June 1, 2022
Senate approves bicam report on bill improving farmers’ access to financial services and training programs
In an effort to improve agricultural communities’ access to financial services and programs that increase productivity, the Senate last week ratified the report of the conference’s bicameral committee on the bill to repeal Republic Act No. ° 10000 or the Agri-Agra Credit Reform Act of 2009.
Senator Cynthia Villar, chair of the Agriculture, Food, and Land Reform Committee, sponsored the report harmonizing the divergent provisions of Senate Bill 2494 and House Bill 2494. ° 6134 or the Strengthening Agriculture, Fisheries and Rural Development Funding Act 2022. .
Villar said concerns have been raised because banks would rather pay penalties than lend money to farmers, fishermen and other agricultural actors. She said that in addition to increasing penalties to ensure banks’ compliance, she finds merit in the proposal to consolidate the allocation of loans to farmers and fishers and land reform beneficiaries (ARB).
The bill provides for a system of financing agriculture, fisheries and rural development through government and private banking institutions to improve the productivity, incomes, competitiveness and welfare of the beneficiaries of the rural community, especially farmers, fishers, ARBs, land reform communities, settlers, farm tenants, depreciable landlords, farm laborers, fishers, landlord-cultivators, compact farmers, sharecroppers and members of their households and their micro, small and medium enterprises (MSMEs) as well as cooperatives, organizations and associations of farmers and fishermen.
The financing system consists of loans and investments to finance activities that improve the productivity and increase the income of an agricultural and fishing household, thus promoting the productivity and competitiveness of the agricultural sector, as well as the sustainable development of the rural communities.
To this end, all banking institutions, whether public or private, with the exception of newly established banks for a period of five years from the date of commencement of bank operations, must reserve a credit quota or a compulsory minimum requirement for financing agriculture and fisheries. at least 25 percent of their total loanable funds.
Banks can comply with the compulsory credit requirement by lending to beneficiaries in rural communities to finance activities related to agriculture and fisheries or comply with the requirement through other means such as loans for construction and upgrading of infrastructure, including but not limited to trade routes, as well as the provision of post-harvest facilities and other public rural infrastructure that will benefit the rural community.
A key feature of the reconciled version of the bill is the creation of a special fund raised from fines, 20% of which would be allocated to organizational and institutional capacity building programs and activities related to agriculture and fisheries. . This will be implemented by the Land Bank of the Philippines and the Development Bank of the Philippines with assistance from training providers as well as the Agricultural Credit Policy Council and the Cooperative Development Authority.
Villar noted that these training programs will equip ARBs, as well as their household members and MSMEs, and land reform communities with appropriate knowledge and skills to improve their well-being, competitiveness, incomes and productivity. .
As a certified measure, Villar said he is confident President Rodrigo Duterte will sign the bill into law immediately.