In its goal to attain inclusive economic growth, one of the specific objectives of the administration of Pres. Benigno S. Aquino III (PNoy) is to strengthen the agricultural sector. One of the major strategies identified towards the attainment of this is to make credit more accessible to small farmers and fisherfolk to help in the improvement of their productivity and, thereby, the improvement of their household incomes as well.

Under the 1997 Agriculture and Fisheries Modernization Act (AFMA), government should have appropriated a funding of P2.0 billion for the Agro-Industry Modernization Credit and Financing Program (AMCFP) in the first year of its implementation. Subsequent supplemental funding for the AMCFP should have been P1.7 billion per year over the succeeding six years thereafter. Had this been followed, it should have resulted in P12.2 billion in total government funding for agri-fishery credit by the time the implementation of AFMa was terminated in 2004.

Yet, it was only during the PNoy Administration – sixteen years after the enactment of AFMA – that government finally allocated a budget for small farmers and fisherfolk credit. Prior to the PNoy Administration, the AMCFP was being implemented on a very limited scale through loan funds collected and consolidated by the Agricultural Credit Policy Council (ACPC) from previous agricultural credit programs that had already been terminated.

Here are the highlights of the PNoy Administration’s accomplishments in its strategy to make credit more accessible to small farmers and fisherfolk, as of February 2015:

1. Fresh Funding for Small Farmers and Fisherfolk Credit. Under the PNoy Administration, P1.0 billion was appropriated by the government in 2013 to the ACPC for the implementation of a flexible credit facility called the Agricultural Fisheries Financing Program (AFFP). In 2015, the ACPC was additionally appropriated an amount of P2.0 billion for the expansion of the same program. Presently, the AFFP is being implemented nationwide by the DA, through the ACPC, for the benefit of small farmers and fisherfolk who are registered in the Registry System of Basic Sectors in Agriculture (RSBSA). The AFFP now constitutes part of the AMCFP. Through the P3 billion funding provided for the AFFP, government loan funds for farmers and fisherfolk has increased by almost 400% in just 5 years of this Administration (Table 1).

Table1. Status of Funding for Small Farmers and Fisherfolk Credit

(As of 2010, 2013 and 2015)

2. Easier Access to Formal Financing Assistance for Small Farmers and Fisherfolk. Aside from the appropriation of fresh funding for agri-fishery credit, the PNoy Administration is also making formal loans for production and alternative livelihood more accessible to small farm and fishing households. Over the period 2011-2014, the PNoy Administration was able to steadily increase DA-ACPC loan releases to small farmers and fisherfolk (or farmers tilling 5 hectares or less; and fisherfolk using boats of 3 metric tons capacity or less) through the AFFP and other AMCFP programs, such as the Cooperative Banks Agricultural Lending Program (CBAP); the Agricultural Microfinance Program (AMP); and the Sikat-Saka Program for rice farmers. Credit has been made more accessible to small farmers and fisherfolk under these programs by introducing innovations and more flexibility in lending guidelines including, among others: direct lending by the Landbank of the Philippines to individual borrowers; the opening of ATM accounts for small farmers and fisherfolk; the relaxation of the People’s Credit and Finance Corporation’s (PCFC) accreditation criteria for partner microfinance organizations; and bringing down interest rates to as low as 15% p.a. for end-borrowers.

3. Increased Access to Formal Financing for Small Farmers and Fisherfolk. By 2014, the P2.0 billion amount of DA-ACPC loans released for the year to small farmers and fisherfolk was already 58% more than the total amount that was released in 2010. Over the period 2010-2014, the amount of loans released grew by an average of 30.5% annually (Table 2). Correspondingly, the 43,031 farmer and fisherfolk borrowers for the year 2014 constituted an increase of 26% compared to 2010. Over the period 2010-2014, the number of borrowers increased by an average of 9% annually (Table 3). Over a period of 5 years (from 2010 to February 2015), cumulative loan releases of government under the AMCFP had amounted to P6.3 billion, reaching 162,190 small farmer and fisherfolk borrowers. The trend of increase in loans released and number of beneficiaries is shown in Figure 1.

Table 2. Amount of Agri-fishery Loans Released and Percent Increase/Decrease per Year

               (2010-2014)

Table 3.  Number of Small Farmers and Fisherfolk Borrowers and Percent Increase/Decrease per Year (2010-2014)

4. Introduction of a Calamity Assistance Financing Program for Small Farmers and Fisherfolk Borrowers. For farmers and fisherfolk borrowers affected by natural calamities, the government, again through DA-ACPC, also introduced a Calamity Assistance Program in 2013, which allows lenders to give affected farmer and fisherfolk borrowers a moratorium on their loan payments, aside from giving them additional financing assistance for the rehabilitation of their farm and/or other affected livelihood. Over the period 2013-2014, total loan releases under the DA-ACPC Calamity Assistance Program has reached P123.81 million, providing loan relief and assistance to 4,745 farmer and fisherfolk borrowers in areas affected by typhoons and other natural calamities (Table 4).

Table 4.  Amount of Loans Released and Number of Borrowers under the DA-ACPC Calamity Assistance Program for Small Farmers and Fisherfolk (2010-Dec. 2014)