The Senate has ratified the bicameral conference committee report on a bill repealing Republic Act (RA) 10000, or the Agri-Agra Reform Credit Act of 2009, to enhance access of agricultural communities to financial services and programs that increase productivity.
Senator Cynthia Villar, chairperson of the Senate Committee on Agriculture, Food, and Agrarian Reform, sponsored the report harmonizing the disagreeing provisions of Senate Bill (SB) 2494 and House Bill (HB) 6134, or the Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022.
Villar revealed that concerns were raised because banks would rather pay penalties than lend money to farmers, fisherfolks and other agricultural stakeholders.
She said more than increasing penalties to ensure bank compliance, she finds merit in the proposal to consolidate the loan allocation for farmers and fisherfolks and agrarian reform beneficiaries (ARB).
Mandated under the bill is an agriculture, fisheries, and rural development financing system through government and private banking institutions to improve productivity, income, competitiveness and welfare of the rural community beneficiaries, particularly the farmers, fisherfolk, ARBs, agrarian reform communities, settlers, agricultural lessees, amortizing owners, farmworkers, fishworkers, owner-cultivators, compact farmers, tenant farmers, and members of their household and their micro, small and medium enterprises (MSME) as well as farmers’ and fisherfolk's cooperatives, organizations and associations.
The financing system shall consist of loans and investments to finance activities that enhance productivity and increase income of an agricultural and fisheries household, thereby promoting agricultural sector productivity and competitiveness, as well as sustainable development of rural communities.
Toward this end, all banking institutions, whether government or private, except newly-established banks for a period of five years from date of commencement of the banks' operations, shall set aside a credit quota, or a minimum mandatory agricultural and fisheries financing requirement of at least 25 percent of their total loanable funds.
Banks may comply with the mandatory credit requirement by lending to rural community beneficiaries to finance agricultural and fishery-related activities or comply with the requirement through other means such as lending for the construction and upgrading of infrastructure, including but not limited to, farm-to-market roads, as well as the provision of post-harvest facilities and other public rural infrastructure that will benefit the rural community.
A salient feature of the reconciled version of the bill is the creation of a special fund collected from penalties wherein 20 percent will be allocated for agricultural- and fishery- related organizational– capacity- and institution- building programs and activities.
This will be implemented by the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) with the help of training providers as well as the Agricultural Credit Policy Council and the Cooperative Development Authority (CDA).
Villar noted that these training programs will equip farmers particularly ARBs, as well as members of their household and the MSMEs, and agrarian reform communities with the appropriate knowledge and skills to improve their welfare, competitiveness, income and productivity.
As a certified measure, Villar expressed confidence that President Duterte would immediately sign the bill into law.