STATE-owned Land Bank of the Philippines said over the weekend it may lend about P115 billion to small farmers and fisherfolk in six years to keep President Rodrigo Duterte’s goal of dispersing the economic benefits to the countryside.
LandBank said it was committing to increasing lending to small farmers and fisherfolk from P37.9 billion to P115 billion over the six-year period.
New LandBank president Alex Buenaventura said he would initiate a “reengineering” of the credit facilities for small stakeholders in the agriculture sector and encourage them to enter into “corporatives” to accomplish the goal.
A company under the proposal will be formed to manage the consolidated farms of small farmers, who plan to take part in the corporative. The corporation would be owned 40 percent by LandBank and 60 percent by participating commercial banks. The farmers would provide the manpower to keep their lands profitable.
Buenaventura said under his proposal, 99 percent of the corporation’s earnings would be distributed to the participating farmers “pro-rata according to their respective land ownership,” while 1 percent would be declared as dividends to the corporate owners.
He the proposal would enable commercial banks taking part in the corporative to fulfill their part under the Agri-Agra Law that requires the allocation of 15 percent of their total loanable funds to farmers and fisherfolk and another 10 percent to agrarian reform beneficiaries.
Many banks prefer to pay the fines for failing to comply with the law’s requirements. Buenaventura is set to discuss the proposal before concerned regulatory bodies.
“Also, a portion of the profits earned every harvest by the farmers would be used by them to buy equity in the corporation, until such time that the 60 percent owned by commercial banks is fully divested to the small farmers,” Buenaventura said.
The corporative business model of LandBank will serve as a common vehicle for the lead government agencies to promote inclusive growth among their targeted small farmers: the Department of Agrarian Reform, the Department of Agriculture, the Office of the Presidential Adviser on the Peace Process and the National Commission on Indigenous People.