Philippines: Loans for Tobacco Farmers to Fund Irrigation Systems

Source from:  Business World Online 02/22/2012

THE NATIONAL Tobacco Administration (NTA), an attached agency of the Department of Agriculture (DA), has set aside P74 million in loans to assist tobacco farmers in establishing small irrigation systems, an official said yesterday. The loans shall be distributed in cash, NTA Administrator Edgardo D. Zaragoza said in a statement, for the purchase of small irrigation system facilities. According to the department, 937 tobacco farmers from 77 municipalities have expressed interest in availing of the loan. Mr. Zaragoza said that of the interested farmers, 419 are from Ilocos Sur, 126 from Ilocos Norte, 111 from Cagayan, 100 from Isabela, 88 from La Union, 77 from Abra, 10 from Pangasinan and six from Tarlac. The loan is subject to the NTA's implementing guidelines. For one, the maximum amount to be lent shall be dependent on the total land area of the farm: P30,000 for a 0.50-hectare to 0.60-hectare land; P35,000 for a 0.61- to 0.80-hectare land; P45,000 for an 0.81-to one-hectare land; and P60,000 for more than one hectare. The repayment period will also depend on the amount borrowed by the farmer: for a loan amounting to P25,000 to P30,000, the money must be paid back within three years; for P31,000 to P50,000, within four years; and for P50,000 or more, within five years. Interest will be at 6% per year and will be based on the diminishing balance of the principal amount of the loan. Interest shall be charged upon completion of the project or upon the farmer's acceptance of the money. The NTA will also collect a one-time 1% service fee. The payments shall be taken from the revenue from the sale of tobacco, rice, vegetables and other crops from the next cropping season. Mr. Zaragoza said the loan will also be based on the type or the package of irrigation system necessitated by an individual farm. The system could be any of the following: a shallow tube well system, an open well or ring well system or a small farm reservoir. Shallow tube wells should be used in a farm with "a shallow aquifer and groundwater yield potential" and "without history of salt water intrusion" so that ample water for crops may be ensured, the statement noted. Meanwhile, an eight- to 12-meter deep open well or ring well would be the preferred type of irrigation for farms without access to electric power supply, as these can use pumps and fuel-powered engines. Lastly, a small farm reservoir system would be best for an area with "high water holding capacity, [ideal] soil quality and [a] hardpan at the innermost layer to prevent water loss," the statement noted. A farm applying for this type of irrigation system should also not be accessible to any other type of communal irrigation, such as those managed by the National Irrigation Administration. Mr. Zaragoza said that the corresponding equipment in each irrigation package, particularly the pumps and the engines, will be chosen by the farmer. The labor cost will also be shouldered by the farmer. The irrigation systems shall also be built following NTA-recommended designs and specifications. Enditem