Senator Sonny Angara. INQUIRER FILE PHOTO
The Senate should help look for ways to protect calamity-hit farmers from predatory informal lenders to ensure they would not fall into a debt trap, according to Sen. Sonny Angara.
Angara made this statement after filing a resolution seeking an inquiry into the plight of farmers affected by typhoons who fall prey to shadow bankers that charge high interest rates for loans.
He urged the government and financial institutions to lay down measures to make these farmers less vulnerable to loan sharks.
The senator made the call after Typhoon “Lando” wiped out fields of crops, causing P9.8 billion worth of damage to agriculture and infrastructure. It is the most destructive typhoon to hit the country this year.
He noted that after the typhoon damaged crops that were nearly ready for harvest, many land tillers had to resort to loan sharks to try to recover their means of livelihood.
They were charged exorbitant interest rates of up to 25 percent per month, or 20 percent per day in some instances.
“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,” he said.
“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 said.
He noted that the Department of Agriculture, through the Agricultural Credit Policy Council, has an existing credit facility—the Agriculture and Fisheries Financing Program—for 40,000 farmers and fisherfolk from the poorest provinces.
The Land Bank of the Philippines also has the Agricultural Credit Support Project, which provides credit and noncredit support to agriculture and agriculture-related projects that need additional capital.
However, many poor farmers do not benefit from these programs for various reasons, including lack of collateral or nonawareness of the processes, said Angara.
“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,” he said.