PIA Press Release
Saturday, January 28, 2012
DA, LBP extend initial P400M Loan to rice farmersby Jerome Carlo R. Paunan
QUEZON CITY, Jan. 28 (PIA) -- The Department of Agriculture (DA) and Land Bank of the Philippines has forged an agreement to launch a P400 million loan program for rice farmers in four pilot provinces.
Agriculture Secretary Proceso J. Alcala and LBP President and CEO Gilda E. Pico launched the loan program as one of the credit components of the Aquino administration’s food security flagship program, aptly called, "Food Staples Sufficiency Program (FSSP)."
The DA and the LBP shared P200M each to come up with the initial P400 million loan program that will be initially implemented this 2012 dry season in four major rice-producing provinces of Isabela, Nueva Ecija, Iloilo and North Cotabato.
It will initially serve farmers who are members of Irrigators’ Associations (IAs) of good standing. They could borrow a maximum of P42,000 per hectare per cropping, if they will plant hybrid rice, and P37,000 per hectare for those who will produce inbred rice.
The initial P400 million will serve approximately 2,000 farmers per province, for a total of 8,000 farmers.
To quality, IA members should at least own one hectare or up to five hectares of irrigated land, which will be used as a “table collateral” for their loan.
Other loan requirements include a farm plan and budget, purchase order from National Food Authority or National Agribusiness Corporation, and a promisory note for the amount borrowed. Applicants should have no existing palay production loan.
Borrowers will be charged 15 percent interest per annum, inclusive of crop insurance, payable within six months.
Declining interest will be applied to borrowers who establish good credit standing. For the first two cropping cycles, the interest rate will be pegged at 15 percentwhich will be reduced by 1 percent every succeeding cycle, starting from the 3rd cycle up to the 6th cropping cycle.(DA/RJB/JCP-PIA NCR)