FOR the past 37 years, Godofredo Magpoc has provided for his family by growing different varieties of palay in his two-hectare farm in Orion town. With the recent decline in palay prices affecting his income, raising capital to sustain his livelihood has become a challenge.
“Sa panahon ngayon, lubhang napakahirap para sa isang magsasaka ang mawalan ng puhunan. Kaya naman napipilitan humiram sa patubuan (informal lenders),” Magpoc said.
In December 2019, Magpoc learned about the Expanded Rice Credit Assistance under the Rice Competitiveness Enhancement Fund (ERCA-RCEF) Program of the Land Bank of the Philippines (LandBank) and the Department of Agriculture (DA). This credit facility aims to boost the productivity and income of small rice farmers and cushion the initial impact of Republic Act No. 11203, also known as the Rice Tariffication Law (RTL).
Under the ERCA-RCEF, individual farmers may borrow up to 90 percent of the total project cost—at a fixed interest rate of 2.0 percent per annum—for the purchase of farm inputs for rice and rice seed production, and acquisition of farm machinery and equipment for production and post-production.
Magpoc successfully applied for a loan of P78,500 from LandBank, which he used to purchase farm inputs and hire additional farmworkers. Since availing of the ERCA-RCEF Program, he has seen an increase in yield of about 30 to 40 cavans of rice every harvest season. He will be availing of his fourth loan under the Program this May 2021.
“In partnership with the Department of Agriculture, LandBank remains focused on delivering responsive financial services most especially to rice farmers and cooperatives. Through the ERCA-RCEF Program, we aim to increase their productivity and income through timely and accessible financial assistance,” said LandBank President and Chief Executive Officer Cecilia C. Borromeo.
Like Magpoc, palay farmer Danilo Zulueta from the Municipality of Pilar also enjoyed the benefits of the ERCA-RCEF Program. A farmer for the past 20 years, he was granted a loan of P61,500 in December 2020 to support his 1.5-hectare rice field, which he used for land preparation and buy fertilizers and pesticides.
“Malaki ang naitulong ng pautang ng LandBank at DA. Dahil sa sapat na puhunan, nakapagpatanim ako ng naaayon sa bilang ng araw ng punla at nakapagsabog ng abono (fertilizer) sa tamang panahon. Dahil dito, naniniwala akong magkakaroon ako ng masaganang ani at siyempre, magkakaroon ng karagdagang kita,” said Zulueta.
For Roberto Morales, another palay farmer from Balanga City, the ERCA-RCEF Program is the best alternative from informal lenders who charge higher interest rates. Under the Program, LandBank granted him a loan of P82,000 in December 2019 which he used as additional capital to purchase fertilizers and pesticides.
“Malaki ang naitulong ng perang nahiram ko mula sa LandBank. Tumaas ang aking kita dahil 2 percent per annum lang ang interest rate ng ERCA-RCEF kumpara sa iba na may mataas na interes,” said Morales.
Continuing support for palay farmers
Under the ERCA-RCEF Program, LandBank has cumulatively released P1.03 billion in loans to 6,214 eligible borrowers composed of palay farmers and cooperatives as of April 30, 2021.
Most of the farmer-beneficiaries were from Cagayan Valley—particularly the rice-producing provinces of Cagayan, Nueva Vizcaya and Quirino—where LandBank assisted a total of 3,129 rice farmers and 19 cooperatives.
DA-accredited cooperatives may also borrow under the ERCA-RCEF Program for the purchase of farm inputs for rice and rice seed production as a collective operation, working capital for rice and rice seed trading, and other rice farming-related activities such as the acquisition of machinery and equipment, as well as relending and rediscounting of existing loans of small rice farmers listed in the Registry System for Basic Sectors in Agriculture (RSBSA).
For on-lending, the interest rate is at zero percent per annum with prescribed pass-on rate to end-borrowers of up to 6.0 percent per annum.
As mandated by Republic Act No. 11203, LandBank shall continue to administer the ERCA-RCEF Program for DA until 2024, and make available P500 million in loans annually to rice farmers registered to the RSBSA in 38 rice-producing provinces.
For more information about LandBank's Lending Programs, interested borrowers may contact the nearest open LandBank Lending Center or Branch nationwide, or call LandBank's customer service hotline at (02) 8-405-7000 or at PLDT Domestic Toll-Free 1-800-10-405-7000. (PR)