The Department of Agriculture (DA) said it will request the Department of Budget and Management (DBM) to release more than P2 billion worth of funds under Agricultural Competitiveness Enhancement Fund (ACEF) so it could be lent to farmers.
In a statement, the DA said it recently transferred ACEF money of about P1.44 billion to the Land Bank of the Philippines (LANDBANK), while it is set to make a request for DBM to release to the DA another P2.1 billion.
The DA request came as the Federation of Free Farmers (FFF) raised concerns over the billions of unreleased funds, which is said to have been idling at the DBM for years.
Under the Agricultural Tariffication Act of 1996 or Republic Act (RA) 8178, ACEF is placed in a Special Account under the National Treasury and should be used to enhance the competitiveness of local producers affected by trade liberalization when the country joined the World Trade Organization in 1995.
RA 10848 provided that 80 percent of the ACEF fund balance would be allocated to LANDBANK for credit support to farmers and small and medium-scale agricultural enterprises, while the rest would be appropriated for technology commercialization and scholarships.
Agriculture Secretary William Dar said the latest transfer augmented the previous P4.495 billion the DA has cumulatively entrusted to LandBank, being the administrator of the ACEF lending program.
To date DA has a total portfolio of close to P6 billion that farmers, fishers and agri-preneurs can borrow under the ACEF, he added.
LANDBANK President and CEO Cecilia C. Borromeo said that of the P4.495-billion ACEF money for lending, the state-run bank has already approved P3.675-billion worth of projects, while the release of another P796 million is still being processed.
To date, LANDBANK has already released P2.5-billion worth of ACEF loans to farmers, fishers, farmers’ cooperatives and associations (FCAs), and micro, small and medium enterprises (MSMEs) for their respective projects.
Most of the ACEF-funded projects are located in Cagayan Valley region, and the provinces of Occidental Mindoro, Nueva Ecija, Isabela and Capiz.
ACEF was first implemented in 1996 and will end in December 2022.
The ACEF lending program aims to increase the productivity and incomes of farmers and fishers by providing them affordable credit to acquire production, postharvest, processing machineries, equipment and facilities, or buy farm inputs. Farmers can avail of ACEF loans individually or collectively through their FCAs.
DA said individual farmers and fishers can borrow up to 90 percent of their total project cost, not exceeding P1 million, while FCAs and MSMEs can borrow up to P5 million, with a low interest of 2 percent per annum.