere producers. We should teach our farmers to become food processors and entrepreneurs for them to be able to uplift their lives,” Piñol added.