LANDBANK finances first sugar block farm through lending program for sugarcane farmers

Tuesday, August 6, 2019

Sugarcane farmer Josephine Barsalote and her group of farmers have time and again relied on loan sharks, that charge anywhere between 10 to 20 percent, so that they could buy inputs for their sugarcane farms in Kiblawan, Davao del Sur.

Today, Barsalote, now the General Manager of the Pasig Agrarian Reform Beneficiaries & Upland Farmers Multi-Purpose Cooperative (PARBUF MPC), and 32 of her farmer-members enjoy a low-interest financing as the cooperative earned the distinction of being the very first sugar block farm recipient of credit assistance through the Socialized Credit Program under the Sugarcane Industry Development Act or SCP–SIDA.

Malaking tulong po ang SCP–SIDA sa katulad naming small farmers dahil sa mababang interes nito na 2% per annum. Dahil dito, hindi na namin kailangan pang humiram sa dati naming inuutangan na mayroong interes na 10%, 20%,” Barsalote said.

The SCP-SIDA is a joint program of Land Bank of the Philippines (LANDBANK) and the Sugar Regulatory Administration (SRA). LANDBANK granted PARBUF MPC a short-term loan to be used for sugarcane production, specifically covering the following: land preparation, purchase of planting materials, planting expenses, hauling fee, weeding, cultivation, and fertilization.

“By improving the productivity of our sugarcane farmers through the SCP–SIDA loan program, developed in accordance to the SIDA Law, LANDBANK also hopes to increase sugarcane production in the country,” said LANDBANK President and CEO Cecilia C. Borromeo.

The country’s local sugar farming and mill operations are said to generate P90 billion annually from the sale of raw sugar, refined sugar, molasses and ethanol. The industry also provides employment to 700,000 sugar workers across more than 20 sugar producing provinces in the country.

However, according to the SRA, the sector’s output for this year is going to be lower than what was produced in the previous years. During the last crop year, the country produced about 2.1 million MT of sugar, which is lower than the output target of 2.27 million MT and the 2.5 million MT recorded in the previous crop year.

To be considered as an eligible sugar block farm, the farmer group or organization must be able to have a minimum farm area of 30 hectares. Aside from block farms, eligible borrowers include individual farmers (farmers owning five hectares and below) and common service centers, all registered with and endorsed by SRA.

Loanable amount is up to 90% of the project cost which may be used to finance sugarcane production for block farms and individual farmers; and assets and equipment acquisition as well as working capital for common service centers.

As of June 2019, LANDBANK has approved P84.38 million in loans to 625 individual farmers, with P40.49 million already released to 445 borrowers.