New Agri-Agra law to boost benefits of agrarian reform beneficiaries — DAR

March 26, 2010 9:40 pm 

MANILA, March 26 -– The Department of Agrarian Reform (DAR) said Friday the beneficiaries of the Comprehensive Agrarian Reform Program (CARP) have reasons to rejoice due to a new law signed by President Gloria Macapagal-Arroyo requiring all banks to lend at least 25 percent of their loan funds to farmers and fishermen nationwide.

Agrarian Reform Secretary Nasser C. Pangandaman said Republic Act No. 10000 or The Agri-Agra Reform Credit Act of 2009, authored by Palawan Rep. Abraham Mitra, corrected the loophole in the old Agri-Agra law.

The DAR chief explained that the old law was also mandated to lend 25 percent of the banks’ loanable funds. However, the same law also allowed banks alternative compliance. Bankers preferred to use the funds in other investments, such as bonds and housing projects, instead of loaning them to farmers because they were considered a credit risk.

“Now, the new law limits the modes of alternative compliance, in which banks can only invest in farming and other agricultural projects,” Pangandaman said.

Pangandaman said that R.A. 10000 imposes a penalty of one-half of one percent on the amount of funds that banks failed to invest in farming-related investments such as agribusiness and agricultural productions. (PNA)

scs/JCA

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