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Government Eyes Cash Advance for Farmers


Emmanuel Pinol, the Agriculture Secretary, wants to use the funds of the Pantawid Pamilyang Pilipino Program (4Ps) as loans for agricultural activities nationwide.

“I will formally propose the matter during the next Cabinet meeting,” Piñol told reporters on the sidelines of the 1st Philippine Agriculture Trade and Investment Forum in Metro Manila on Thursday.

The absence of credit programs in many parts of the country pushed farmers and fisherfolks to loan sharks and local traders who slap “atrocious” interest rates, hampering greater income for them, Agriculture Secretary Emmanuel Piñol said.

This is worse at times when local traders “corner the farmers’ produce during harvest time, buying them at prices they dictate,” Piñol added.

Once received, farmers usually use the borrowed money to buy seeds, fertilizers, and other farm inputs. They also intend to pay for labour and personal needs like tuition fees and hospital bills.

“As a farm boy myself, I saw this ‘monster’ gobble up the dignity of the farmer, who has to beg for the ‘cash advance,’ which also has wrapped him in eternal hand-to-mouth-existence and poverty,” Piñol said.

To address this, Piñol said the DA-Agricultural Credit Policy Council (ACPC) and the NFA would implement the cash advance credit program for rice farmers, including tenants with the consent of the landowners, who will sell their farm produce to the NFA.

“There will be ‘no collaterals’ [but the borrower will be charged] with a ‘service fee’ of 3% payable after every harvest or in six months. Which means that if his cash advance is P50,000, he will only pay a service fee of P1,500, which is a far cry from the 10% per month interest rates imposed by local traders and loan sharks,” Piñol explained.

He said the farmer could register individually and does not have to belong to a cooperative or association. However, he should be issued with a cash advance booklet to record his borrowings and payments, Piñol added.

He said the program would serve as a variant of DA’s Production Loan Easy Access (PLEA) which lends to farmers, fishermen and their wives funds up to P50,000 at 6% interest.

“Given the 97 percent repayment rate of the PLEA, I believe this “cash advance” Program of DA-ACPC/NFA will be another innovation which will increase farmers’ production, liberate him from loan sharks and lift him from poverty,” Piñol said.

“The ‘cash advance’ program will be implemented as soon as the guidelines are formulated,” he added.

He said the government can lend funds to 4Ps beneficiaries for their agricultural activities, so they could have a livelihood, become economically productive citizens, and help promote countryside development, instead of being only recipients of state monetary support.

4Ps is a poverty alleviation initiative through which government provides conditional cash grants to the country’s most impoverished of the poor to help meet the immediate needs of this sector. It was a flagship program of the previous administration.

Managed mainly by the Department of Social Welfare and Development (DSWD), the 4Ps funds are also used to promote health and education among poor children through health checkups, deworming, family development sessions, and enrollment in daycare, elementary, and secondary schools.

“We will not take 4Ps away from DSWD but just want to make this program’s funds available for financing livelihood activities like food production,” Piñol stressed.

The government spends about PHP70 billion for the 4Ps yearly, even bigger than the agriculture department’s budget, he noted.

The agriculture chief, Emmanuel Pinol, is very confident about lending 4Ps funds for agriculture, encouraged by small farmers’ and fishers’ 96% %track record in repaying their loans under the Department of Agriculture’s Production Loan Easy Access (PLEA) program. “That track record shows that we can lend to people,” he said.

PLEA is a special credit facility that enables a small farmer or fisher to access, for agricultural production, non-collateralized loan of up to PHP50,000, payable in two to 10 years at 6% interest per year.

4Ps funds’ lending terms could be similar to PLEA, Piñol said. He said that he had mentioned his idea about 4Ps funds to colleagues during previous Cabinet meetings. “Lots of people in the Cabinet are supporting the idea,” he said, without naming names.

Piñol said that the 4Ps beneficiaries could use the money in producing food, such as new ones identified by the DA as agriculture’s “rising stars.”

Among these are calamansi, heirloom rice, and cacao, the DA presented during the forum.

The forum aimed to give fishers and local farmers the opportunity to develop market linkages, generate investments, and earn more.

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