Other than bad weather, the traditional scourge of Filipino farmers is inadequate financing which limits what they can do in the field. They are dependent on usurers and traders that condemn them to a life of never ending poverty. They have little incentive to produce more or try new certified seeds or buy fertilizers. They have absolutely no margin for errors.
We have talked about agricultural credit in this country for decades. There are even laws that make it mandatory for banks to lend as much as 25 percent of their portfolio to the agricultural sector. Still, agricultural loans claim no more than three percent of total loans granted by banks through the years. Banks would rather buy government bonds for token compliance than take the risk of lending to farmers, not to speak bear the expense in administering such loans.
It didn’t help that a significant number of farmers who borrowed under the Masagana 99 program of the Marcos era failed to repay their obligations. Less than 30 percent of farmers are known to actually borrow from formal sources of credit. The rest or over 70 percent, borrow from informal sources such as the five to six moneylenders and traders. Government should move in and fill the need and government has tried to do that for years. But government resources are limited.
It all changed this year. Blame it on the election season, perhaps. Last year, government through Quedancor released close to P3-billion worth of loans to farmers. Over half a million farmers, fishermen and small entrepreneurs were said to have benefited.
And surprise of surprises, the farmers paid back their loans, a reversal of the Masagana 99 experience. According to Quedancor CEO Nelson Buenaflor, the repayment rate is 98 percent. Not only do farmers pay their obligations, Quedancor reports that when harvests are disposed of early, they even pay their loans way before maturity date.
I am not surprised. Bayan Microfinance of ABS-CBN Foundation has also been reporting repayment rates in the high nineties. This is the same experience of microfinance groups not just in this country but elsewhere abroad. My son PJ who volunteered his services with a group providing microfinance services in San Diego and parts of Mexico told me they also have the same repayment experience. For that matter, all those five to six usurers victimizing our farmers all these years have made good returns on this kind of credit to the poor.
Part of the reason for the favorable outcome of Quedancor’s lending project is the institution of what they call the Self Reliant Team financing model. Under this model, farmers group themselves into teams of from three to 15 members. They undergo training and orientation on values, leadership and the skills needed in managing their project. Each team elects a leader who is in charge of collecting payments from members and remitting them to Quedancor.
Cito is proud and happy that they have somehow started to create a new breed of organized groups of farmers, fishers and rural folk who are steeped in credit discipline and are being transformed into viable entrepreneurs. Hopefully, if this program is managed carefully and the trend continues, we will have started to transform the Filipino farmer to become not mere tillers of the soil but successful businessmen as well. They may yet be able to free themselves from the eternal clutches of traders and middlemen and usurers and of course, of poverty.
The next step is expanding the program. Because government resources are limited, private sector must step in. And private sector is stepping in, encouraged by the positive initial results delivered by Cito Lorenzo’s team. Quedancor now has some P7 billion in credit line resources to support their rural lending programs. Among the banks that opened up lines are Land Bank, Equitable PCI, Philippine Veterans Bank, UCPB and Allied Banking.
Hopefully, there would be continuity. Government programs are normally affected by the seasons, mostly the election seasons. Cito and his Quedancor team proved that the agricultural sector could deliver the goods if the farmers are supported by adequate credit facilities. We must build on this initial success, elections or no elections. This is definitely a better use of tax money than mere hand-outs as in emergency employment schemes favored by politicians, including Cito’s boss.
"Kerry, Reagan: not what you think. On the big story of Ronald Reagan, President Bush has nothing on John Kerry. That’s because Kerry actually worked with Reagan when he was a rookie senator, even getting tagged by the Gipper to do elections monitoring in the Philippines.
"An elections-monitoring delegation to the Philippines! Clearly Kerry and Reagan worked very closely together. It’s amazing this relationship took so long to come to light... Update: It turns out P.J. O’Rourke has written an account of Kerry ‘working with Reagan’ in the Philippines.
"O’Rourke is a Republican, of course, but a) he was there and b) he wrote about it at the time (1986), which was long before Kerry was close to higher office. The delegation was in fact headed by GOP Sen. Richard Lugar. But Kerry did play a role: O’Rourke reports that in the crunch Kerry – try not to be shocked by this – straddled gutlessly! Specifically, when Filipino vote-tallyers protested the fraudulent count and needed senatorial protection against Marcos goons, ‘all Kerry did was walk around like a male model in a concerned and thoughtful pose.’
"He didn’t even talk to the terrified women vote-tallyers. ... If someone in the Kerry camp really did try to turn this embarrassing episode into an actual selling point, it seems pathetic. Isn’t the point of being a decorated Swift boat captain that you’re supposed to be able to size up a situation and take bold, decisive action? The best you can say is that Kerry was practicing Kissingerian realpolitik then (Marcos = stability)."
"Have you ever wondered why A, B, C, D, DD, E, F, G, and H are the letters used to define bra sizes? If you have wondered why, but couldn’t figure out what the letters stood for, it is about time you became informed!"
{A}........Almost Boobs... {B}........Barely there… {C}........Can’t Complain! {D}........Dang! {DD}.......Double Dang! {E}........Enormous! {F}........Fake. {G}........Get a Reduction. {H}........Help me, I’ve fallen and I can’t get up.
Boo Chanco’s e-mail address is philstar_chanco@yahoo.com