Free farmers from debt!

May 24, 2020

If the government really wants to lighten the burden of farmers, especially during this period of great difficulty, then it should consider canceling their loan obligations incurred in purchasing lands under the land reform program.

This would greatly unburden farmers still servicing the loans since the program started.

They can then use the money to buy seeds, farm inputs, and equipment and machinery to boost their productivity and income.   

Thus, we fully agree with and totally support Senate President Pro Tempore Ralph Recto in calling for Senate action on his bill condoning all the debts farmers incurred in owning lands under the government's Comprehensive Agrarian Reform Program.

He made the appeal following the approval by the House of Representatives of a bill that contains his proposal.

Recto's measure seeks the write-off of all unpaid amortizations, interest, penalties and surcharges on loans secured under CARP.

Once this mass amnesty of farmer's obligations is approved by law, "the agrarian reform beneficiaries shall be deemed rightful owners of the lands awarded to them".

"This is one Covid-response measure worth approving. If greater food production is what we should be doing to cushion the economic impact of the pandemic, then it is an incentive for those who feed us all," he said.

"Emancipation from debt is what they also need," Recto said.

The former Socio-economic Planning chief said the total amount of land reform loans for forgiveness is small compared to the hundreds of billions in private sector loans which had been written off over the past 40 years.

"We have bailed out banks, paid for white elephant projects, amortized foreign loans of dubious benefits, lost money in mmbankrupt firms, and entered into joint ventures which left us holding the bag," he said.

The veteran lawmaker noted that a succession of administrations has been generous to corporate deadbeats whose loans we guaranteed and eventually assumed.

"We should extend the same consideration to the farming poor," he lamented, adding that government has always been a "white knight" to many private corporations in distress.

Recto said condoning the loans would be a big load off farmer's backs and also from offices that manage these receivables.

In one official report, only P2.5 billion of the P14.3 billion in amortization for loans granted to awardees of CARP from 1987 to 2004 was paid.

Collection performance by the Land Bank of the Philippines on CARP loans, on the other hand, was about 51 percent as of March 2015.

"There is a huge administrative cost in managing this important aspect of the agrarian reform program. In fact, in one study, the system to collect loan payments from CARP beneficiaries was not fully put in place due to the high costs required," Recto explained.

While farmers' debts would be condoned, landowners whose properties were subjected to land distribution would still be paid, he explained.

"Their right to be paid on time and based on the legal contracts will be honored and will not be impaired," he stressed.

Recto's bill limits the condonation to CARP loans "and is not a 100- percent write-off of all agricultural debts, because if we will do the latter, then those who had maliciously wasted millions in other programs will get a free pass".

Recto’s proposal complements a lady colleague’s advocacy for grater support to farmers and the agricultural sector.

Sen. Imee Marcosearlier  lamented the "crumbs" of livelihood support allotted to farmers, citing that P 5,000 in cash aid did not reach many farmers and could not be stretched to buy seeds and fertilizer for the next planting season.

Marcos noted that most farmers who till only a hectare or two of land were intimidated by having to apply for loans and were unlikely to avail of more than P 600 billion in off-budget funds coursed through the Land Bank  for agricultural aid.

"Banks only lend money to people with money. What borrowing capacity do poor, unregistered farmers really have? Only big business will qualify and benefit from such funding," she said.

Marcos added that Dominguez revealed his disdain for poor farmers who could not pay back their loans when he called 800 banks participating in Masagana 99 a mess that had to be cleaned up when he was agriculture secretary during the Cory Aquino administration.

"What our country's chief economic manager is really saying is that rice farmers are a pain in the budget and are not worth subsidizing. He has given up on our rice farmers ever regaining their export potential and will let unregulated rice importation do the dirty job of snuffing them out," she said.

Earlier, Agriculture Sec. William Dar has recommended to lawmakers a P66-billion stimulus plan to mitigate the effects of the coronavirus disease on the agriculture sector.

During a virtual hearing of the House Committee on Agriculture and Food, Dar said the stimulus package would include P15 billion for the cash for work program for agri-fishery workers, P20 billion for food logistics or food markets, and P31 billion for “Ahon Lahat, Pagkaing Sapat”  Kontra sa Covid-19 Program.

He said the cash for work program aims to provide jobs to one million agri-fishery workers by granting each beneficiary aid amounting to P15,000.

"The goal of this cash-for-work program is to mitigate the impact of Covid-19 by ensuring basic food requirements of poor farming families," he added.