What is PLEA?
The Production Loan Easy Access (PLEA) is a loan facility of the Department of Agriculture – Agricultural Credit Policy Council (DA-ACPC) designed to address the financial needs of marginal and small farmers and fisherfolk (MSFF). Non-collateralized loans for agri-fishery production are provided under the PLEA through cooperative banks, rural banks, cooperatives and non-government organizations (NGOs) as lending conduits. The maximum loanable amount a farmer or fisherfolk can borrow is up to P50,000 for short-term commodities and up to P150,000 for long-gestating commodities. The loan is payable depending on the commodity or project/s with a low interest rate.
What are the coverage areas of PLEA?
The PLEA is being implemented nationwide covering 81 provinces.
How are the loans extended?
The DA-ACPC taps lending conduits in extending loans to MSFF. The lending conduits select, evaluate, approve and collect loans from borrowers under agreed guidelines with the ACPC. The ACPC extends zero cost fund to lending conduits that in turn must extend non-collateralized loans at reduced interest rate (6% p.a.) Only the loan principal shall be remitted to ACPC. The interest fees shall go to the lending conduit.
What are the types of eligible lending conduits?
Type 1 – Cooperative banks, cooperatives and NGOs that are currently accredited by or have been/are qualified under any existing partnership under the ACPC lending programs and/or with any of the following institutions/programs: Land Bank of the Philippines (LBP), People’s Credit and Finance Corporation (PCFC), Agricultural Guarantee Fund Pool (AGFP), Development Bank of the Philippines (DBP) and other GFIs. Type 2 – Cooperatives, farmers and fisherfolk organizations and NGOs that are not qualified as Type 1 conduits but comply with the following basic eligibility ciriteria: a) Must have juridical personality – registered with Securities and Exchange Commission (SEC), Cooperative Development Authority (CDA), Department of Labor and Employment (DOLE), or other government registering agencies; b) Must have been endorsed by a government agency / instrumentality; c) Must have an existing set of officers with good character reference; d) Must have a Core Management Team – with a manager, treasurer, and bookkeeper who can be part-time or full-time; e) Must have an existing bank account in the name of the organization. If none, compliance shall be a pre-release requirement; f) Must have contributions (cash or in kind) and/or savings from members. Note: Type 2 conduits that have developed a satisfactory track record in the program after at least a year may graduate into Type 1 conduits. Such must have: (a) good repayment performance (at most 5% past due ratio); and (b) established financial recording and control system. If the Type 2 conduits have been assessed by the ACPC to have insufficient demonstrated financial transaction management capability, the funds for lending operations shall be released in the following manner: (1) The ACPC shall tap a “cashiering” institution where funds shall be transferred; (2) The lending conduit shall submit to ACPC the list of its approved eligible borrowers and the corresponding loan amounts which shall be the basis for the amount of fund release; (3) The loans shall be released directly to the individual borrowers by the “cashiering” institution. The “cashiering” institution shall be any government bank, private bank with authority to receive government deposits, any stable cooperative with demonstrated financial handling capability.
Is the lending conduit allowed to charge additional interest?
No. In the Memorandum of Agreement (MOA) executed between ACPC and lending conduit, one of the provisions states that LC should follow strictly the PLEA guidelines. If the LC violates any of these guidelines, its involvement in the program will be terminated. Likewise, the LC will be banned in any DA and its attached agencies’ support services and programs.
Can a lending conduit reflow the collected loans to borrowers?
No. The conduit must remit all the collections to ACPC but they can request for re-availment of credit funds so that they can extend loans to MSFF.
Who are the Eligible Farmer/Fisherfolk Borrowers?
Must be marginal and small farmers and fisherfolk as defined by the DA-ACPC registered/enrolled under the Registry System for Basic Sectors in Agriculture (RSBSA). Small Farmer- Refers to “natural person dependent on small-scale subsistence farming or fishing activity as primary source of income” (Section 4, RA 8435/AFMA), i.e., those who (a) own or are still amortizing lands that are not more than three (3) hectares, tenants, leaseholders, and stewards (Presidential AO No. 21 of 2011, Revised IRR of RA 8425/Social Reform Act); or (b) engaged in backyard livestock and poultry raising defined by Philippine Statistics Authority (PSA) as engaged in: (a) livestock raising not exceeding any of the following: (i) 20 head of adults and zero young, (ii) 40 head of young animals, (iii) 10 head of adults and 22 head of young animals; and (b) poultry raising not exceeding: (i) 500 layers or 1,000 broilers, (ii) 100 layers and 100 broilers if raised in combination, (iii) 100 head of duck. Small Fisherfolk- Refers to those directly or indirectly engaged in taking, culturing, or processing fishery or aquatic resources, to include, (a) those engaged in fishing using gears that do not require boats or boats less than three (3) tons, in municipal waters, coastal and marine areas; (b) workers in commercial fishing and aquaculture; (c) vendors and processors of fish and coastal products; (d) substinence producers such as shell-gatherers, managers, and producers of mangrove resources, and other related producers (Presidential AO No. 21 of 2011, Revised IRR of RA 8425/Social Reform Act). Marginal Farmers and Fisherfolk- Refers to small farmers and fisherfolk whose incomes are within the poverty threshold as defined by the National Economic Development Authority (NEDA).
What is the Registry System for Basic Sectors in Agriculture (RSBSA)?
The Registry System for Basic Sectors in Agriculture (RSBSA) is an electronic compilation of basic information on farmers, farm labourers, and fishers. The database of the RSBSA includes profile and additional information of farmers, farm labourers, and fishers, as well as farm parcels and fisheries. The main use of the database is to help government planners and policymakers in formulating policies for agricultural development. For those not yet registered, applicants will be provided with enrolment forms for inclusion in the database which upon validation will be included in the RSBSA.
Can an individual farmer or fisherfolk borrow directly from ACPC?
No. According to RA 8435 Agriculture and Fisheries Modernization Act of 1997, the DA-ACPC shall extend management of the credit funds to lending conduits. The credit programs under the AMCFP shall be managed by the cooperative banks, rural banks, GFIs and viable NGOs. Section 21. Phase-out of the Directed Credit Programs (DCPs) and Provision for the Agro-Industry Modernization Credit and Financing Program (AMCFP). – The Department shall implement existing DCPs; however, the Department shall, within a period of four (4) years from the effectivity of this Act, phase-out all DCPs and deposit all its loanable funds including those under the Comprehensive Agricultural Loan Fund (CALF) including new funds provided by this Act for the AMCFP and transfer the management thereof to cooperative banks, rural banks, government financial institutions and viable NGOs for the Agro-Industry Modernization Credit Financing Program (AMCFP). Interest earnings of the said deposited loan funds shall be reverted to the AMCFP. Section 22. Coverage. – An agriculture, fisheries and agrarian reform credit and financing system shall be designed for the use and benefit of farmers, fisherfolk, those engaged in food and non-food production, processing and trading, cooperatives, farmers’/fisherfolk’s organizations, and SMEs engaged in agriculture hereinafter referred to in this chapter as the “beneficiaries”.
Can an individual farmer avail of a loan under the PLEA?
Yes. The borrowers may opt to avail of a loan from rural banks or cooperative banks or cooperatives. However, he should become a member of the cooperative.
Can a borrower re-avail of a loan under the PLEA?
Yes, the borrower can re-avail of a loan without need of new CI/BI. If existing borrower, he must have a good credit standing.
Is there a maximum amount that should be transferred to the lending conduit?
Yes. The maximum amount shall be based on the credit track record and capacity to pay of the lending conduit.
Is the insurance from the PCIC automatic when the borrower avail of the PLEA?
PLEA has free insurance coverage from the Philippine Crop Insurance Corporation (PCIC). However, the lending conduit must make sure that the insurance applications of the borrowers were filed with the PCIC so they can avail of the insurance coverage. Furthermore, it is the duty of the borrower to immediately report to the PCIC any damage suffered so that the PCIC can evaluate losses for compensation.
Who will shoulder the loan balance when a borrower dies?
The balance will not be written off. The lending conduit will still collect from immediate family. However, the DA-ACPC encourages borrowers to avail of life insurance programs.
How long it takes to release funds to lending conduit in the implementation of the PLEA?
It depends on the completeness of the documents submitted to ACPC. After which, the ACPC will conduct validation process. MOA between the ACPC will then be prepared.
How long does it take for a farmer to avail of the PLEA?
The ACPC can transfer funds to an approved lending conduit in a week. Loan release to borrowers will be much quicker as long as a potential lending conduit can submit complete and correct documentary requirements.
What if the borrower failed to have his PLEA Enrolment Form certified by barangay official?
If the borrower is able to present either valid Voter’s ID, proof of billing address (e.g. electricity bill, water bill, other utility bills) and/or a Barangay certification/clearance as proof of his identity and residence, a photocopy of such documents (front and back for ID cards) shall be attached to the enrolment form and thus, verification of Part I by the Barangay is no longer necessary.
What is the liability of the Municipal Agriculture Office (MAO) on signing the PLEA Enrolment Form of the borrower?
The MAO only certify that the borrower is a legitimate farmer/fisherfolk prior to their inclusion in the RSBSA. The MAO may opt to certify each individual enrolment form, or certify a consolidated certified list of farmers generated by the lending conduit through the ACPC Management Information System (ACPC-MIS).
Does ACPC have regional offices?
ACPC has only one office located in Pasig City. However, it has field-based staff assigned in various provinces to assist in implementing and monitoring the programs.