Angara calls on govt to help farmers caught in debt trap after 'Lando', seeks senate inquiry

Senator Sonny Angara has filed a resolution urging the proper Senate committee to look into the plight of farmers who suffered from Typhoon Lando and are now caught in "debt trap" from "shadow bankers," and to reexamine existing policies that can protect vulnerable farmers from informal lenders. Typhoon Lando, dubbed the most destructive typhoon to hit the country this year, caused damage to agriculture and infrastructure amounting to P9.8 billion, with damage to agricultural crops and livestock reaching P8.6 billion, according to the National Disaster Risk Reduction and Management Council. Small farmers in badly affected rice-growing regions were reportedly left with little choice but to resort to loan sharks to recover and try to finance another rice crop but with exorbitant interest rates of up to 25 percent per month or in some cases, up to 20 percent per day. "The lack of access to formal credit facilities and excessive interest rates charged by predatory lenders are some of the lingering problems in the agricultural sector. Small farmers who get caught in debt trap take on more and more debt at high interest rates just to minimize the losses suffered from the devastating effects of natural calamities like Typhoon Lando," said Angara, former congressman of the Lone Province of Aurora, where Lando made landfall last week. The senator noted in Senate Resolution No. 1626 that the Department of Agriculture, through the Agricultural Credit Policy Council, has an existing credit facility known as the Agriculture and Fisheries Financing Program for some 40,000 needy farmers and fishermen in the country's poorest provinces. Likewise, the Land Bank of the Philippines has credit facilities for farmers called the Agricultural Credit Support Project, which provides credit and non-credit support to agriculture and agri-related projects that need additional capital to increase production or expand operations. Land Bank's loans to small farmers and fishers increased by 13 percent from P51.6 billion in 2013 to P58.4 billion in 2014, benefitting 793 farmer and fishers cooperatives, 206 countryside financial institutions and 226 irrigators' associations. "Notwithstanding existing government facilities for low-cost credit to small farmers, many of them do not take advantage of these credit facilities due to various reasons which include lack of collateral to secure loans, and lack of awareness or familiarity with the processes and requirements needed," Angara said. Furthermore, a study conducted by the Philippine Institute for Development Studies showed that despite the proliferation of government directed credit programs and the significant amount of government funds spent for these programs, the poor farmers or the supposed target beneficiaries still do not have access to credit and are still dependent to informal lenders. "With an increasing population and limited agricultural land resources compounded by climate change, the small farmers continue to be vital stakeholders in our country's development and pursuit for food security. There is an urgent need to address this debt trap that plague the Filipino farmers who remain one of the poorest in the country," the lawmaker said. Angara urged the government and financial institutions to step in and extend help to level the playing field for the small farmers and make them less vulnerable to informal lenders. "The paradox of our time is that these farmers who produce food often go hungry. They support our country through agricultural production while seemingly little support goes to them especially in terms of available and accessible credit facilities. Something has to be done. We should not let our farmers be trapped in debt until death," he added.//