By Almira Louise S. Martinez, Reporter
COCONUT FARMERS are expected to take on more debt from state-owned institutions as El Niño threatens crop yields and farmer incomes, according to the Philippine Coconut Authority (PCA).
“I think more than 50% of the allocated funds from DBP (Development Bank of the Philippines) and LANDBANK (Land Bank of the Philippines) will be utilized next year,” PCA Department Manager Aldrin A. Darilag told BusinessWorld.
“They will borrow to explore other sources of income, they will borrow for irrigation, and they will also borrow to strengthen outputs from their shared processing facilities,” he added.
Government-backed credit programs funded through the Coconut Farmers and Industry Trust Fund under Republic Act No. 11524 allow farmers to borrow money for their planting needs.
The DBP and LANDBANK offer loan assistance programs with a direct lending interest rate of 2% per annum.
“Most probably, the number of borrowers will increase… Unlike in previous years when no one borrowed and they didn’t avail of the credit facility,” Mr. Darilag said.
“The farmers will have to work double time for their farm to be properly irrigated in times of El Niño,” he added.
LANDBANK’s Coconut Farmers and Industry Development Lending Program allows eligible coconut farmers, cooperatives, and associations to access at least P50,000 in credit for production, working capital, machinery and equipment, among others.
Meanwhile, the DBP special credit facility focuses on capacity expansion, farm integration, and enterprise diversification to increase production and incomes. The program’s loanable amount ranges from P15 million up to 90% of the total project cost.
He noted that cooperatives’ relending mechanisms will also boost loan utilization during the dry spell.
“They can relend it to individual coconut farmers, especially those who sometimes are not qualified due to the documents required by the bank. It’s hard for them to borrow,” he said.
He expects cooperative lending to focus on production loans, irrigation, and seedlings.
Farmers were also encouraged to maximize coconut levy trust fund programs, such as free seedlings, college scholarships, crop insurance, medical support, and community-based coconut processing centers and farm mechanization tools, to mitigate the impact of extreme weather on their livelihoods.
“These are the things that they don’t have to pay for because the government subsidizes all of this,” Mr. Darilag said. “These are all in support of the coconut farmers in the form of services, programs, and projects.”
The Department of Agriculture reported that El Niño has affected 288,058 farmers nationwide as of Oct. 21. Agricultural damage from the extreme heat hit P8.57 billion, against P6.87 billion reported in September.