Go Negosyo founder Joey Concepcion on Thursday, April 27, is prodding Congress to review the Comprehensive Agrarian Reform Law (CARL) to allow farmers to use agrarian lands as collateral to access loans from banks. Joey Concepcion (Photo from Go Negosyo via Facebook)
He observed that under the agrarian reform, agricultural lands rewarded to farmers cannot be used as collateral for bank loans, which meant small farmers are unable to grow their production scale. He pointed out that scaling up is the only way for farmers to compete with big agribusinesses and imported agriculture products, similar to farmers from Cambodia and Myanmar who run large tracks of lands. “So, they can use the land to till the soil with whatever they grow –corn, rice, etc. pero (but) they cannot borrow, so nahihirapan ang mga maliliit nating farmers na umutang sa bangko (so our small farmers have a hard time borrowing from banks),” Concepcion, the president and CEO of RFM Corporation, said during the Laging Handa public briefing. “But hopefully, maybe Congress can review the agrarian reform, which was done many, many years back ‘no and see how it can be modified so that this land that were given to our farmers – some of them are now formed cooperatives – can be collateralized ‘no for the purpose of working capital to be used only in the business of farming ‘no, nothing else,” he added. Go Negosyo's Kapatid Angat Lahat (Kalap) program aims to bridge small farmers to markets through the help of big agribusinesses, Concepcion stressed the need to “take a look at the agrarian reform and see whether there are some things that we can tweak and correct.” He shared that in a recent meeting, senior officials of the country’s 15 major banks admitted their apprehension on lending money to farmers. Concepcion noted that banks said, “We’d rather pay the penalty than lend the farmers.” They were referring to the requirement that banks allocate a certain percentage of their loan portfolio to agrarian and agricultural (agra-agri) loans. With big agribusinesses partnering with small farmers under the Kalap program, the Go Negosyo founder hopes banks would be more willing to take the risks of lending money to farmers.