Thinking outside the box: OFW, Private sector tapped in Agri Financing Program

By DA Sec Manny Pinol

(Photos of the IA conference in Iloilo City taken by Gian Carlo Luage, DA=AFID)

Iloilo City – If there’s a will there’s a way.

Brought up in a family where there was never enough of anything and where we had to literally “make both ends meet,” I have learned to innovate and improvise in the face of challenges and problems.

When the P20-B which I sought for the implementation of an easy access credit for farmers and fisher folks was not granted, I sat with experts and policy makers in the Department of Agriculture and Fisheries and presented to them an idea.

How do we tap the Overseas Filipino Workers who remit about $50-B every year to their families and the Private Sector who are interested to invest in agriculture?

Yesterday, here in Iloilo City, I presented to the officers of the Irrigators Association all over the country a novel agricultural financing program which would tap the Private Sector and the OFWs to allow rice farmers to have access to high-yielding rice seeds and sufficient fertiliser to improve their production.

Called “Kaibigan at Kaagapay Adopt-A-Farm” Program (KAKAF), the informal financing scheme taps the OFWs and several private individuals or the Financing Group (FG) to supply the seeds and fertiliser requirements of farmers who belong to the irrigators’ associations (IA) or farmers’ cooperatives (FC).

The farmers who belong to the IAs and FCs will first be accredited and issued ID cards under the Juan Magsasaka National Accreditation Program which contain information on their farm location and other details.

It will be the farmers who will specify what variety of rice seeds they prefer based on the adaptability to the conditions in their farms and the volume of fertiliser they need.

The financing group who will be identified by the Agriculture Department will then enter into a contract with the farmers group and supply the seeds and fertiliser requirements of the IAs and the FCs which will have to be priced based on prevailing market levels.

The IAs and the FCs will manage and collect the payment for the loans and will get a 6% service fee from their own members which will go their group’s reserve funds.

How will the FGs make profit?

Last week, even in the thick of the problem created by the Bird Flu in Pampanga, I invited all the major hybrid seed producers in the country – SL Agritech, Pioneer, Seedworks, Bayer, Longpin and others – and presented to them the idea.

I asked them if they would be willing to give discounts to the FGs who will buy their seeds in bulk good for about 500,000 this cropping season.

They were all excited about the idea and they said they could give to the FG the discounts that they give to their dealers.

What is the role of the Agriculture Department?

The Department will just serve as a facilitator linking the Seeds Companies to the Finance Group and the Finance Group to the IAs and FCs.

The Department will also conduct trainings for the farmers, provide them with equipment support and most of all, insure the farmers under the Philippine Crop Insurance Corporation so that when calamities would destroy the crops, they will still be able to recover their investments.

When I presented the concept to the IAs who met for their national conference in Iloilo City, the reaction was unanimous – they love the idea.

In fact, farmers groups in the Province of Guimaras have already submitted the names of their members, identified the Hybrid Rice Seeds variety that they prefer and the volume of fertiliser they need.

Guimaras will be the pilot area of the KAKAF which targets to increase farmers’ production to at least 6-metric tons per hectare.

When the whole 500,000 hectares of irrigated areas are covered in the first phase of the KAKAF implementation, I expected the annual paddy rice production of the country to increase by 2-million metric tons next year.

By 2018, the KAKAF program intends to cover about 1-million hectares and when that happens, the farmers production will increase by 4-million metric tons by 2019, a volume which would be more than enough to fill up the rice supply shortage of the country.

When that happens, the country’s dream of rice self-sufficiency will be realised, not by expanding the planted area but by increasing the yield from 4.38-metric tons per year to 6-metric tons.

When that is realised, we will be able to highlight once again the Bayanihan Spirit of Filipinos.

Indeed, if there’s a will, there’s a way.

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