Olongapo SubicBay BatangGapo Newscenter

Monday, October 16, 2006

Magsaysay is not my guy

By Marlen V. Ronquillo
Magsaysay is not my guy

The upland barrios of Castillejos, Zambales, the hometown of Senate’s chairman of the Committee on Agriculture, Ramon Magsaysay Jr., are hamlets of impossible poverty. On steep slopes, subsistence farmers raise whatever crops can survive on cruel, hard land. The farm implements are 18th-century tools: the hoe, carabao-drawn carts, plows. Just a short jeepney ride from the prosperity of the Subic Economic Zone, Castillejos’s upland areas are a world apart, separated from modern life by a brutal, hard­scrabble landscape.

Myself no stranger to grinding rural poverty, the conditions in Castillejos’s upland areas still push me to ask why there are places on earth that desperate.

It is in this context that I ask this disturbing question: What ill wind or warped reasons pushed Senator Magsaysay Jr., the legislator who should care most about agriculture, to oppose a presidential Executive Order (EO 558) that authorizes government agencies to lend directly to agriculture?

Mr. Magsaysay knows very well that the biggest curse to agriculture is a nasty credit squeeze and this has pestered farmers from time immemorial. Credit lack is the tungro of the farming class. There is no way agriculture can move without credit support. Fertile land and adequate irrigation are a must but the trinity of needs has to be complemented by production loans. And filling up the credit void can only come from direct lending to farmers—by government preferably.

EO 558 might even bring some light and hope into the desperate hamlets of Castillejos, Zambales, which Mr. Magsaysay, even with his thriving cable TV business, cannot lift out of darkness and poverty by his lonesome.

In the skewed reasoning of Mr. Magsaysay, the loans will be used by Mrs. Arroyo to curry political favors with the peasantry. The loans to be released under the direct lending provision of EO 558 will be used to buy votes in 2007 and beyond, he said. This may be true and this maybe the real intent of the EO. But this would apply only in the real world if farmers are as pliable as the usual buy-my-vote cliques. Farmers, if Mr. Magsaysay does not know this yet, are among the most hono­rable human beings in this country and the long and bloody history of the peasant struggle adequately proves this.

The fact is Mr. Magsaysay’s father, the late President Ramon Magsaysay, became president after crushing the peasant-based Huk movement. The peasant-fighters, the late president found out, were more honorable opponents than the business elite and politicians that he faced during his years in public service.

Mr. Magsaysay, also argued that EO 138, which EO 558 repealed, was the best deal for farmers. Under 138, the banks and special government agencies had the exclusive mandate to lend. In effect, lending had to be done through formal conduits. No direct lending from government at cheap interest charges was allowed under 138.

Mr. Magsaysay invoked 138 without the benefit of elementary fact-checking.

Had he done so, Mr. Magsaysay would have found out the following:

• Commercial banks would rather pay heavy penalties than lend to agriculture

• Commercial banks would rather buy government securities—which is an alternative compliance to PD 717, or the Agri-Agra Law—than lend to agriculture

• Bangko Sentral ng Pilipinas stats show that the growth of agricultural lending is less than one per cent on a year-on-year basis

• The bulk of bank loans goes to financial intermediaries and real estate. Agriculture, which make up more than 20 percent of all economic activity receives a pittance from the banks’ gross lending

• While the Agri-Agra Law requires banks to lend 25 percent of their gross loans to farmers and agrarian reform beneficiaries, lending to the agrisector in the first quarter of 2006 was only 7 percent and 90 percent of that went to agribusiness giants and not to small farmers that need the loans most.

Had Mr. Magsaysay carried out some elementary research to learn more about agrilending before his premature indictment of 558, he would have found out that even the Land Bank of the Philippines and the Development Bank of the Philippines, two state-owned KBs, have been lending to agri­business giants and agri­business corporations and not to farmers. If ever they lend to agriculture at all.

We state our case clearly Mr. Magsaysay and this is it: We farmers prefer the government as the direct lender, even if the lending program were supervised by Joc-Joc Bolante.


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