INCREASING ACCESS TO CREDIT OF
SMALL FARMERS & FISHERS:
THE ACPC EXPERIENCE
by
Jovita M. Corpuz
Executive Director
Agricultural Credit Policy Council (ACPC)
Department of Agriculture (DA)
and
Ferdinand L. Paguia
Project Development Officer V
Policy Research and Planning Staff, ACPC
APRACA CEOs Open Forum on Agricultural and Rural Finance
26 February 2013, Bangkok, Thailand
The presentation is divided into five (5) parts:
1. Global concern over food security;
2. Agricultural credit in the Philippines: A critical
component of food production and selfsufficiency;
3. The ACPC and its evolving role in agricultural
credit;
4. Increasing access of small farmers and fishers to
credit: ACPC’s milestone contributions; and
5. The road ahead: What remains to be done.
1. Global concern over
food security
Agriculture and food production
affected by:
http://www.tdaxp.com/archive/2006/07/02/scotland-a-city-oflovecraftian-dreams.html
http://www.ewea.com/biodiesel-alternative-energy/get-jobbiofuel-renewable-energy/
 Industrialization and conversion
of agri lands into commercial
areas
 Some food commodities
(e.g. corn, sugar) as alternative
energy sources
 Global warming/climate change
http://sumansahai-blog.blogspot.com/2010/05/agriculture-andchallenge-of-climate.html
Impact of climate change on food
production
Without strong adaptation and
mitigation measures, climate change
will reduce food crop yields by 16%
worldwide, and by 50% in South and
South-East Asia in the next 3 decades
(UN-FAO, Worldbank)
http://blogs.chapman.edu/scst/tag/climate-change/
More People, Less Food
http://kuro-kuro.org/archives/2131
The world will have to produce
70% more food to feed a
projected 9 billion people by
2050.
In the Philippines, the
population stands at 90 million
and is growing at 1.8% per
year.
By 2050, when climate impacts
may be at their worst, the
population would have
ballooned to 180 million.
http://koreanewsonline.blogspot.com/2012/10/hung
er-in-philippines-not-food-but.html
The Challenge
How to feed a growing
population amidst the threat
of climate change on food
production.
http://www.earthyreport.com/site/how-are-we-going-to-feed-9-billion/past/
http://www.philrice.gov.ph/?page=resources&pag
e2=news&id=165
Food Self-Sufficiency
The thrust of the Philippine
government is for the country to be
self-sufficient in production of food
staples.
Hence, the Philippine Department of
Agriculture has launched the Food
Staples Sufficiency Program (FSSP)
for 2011-2016.
The FSSP is the
country’s blueprint for
ensuring food security
and raising farmers’
income.
http://balita.ph/2012/07/05/president-aquino-receives-the-fssp-document-fromda-secretary-proceso-j-alcala/
2. Agricultural credit in the Philippines:
A critical component of food
production and self-sufficiency
The FSSP recognizes the provision of timely,
adequate and affordable credit to farmers as
one of the key interventions for achieving
the DA’s goal of attaining food and income
security. However, ‘access’ to credit remain
a formidable challenge.
What is meant by ‘access’?
Credit is considered accessible when:
 formal lenders are present in the area;
 interest rate is affordable;
 requirements are simple and easy to
comply with; and
 loan repayment terms are based on the
cashflow of the household
http://www.clipartof.com/portfolio/jtoons/illustration/money-farming-watering-his-plants-andplanting-new-seeds-70653.html
Credit demand for agri-fisheries
production
Estimated credit demand: PHP 377 billion
(USD 9.276 billion)
Loans released by banks: PHP 85 billion
(USD 2.091 billion)
Credit gap/unmet credit demand: PHP 292
billion (USD 7.185 billion)
Bank lending to agriculture and
incidence of formal borrowing
Loans released by banks to the agriculture
sector account for only 1.8% of their total
loan portfolio.
Only one-third (0.6%) went to agricultural
production.
Only 52% of farmers and fisherfolk
obtained their loans from formal sources.
The rest borrowed from private lenders.
3. The ACPC and its Evolving Role in
Agricultural Credit
The ACPC plays a unique and critical strategic
role in improving access of small farmers and
fisherfolk to formal credit. It is the only
government agency with the legal authority to
synchronize all agricultural credit policies and
financing programs of the government to ensure
a well coordinated and continually responsive
strategy and intervention in agricultural
finance.
Laws and legal issuances that created ACPC
and expanded its mandates:
1.
2.
3.
4.
5.
6.
Executive Order 113
Executive Order No. 116
Republic Act 7607 (Magna Carta for Small Farmers
of 1992)
Republic Act 8435 (Agriculture and Fisheries
Modernization Act of 1997)
Republic Act 10000 (Agriculture and Agrarian
Reform Credit Act of 2009).
Republic Act 10352 (General Appropriations Act of
2013) which provides an additional budgetary
allocation of PHP 1.0 billion (USD 24.606 million)
under the AMCFP.
4. Increasing Access of Small Farmers
and Fishers to Credit: ACPC’s
Milestone Contributions
4.1 Played a significant role
in establishing a
market-based policy
framework for
agricultural finance to
sustain continuous
credit delivery to small
farmers and fishers.
http://article.wn.com/view/2010/01/04/Congress_to_probe_AFMA_budget_nonallocation/#/related_news
4.2 Developed and pioneered
innovative financing
schemes (IFS) for small
agricultural households,
especially for borrowers
that have no access to
formal financing and
have limited assets to 4.3 Facilitated the
offer as collateral.
continuous provision of
institutional capacity
building (ICB) program for
farmer and fisherfolk
organizations; and staff
development program for
ACPC personnel.
4.4 Was instrumental in
crafting, and advocating
the passage into law, of
Republic Act 10000 or the
Revised Agri-Agra Reform
Credit Act of 2009.
http://www.malaya.com.ph/~malayaco/index.php/30thanniversary/160-news-flash/17301-finally-p1b-for-agricredit
http://www.rbap.org/2010/10/day-1-files-october-14-2010-53rdcharter-anniversary-symposium-smx-convention-center/
4.5 Sourced out additional
funding to beef up the
AMCFP fund base for
agricultural lending,
resulting in the fresh
budgetary allocation of
P1.0 (USD 24.606 million)
billion for CY 2013.
5. The Road Ahead: What Remains to
be Done
ACPC’s commitment under the
Philippine Development Plan
(PDP) 2011-2016 is to further
increase formal borrowing from
57% in 2008 to 85% by 2016.
This entails an annual increase
in formal borrowing of 4% until
2016.
http://arnoldpadilla.wordpress.com/2012/01/03/pheconomy-in-2011-part-1-flawed-development-plan/
Strategic Action Plan for Agricultural
Credit 2011-2016
In support of its commitment, ACPC conducted a
National Agriculture and Fisheries Credit Summit
in 2011 to elicit the participation of farmer
groups, financing institutions, the academe and
other stakeholders from the government and
private sector in developing the Strategic Action
Plan for Agricultural Credit 2011-2016.
The Strategic Plan aims to make formal credit
more accessible to small farm and fishing
households and contains key strategies for
attaining this goal, namely:
Strengthen lending to small farm and
fishing households through the AMCFP and
the Land Bank of the Philippines;
Reduce costs of lending and provide
incentives for private banks to increase
lending to the agriculture and fisheries sector;
Strengthen guarantee and insurance
programs;
Establish a small farmers and fisherfolk
credit database, intensify information
dissemination, and strengthen monitoring
and evaluation; and
Expand programs that build the capacity of
small farmer and fisherfolk cooperatives and
other organizations to manage credit funds.
Conclusion
 Funding is critical for executing the
abovementioned strategies. The additional
budgetary allocation of PHP 1.0 billion (USD
24.606) for 2013 serves as a good indication that
funding will continue to be provided in succeeding
years.
 ACPC is currently developing financing schemes
that will maximize the use of the fund and
encourage financing institutions to leverage the
funds to increase outreach to even more farmers
and fisherfolk.
Conclusion
 With the additional funding, ACPC will also
be able to strengthen its other programs in
support of credit delivery such as capacity
building, advocacy and information
dissemination, policy research, and
monitoring and evaluation.