Davao City First District Rep. Paolo Duterte filed a bill intended to institutionalize accepted interest rates on the loans of farmers and provide sanctions to those who will violate the measure.
House Bill No. 9094 or the Anti-Usury Against Farmers Act of 2023 aims to safeguard farmers not to become victims of usurious lenders and to their unauthorized lending practices. Under the proposal, interest on loans to farmers whose landholding does not exceed seven hectares, should not exceed an effective interest rate of 6 percent per annum.
“It is disheartening that regardless of the invaluable contribution of the farmers to the country’s food security, they remain to be living below the poverty line,” Duterte said.
He said the lack of access to formal credit facilities and excessive interest rates charged by predatory and opportunistic lenders remained one of the primordial issues faced by the agriculture sector.
Duterte said several factors were forcing poor farmers to the brink of debt, which include natural calamities, worsening climate change, fluctuating economic forces and unforeseen global pandemic that resulted in the ballooning prices of farm capital and the exposure of agricultural lands to dilapidation.
“As a result, the country’s farmers are faced with unabated losses and financial burden which results in their increased financial vulnerability. It left them with no other choice but to obtain more and more credit from loan sharks in order to secure short term relief with the hopes of mitigating their losses from the effects of devastating calamities, disrupted economies, and exorbitant farming capital,” he said.