PB asks DA, DAR, BSP: Implement Agri-Agra Law in Cebu Law provides for credit and financing system to boost agriculture

CEBU, Philippines - The Cebu Provincial Board (PB) has asked the Department of Agriculture (DA), the Department of Agrarian Reform (DAR) and the Bangko Sentral ng Pilipinas (BSP) for the full implementation of “Agri-Agra law” in the Province of Cebu.

The PB has expressed hope that the proper and full implementation of the law will boost the agriculture sector and promote livelihood among agrarian reform beneficiaries.

In a resolution sponsored by Board Member Thadeo Ouano, the PB supported Republic Act 10000 authored by Senator Loren Legarda which provides for an agriculture and agrarian reform credit and financing system through banking institutions.

The Province of Cebu has been considered as one of the premier provinces in the country with unprecedented economic growth.

But Ouano said that if such growth is still dependent upon agriculture which is the most basic factor that runs our entire economy, the farmers in the Province of Cebu is in dire need of support from the government, either financial or logistical.

Ouano said that the farmers must be provided with enough financial support to help them improve their agricultural methods that would increase their harvest and income at the same time alleviate their standard of living conditions which contributes to the biggest factor in economic growth of every province.

“Proper and full implementation of the ‘Agri-Agra law’, coupled with proper coordination and application will boost the agriculture sector and promote livelihood among agrarian reform beneficiaries, productivity in the countryside can now be expected,” read Ouano’s resolution.

In order to spur rural development, PD 717 or the Agri-Agra Law was enacted in 1975 to enhance the flow of credit to agriculture, to resolve the need to provide credit by ensuring that funds are made available through the formal banking system.

It mandates that all banks shall set aside 25 percent of their loanable funds for agricultural credit, of which 10 percent is for the beneficiaries of agrarian reform and 15 percent for agricultural credit.

Even with the enactment of PD 717, Congressional Commission on Agricultural Modernization reported that rather than formal banking institutions, farmers usually prefer local businessmen or traders who not only lend for production, but also buy the farmer’s produce.

Small borrowers or farmers prefer to deal with these informal lenders because they can get their loan quickly with less paper work and sometimes no collateral even though it charges usurious interest rates.

In order to improve and correct loopholes of PD 717, RA 10000 was enacted which broadens the modes of compliance to include direct support to agriculture such as infrastructure, and expands the conduit networks in anticipation of the total loanable funds that may be made available.

“With credit made available in the countryside and infrastructure given priority by the government we are assured of the prospect of growth in the country side through agriculture,” Ouano added. — (FREEMAN)