Under the midday sun’s scorching heat, 50-year-old farmer Mike Santos trudged waywardly across a sprawling field of corn stalks planted in perfectly straight lines. He was walking towards the shade of a lone mango tree at the edge of his farm, ready to take his first break in a 10-hour workday and speak to The Ken.
Taking advantage of January’s cooler climate, Santos has been working extra hard this cycle. “We’re trying our best to hit profit early because it is twice as expensive and more unpredictable to grow crops during the summer,” the seasoned farmer said in Filipino.
Out of his 5 hectares of arable land, he uses 1.5 hectares for cultivating corn.
Even though corn is in demand and commands a high price, Santos can’t devote more of his land to the crop. To grow corn properly, he would need more pesticides, fertiliser, and water for irrigation than it would take to grow cassava, which fills the remainder—roughly two-thirds of Santos’ lands—as a filler crop.
The farmer said his earnings will be cut by half without the means to raise capital to pay for those necessities.
Ironically, Santos’ plight is commonplace in a country that has advantages for agricultural productivity: 23% of the Philippine workforce is involved in the farming sector, and 42% of the nation’s land—12.4 million hectares—is farmable, behind only Thailand’s 43% in Southeast Asia.
In the larger picture, the Philippines heavily depends on imports to feed the nation despite the favourable conditions.
This is because loans to farmers are hard to come by. According to the Agricultural Credit Policy Council (ACPC), an entity that is part of the Department of Agriculture, the annual credit gap credit gap The difference between loan demand and actual loans disbursed. between farmers and banks was to the tune of 360 billion pesos (~US$6.6 billion) as of end-2018. ACPC confirmed with The Ken that this is the latest data it has compiled.
A 2020 study study Philippine Institute For Development Studies Projecting Loan Demand from Small Farmers and Fishers in the Philippines Read more by the Philippine Institute for Development Studies (PIDS) showed that demand for agricultural loans among small farmers and fisherfolk usually increases by roughly 5.5% year-on-year. Moreover, the study said that the disruptions caused by the pandemic would likely increase demand for agricultural loans in the near term as migrant workers began returning to work in agricultural settings due to the loss of income in cities.
The situation is all the more surprising given the Philippine banks are required by law to devote 25% of their loanable funds to the agriculture sector—a mandate of the Agri-Agra Reform Credit Act of 2009.
