The Senate has ratified a bicameral conference committee report endorsing the passage of an enabling bill that will expand farmers’ access to financial services.
Acting on the endorsement of Sen. Cynthia Villar, senators adopted the bicameral conference committee report on the bill repealing Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009.
Villar, chairperson of the Committee on Agriculture, Food, and Agrarian Reform, sponsored the report reconciling the disagreeing provisions of Senate Bill 2494 and House Bill 6134 or the Agriculture, Fisheries and Rural Development Financing Enhancement Act of 2022.
The senator recalled that concerns were raised because banks would rather pay penalties than lend money to farmers, fisherfolks and other agricultural stakeholders.
More than increasing penalties to ensure bank compliance, she said in a statement that she finds merit in the proposal to consolidate the loan allocation for farmers and fisherfolks and agrarian reform beneficiaries (ARB).
The enabling legislation mandates under the bill that agriculture, fisheries, and rural development financing system through government and private banking institutions are expected to improve productivity, income, competitiveness and welfare of the rural community beneficiaries, including farmers, fishers and agrarian reform communities.
As provided in the enabling legislation, 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, it further provides that 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.
Moreover, 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 would 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 and the Development Bank of the Philippines with the help of training providers as well as the Agricultural Credit Policy Council and the Cooperative Development Authority.
Villar noted that these training programs will equip ARBs, as well as members of their household and the MSMEs, agrarian reform communities with the appropriate knowledge and skills to improve their welfare, competitiveness, income and productivity.
Reminding that the enabling bill is a Palace certified measure, Villar voiced confidence that President Duterte will promptly sign it into law.
