MANILA, Philippines—The Department of Agriculture (DA) and the Land Bank of the Philippines (LBP) have opened a P400-million credit line for rice farmers in four provinces to finance their planting in the dry cropping season.
Agriculture Secretary Proceso J. Alcala and LBP president and CEO Gilda E. Pico on Saturday launched the loan program aimed at boosting the administration’s flagship food security plan called the Food Staples Sufficiency Program (FSSP).
The DA has been aggressively pursuing its goal to sustain increasing rice harvests as the government aims to stop importing rice by 2013.
Alcala has said that farmers would have to plant more during the dry months to offset paddy losses during the wet season when typhoons hit the country. At present, about 60 percent of all the country’s rice is harvested during the wet months.
The DA and LBP put in P200 million each to come up with the initial P400 million for the loan program that would first be implemented in four major rice-producing provinces—Isabela, Nueva Ecija, Iloilo and North Cotabato.
The P400 million would be made available to 2,000 rice farmers per province, for a total of 8,000 tillers.
Farmers who are members of irrigator associations (IA) would be given priority in the program.
The DA said they could borrow a maximum of P42,000 per hectare per cropping if they would plant hybrid rice and P37,000 per hectare if they produce inbred rice.
IA members should at least own one hectare up to five hectares of irrigated land, which would be used as a “table collateral” for their loan.
Other loan requirements include a farm plan and budget, a purchase order from the National Food Authority or National Agribusiness Corp., and a promissory note for the amount borrowed. Applicants should have no existing palay production loans.
Borrowers will be charged 15-percent interest per annum, inclusive of crop insurance, payable within six months. Declining interest rates would be applied to borrowers who establish a good credit standing.
For the first two cropping cycles, the interest rate will be pegged at 15 percent, to be reduced by one percent each succeeding cycle starting from the third up to the sixth cropping cycle.