ILOILO CITY – The Iloilo provincial government will offer an interest-free loan program to farmer cooperatives to help them adjust to the low prices of palay.
Iloilo governor Arthur Defensor Jr. on Thursday said the province will offer loans to farmer cooperatives, which in turn, will purchase the produce of small farmers at premium prices.
He added farmers with less than a hectare of palay production have no capacity to keep the produce within the moisture standards of the National Food Authority (NFA).
The NFA requires 14 percent moisture content of palay the reason why it cannot purchase the produce of small farmers who lack facilities in keeping the grain within the moisture standards.
The governor recently met with Agriculture secretary William Dar to discuss matters on solving the low prices of palay in the market.
“The national government wants the local government units, especially the province, to be involved in this,” Defensor said.
The governor on Sept. 11 gathered various cooperatives to discuss the loan program.
“It will have zero interest and we want to borrow from the Land Bank of the Philippines because that is the directive of the Agriculture secretary from the national government that the Land Bank will loan money to the local government units as a source of fund,” Defensor said.
He added the cooperatives must be accredited by the province and have a drying facility.
The amount of loan that will be granted by the province will depend on cooperatives’ absorptive capacity.
Defensor said the provincial government is crafting an executive ordinance on loan agreement as they are still “checking the laws and regulations” for the financial aspect of the plan.
“This will involve loans, financial institutions, and we will check our banking laws, our cooperative laws and even Commission on Audit rules on what we can do,” he added.
Elias Sandig, assistant provincial agriculturist, on Friday said palay prices in Iloilo market are sold at P10 to P12 per kilo.
He said out of the 114, 000 farmers in the province, 7,953 farmers till below a hectare of land.
“About 8, 000 of our farmers have no capacity on drying palay,” he added, saying this number of farmers can benefit the loan program.
From January to August, 3,179 hectares of palay in the province were already harvested.
The provincial government targets to offer the loan program by October as it is still harvest season.(With a report from PNA/PN)