State think tank: Agri loans to aid farmers development

CEBU, Philippines — Financial assistance should be opened easily to farmers, especially to the Agrarian Reform beneficiaries (ARBs), if the government is serious in advancing the growth of the country's agriculture sector.

This according to state think tank Philippine Institute for Development Studies (PIDS) suggesting that financial assistance is needed by the farmers to ensure that recommended inputs are applied.

If government cannot provide the needed capital, it should look into the possibility of providing subsidized inputs to farmers or cooperatives, PDIS study pointed out.

Financial access should specifically be opened to ARBs, such as farmers in the three export crops—banana, pineapple, and sugarcane. Large number of farmers in these crops have been covered under the Comprehensive Agrarian Reform Program (CARP).

Since banana, pineapple, and sugarcane are export crops, the government does not have control over their prices.

However, the study pointed out that the government can provide the necessary policy support such as pushing for lower tariffs for banana and pineapple. Doing so can potentially increase the country’s share in the global market for these high-value crops, which, in turn, will benefit local farmers.

The Agribusiness Venture Arrangements (AVAs) and Sugarcane Block Farming (SBF), two government initiatives aimed at boosting farm productivity and income of ARBs, should be encouraged.

According to PDIS, AVAs and SBF can be successful as long as adequate government support is given to ARBs from the farm production stage to marketing and post-production activities.

Likewise, government must provide a policy environment for Philippine exports crops to be competitive.

Through AVAs, ARBs who were awarded with lands planted with high-value crops such as banana and pineapple, can implement an agribusiness venture with private investors to make farming more economically viable for them.

Provision of credit is another necessity highlighted by the PIDS study. It cautioned that unless capital is provided, individual farmers will always be tempted to go into a lease agreement without thinking of its consequences.

Likewise, it urged government to lobby for the imposition of a quota on corn syrup after 2018 to ensure that the local demand for sugar will increase.

Corn syrup, which is from China, was identified as a sugar substitute only in 2017 and therefore, an importation quota has not yet been set. This reduced the demand for sugar by soft drinks companies, which, in turn, led to a decline in sugar prices. (FREEMAN)