Under the administration of President Benigno S. Aquino III, a total of P3 billion loan funds were appropriated to the Agricultural Credit Policy Council (ACPC) for “the establishment of a flexible credit facility for the benefit of small farmers registered in the Registry System of Basic Sectors in Agriculture (RSBSA) as an alternative to the rigid and stringent credit facilities usually provided by banks.”
The P3 billion loan funds were allocated to ACPC under the General Appropriations Act (GAA) of 2013 (P1 billion), and under the GAA of 2015 (P 2 billion).
Pursuant to the legislative provision “the ACPC, in coordination with government financial institutions (GFIs) or cooperative banks, shall formulate the guidelines for a streamlined and equitable access by the foregoing small farmers and fisherfolk to said credit facility”. The loan funds shall be transferred GFIs or cooperative banks to be used exclusively for the establishment of a flexible credit facility for the benefit of small farmers and fisherfolk registered under the RSBSA.”
Thus, ACPC Governing Council approved on July 18, 2013, the establishment of the Agriculture and Fisheries Financing Program or AFFP. The AFFP is one of the Department of Agriculture’s initiatives to help promote inclusive growth by providing financing assistance for small farmers and fisherfolk. The program’s Implementing Guidelines, on the other hand, were approved by DA Secretary and ACPC Chair, Proceso J. Alcala, on December 9, 2013 after going through a rigorous review process.
Of the P1 billion total amount, the ACPC turned P550 million funds to the Land Bank of the Philippines (LBP) and P450 Million to the People’s Credit and Finance Corporation (PCFC) for the implementation in 2014 of the AFFP.
The P2 billion fund, on the other hand, will be used for other programs being implemented by DA-ACPC under the AFFP. These are: 1) AFFP Sikat Saka II; 2) Agrarian Production Credit Program (APCP); 3) ACPC-PCFC AFFP Agri-Microfinance Program (AMP)-II; 4) Cooperative Banks Agri-Lending Program (CBAP) – II; 5) Value Chain Financing Program (VCFP); and 6) Climate Change Adaptation Financing Program (CCAFP).
ACPC Executive Director Jovita M. Corpuz cited that the implementation of the AFFP intends to enhance “financial inclusion” of the rural poor – particularly those who belong to the agriculture sector – as a means to bring about more inclusive growth. She said that insufficient access to financing by small farm and fishing households is seen as one of the biggest constraints for advancing both rural and agricultural development. She added that “although the local banking sector is known to have more than sufficient funds for lending, access to these funds by smallholders in the agriculture sector remains constrained.”
The AFFP takes a holistic framework as it not only provides credit for the whole agricultural supply chain and other livelihood activities, it is also supported with capacity building, technical assistance, credit guarantee, marketing, and monitoring and evaluation components in coordination with other concerned government agencies and institutions.
Under the AFFP, small farmers and fisherfolk (SFF) registered in the RSBSA are eligible to avail themselves of agri-finance and agri-microfinance loans through AFFP partner-GFIs like the LBP and the PCFC. The program, as of December 31, 2014, has already provided loans to 3,378 SFF in priority provinces with completed RSBSA.
The RSBSA is an electronic database of basic information on farmers, farm laborers and fishermen per province. The project is an interagency undertaking of the Department of Budget and Management (DBM), Department of Agriculture (DA), Department of Interior and Local Government (DILG), Department of Agrarian Reform (DAR), and the Philippine Statistics Authority (PSA).
The AFFP is one of the Department of Agriculture’s initiatives to help promote inclusive growth by providing financing assistance for small farmers and fisherfolk.