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The Comprehensive Agrarian Reform Program of the government calls for the quick adoption of a bill that would excuse all farmer debts accrued in connection with owning land. The Magsasaka Party list has joined the appeal (CARP).

The party list will prioritize promoting the passage of House Bill (HB) No. 3490, which aims to erase the unpaid debts of agrarian reform beneficiaries (ARBs). Once their intra-party legal dispute is resolved, this legislation could significantly contribute to the nation’s economic recovery and food security.

In addition to being a just step toward achieving social justice, forgiving the debts of those who benefited from the agrarian reform today would also help the country’s agricultural sector flourish economically, according to Magsasaka Representative Robert Nazal on Thursday.

He continued, “The farmer-beneficiaries will be given a fresh start and will be freed from the bonds where the law actually intended them to be freed.”

The condonation bill, according to Nazal, is in support of the request made by President Ferdinand R. Marcos Jr. in his first State of the Nation Address, asking Congress to pass legislation that will relieve ARBs of the obligation to repay their respective loans so they can concentrate on improving the quality and productivity of their farms.

There would be a PHP58.125 billion forgiveness of the existing agrarian reform loan, which will benefit about 654,000 people and involve 1.18 million hectares of allocated land.

The goal of CARP is to help farmers and other ARBs in at least two ways: by making credit available for them to utilize to improve their farming operations and by awarding them land that they will have to pay for over 30 years at an annual interest rate of 6%.

According to Nazal, the legislative goal of CARP was to provide farmers with the land and financial support they desperately needed to compete in a global market and ultimately break free from the soil’s shackles.

The government, he added, “now has a massive collectible deficit from the foregoing loans on both the land and the credit guaranteed by agricultural reform recipients, despite the good intentions.”

He added that reaching out to farmers in remote locations has proven to be logistically challenging throughout the years, which has made it tough to recover the debts.

Therefore, he explained, the expense of collection increases the government’s workload.

In spite of this, he continued, “it must be noted that the failure of the collection stems not only from a lack of effective administration of collection but also from the farmer beneficiaries’ inability to bear the loans in the first place, not to mention the compounded interests, penalties, or surcharges.”

According to preliminary data issued by the Bangko Sentral ng Pilipinas, loans from Philippine banks to the agriculture and agrarian reform sector increased by 19.3 percent to PHP851.76 billion last year from PHP713.6 billion the year before.

Farmers who receive benefits are further restricted from leasing their property until their 30-year debt amortizations have been fully paid off and 10 years have passed since the issuance of the Certificate of Land Ownership Award, or CLOA.

According to a 2003 study by the Philippine Institute of Development Studies, restrictions like the one cited above lower the value of the land that was awarded by eroding the value of the land used as collateral, decreasing the value of the land that was contracted, decreasing the farmer’s incentive to invest in land improvements, restricting the transferability of land from less productive to more productive farmers, and limiting the options for more advantageous contractual arrangements.

However, economists in the agribusiness claim that “donation will allow farmer-beneficiaries to invest in greater land improvements or transfer the use of land to more productive farmers or engage in better contractual arrangements”

“In conclusion, no one profits from increasing the farmer-beneficiaries burden. Although the running interest unnecessarily raises the debt, the debt itself does not change. The expenditures of collecting are unaffordable for the government, according to Nazal.

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