“State of calamity” for food sufficiency

THE Philippine Chamber of Agriculture and Fisheries Inc. (Pcafi) calls on President Ferdinand “Bongbong” Marcos to declare a nationwide “state of calamity” for food sufficiency and immediately mobilize funds for the agricultural sector to to meet today’s food supply challenges.

Danilo Fausto, president and president of Pcafi

During a press conference on Friday, Danilo Fausto, president and president of Pcafi, presented various agricultural plans that the chamber had previously presented during their meeting with Marcos on Thursday, July 7, 2022. Among these is the declaration of a state of calamity to cope with the food crisis, increased local food production and immediate mobilization of funds for Philippine agriculture.

Fausto said it was “necessary” for the government to declare a statewide state of calamity to achieve food sufficiency “so that the president can encourage and direct local government units (LGUs) to lead a part of these funds towards agricultural production”.

“The agricultural sector must be helped in its area of ​​responsibility. It [funds] will not be taken out of their area, but the direction of LGU funds should go to food production. It can go to the value chain or to processing, or to the supply chain, and also to inputs,” he added.

A declaration of calamity status is crucial for LGUs as it allows the programming or reprogramming of funds and the granting of interest-free loans to the sectors most affected by the calamity.

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“We’ve asked his legal team to look into this. He has his sensitivities because it involves local government units, it’s political,” Fausto said. “It’s the only way. We need an intervention.”

He also mentioned that Marcos needs to mobilize the resources that have been granted to LGUs and ensure that part of their Mandanas Gracia decision funds will be used directly in their own locality. “In general, that’s the way to go. Things have to be carefully considered. He understands the urgency,” Fausto said.

In addition, Pcafi asked the new government to review the operation of Philippine Guarantee Corp. (PGC), a state-owned and controlled company attached to the Ministry of Finance and the main state guarantee funding agency in the country. PGC aims to play a development finance role by providing credit guarantees in support of trade and investment, exports, infrastructure, energy, tourism, agriculture/modernization, housing and other priority sectors of the economy, including micro, small and medium-sized enterprises.

Based on a report by the Audit Commission, the PGC has an exceptional guarantee of 207 billion pesos, Fausto quoted. “The problem is that out of that 207 billion pesos, more than 203 billion pesos have been guaranteed for real estate, to the benefit of developers who don’t need that guarantee in the first place,” he said. , lamenting that the agricultural sector has only 500 million pesos outstanding. guarantee.

According to Fausto, the agricultural industry needs a higher amount of guarantee from PGC “because farmers, producers or agro-industrial groups cannot go to the bank without guarantee. But with the guarantee of the Philippines Guarantee Corp., maybe the banks will be able to lend them out and not see farming as a risky business.”

In addition, he pointed out that PGC has collected penalties from banks that have not complied with the Agri-Agra Act, which requires banks and other formal credit institutions to allocate at least 25% of their loanable funds to credit. agriculture and agrarian reform, with at least 10% reserved for beneficiaries of agrarian reform.

“There should also be a working order from the Philippine Guarantee Corp. so that the private sector can access capital and credit. At present, I would estimate that around 1 trillion pesos are available for loans for agri-agra, and we can mobilize that,” he added.

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