From Farmers to Agripreneurs: Financing Micro and Small Agribusinesses with the Agri-Negosyo (ANYO) Loan Program

The Department of Agriculture’s first pillar in the New Thinking in Agriculture is the modernization of the agriculture and fisheries sector, which includes the use of modern technology to increase efficiency and yield of farmers, and the empowerment of farmers as agricultural entrepreneurs (agripreneurs). “Agripreneurship should also form part of the paradigm to modernize Philippine agriculture, as farming and fisheries should be treated as business undertakings or industries,” says DA Secretary William Dar.

Through its slogan, “Masaganang Ani, Mataas na Kita,” the Department highlights the need to empower small farmers to not only increase their crop production and yield, but also to increase their income. To achieve this, they must be transformed from mere producers of raw materials to owners of agribusinesses, or agripreneurs, with value added to their products and marketing in order to maximize their profits.

Transforming farmers into agripreneurs

In a country where farmers and fisherfolk post the highest poverty incidences among the basic sectors—at 31.6 and 26.2, respectively in 2018 (PSA, 2020)—it is a challenge to redefine the common perception of the general public that equates farming with poverty.

It is a cycle that the Department is striving to break, as its programs and corresponding strategic communications aim to inspire and uplift farmers, encouraging them to avail themselves of the technical support, subsidies, and financial assistance made available to them. In order to achieve the targeted growth in the sector, existing farmers must first realize that they can earn more by venturing and expanding into more viable and sustainable means of farming and agribusiness.

According to the Philippine Board of Investments (BOI), “The transformation of agricultural farming into a thriving agribusiness-driven sector […] can contribute not only in diversifying and increasing the value of agribusiness outputs, but also contribute to the inclusive growth and rural development agenda of the Philippine government. Because of this, the agribusiness sector is positioned to largely contribute to the industrial development of the Philippine economy.” Among its recommended strategic actions is to provide support to small farmers, including access to technologies to improve their production, and access to finance to fund their projects.

Local agribusinesses and agripreneurs will also contribute to the country’s sustainable food security. As the Food and Agriculture Organization of the United Nations (FAO) notes, “Agribusiness entrepreneurs, or agripreneurs, play a particularly important role in developing countries, in a sector where most of the population operates. In creating, growing and sustaining agribusinesses and agro-industry, agripreneurs are the key drivers of sustainable food value chain development” (FAO, 2019).

Micro and small agribusinesses and their access to financial services

In order to transform from a small farmer into an agripreneur, however, the farmer needs access to capital, equipment and facilities. Then again, as noted in the earlier section on the banking system’s Loans to Agriculture and Compliance with the R.A. 10000, there is a low proportion of loans given to agriculture despite the mandate of the Agri-Agra Law. Adding the fact that 31% of municipalities (all outside of NCR) remain unbanked, it is clear that a small farmer has low chances of availing themselves of a loan under a formal financial institution.

Thus, the DA-ACPC’s low-interest, accessible credit programs, implemented by government financial institutions (GFIs) and accredited Non-Government Financial Institutions (NGFIs), including rural banks, cooperative banks, cooperatives, associations and viable non-government organizations (NGOs), aim to provide loans at the grassroots level to small farmers who would otherwise be financially unserved.

In response to the COVID-19 pandemic, the recently-launched Agri-Negosyo (ANYO) was rolled out in 2020 to provide zero-interest loans for small farmers and fishers (SFF) and registered micro and small agri-fishery enterprises (MSEs), including sole proprietors, partnerships, corporations, associations and cooperatives. Eligible individuals may borrow a maximum loanable amount of Php 300,000 while registered micro and small enterprises, depending on their assets, may borrow a loan amount of Php 300,000 to Php 15 million. Loans are payable up to five (5) years.

Agri-Negosyo in the time of the pandemic

While the early onset of the COVID-19 pandemic brought about a sense of uncertainty, especially with initial implementation of the enhanced community quarantine (ECQ) limiting the transportation of goods, the general public gained awareness on the importance of food security. This, coupled with the wave of unemployment the pandemic brought about, has encouraged some to pursue agribusiness as an alternate livelihood.

In a GoNegosyo webinar entitled Kumita sa Agri-Negosyo, with the theme “Agribusiness in the New Normal: How to Start, How to Scale Up, The Challenges, and Opportunities,” GoNegosyo founder and Presidential Adviser for Entrepreneurship Jose Maria “Joey” Concepcion III stated, “Many who have lost their jobs have the opportunity to move into agriculture. Whether you are in rural areas or whether you are at home, you can start your own agribusiness. This is the time when agribusiness should shine.”

In the same forum, DA Secretary Dar further provided encouragement to those seeking to venture into agribusiness. “Let us turn challenges into opportunities to survive, and move towards a food-secure Philippines with prosperous farmers and fisherfolk.”

This has surely been the case for some ANYO borrowers, as they were able to avail themselves of the program in order to revive and rehabilitate their livelihood.

Under the special window for repatriated OFWs (ANYO-OFW), those who lost their jobs abroad due to the pandemic were granted loans to pursue agribusiness as a new means of income.

Featured below are the stories of some of our ANYO beneficiaries.

Miriam Pertez
Individual SFF, rice and cacao

Rice farmer Miriam Pertez from Malaybalay, Bukidnon was able to avail herself of a loan amounting to Php300,000 under the ANYO program through the ACPC’s partner lending conduit, the Philippine International Travel Assistance Center Multi-Purpose Cooperative (PITAC MPC), a cooperative that provides agri financing assistance to farmers.

Miriam, whose father was originally a farmer, worked as a seamstress for 20 years, even venturing abroad to Brunei and later Jeddah as an overseas Filipino worker (OFW). In 2018, Miriam and her husband moved from Manila to her home town of Malaybalay, Bukidnon and started their rice and cacao farm of 1.3 hectares. As a small rice farmer, she borrows the use of a dryer and miller to process her palay into rice.

In 2018, Miriam also joined the PITAC MPC and was able to avail herself of a Php 50,000 loan under the ACPC’s previous program, the Program for Unified Lending in Agriculture (PUNLA).

She said she was also able to attend the DA’s training sessions on cacao. While she already harvests from her cacao trees for household consumption, she plans to make this into a commercial venture in the future.

In 2020, she heard about the ANYO loan program through the PITAC MPC, and with her good credit standing, was able to apply and avail herself of a working loan amounting to Php300,000 to finance her rice production and processing, and augment her income by buying and selling rice.

When asked what advice she would give to her fellow farmers and those looking to venture into agriculture, she emphasized the need to manage personal finances and prioritize needs over wants. “Work hard and manage your money wisely. Kailangan matuto munang magtipid para umasenso sa buhay.”

These days, Miriam enjoys her time in the province with her husband and her daughter, who recently came home after also working abroad. Miriam’s story mirrors that of many Filipinos who come from a family of farmers, end up moving to the metro or abroad to work, and finally aspire to settle back down to their home town or in the countryside to be with family.

Miriam embodies small farmers who are willing to venture into diversifying their crops, join cooperatives, attend training and avail of government programs to increase their productivity and improve their profitability. She also embodies small farmers who are financially savvy, thus are willing and able to utilize and repay their loans wisely.

Kerwin Perez
Eggciting Traditions Processed Foods Manufacturing

Agripreneur Kerwin Perez is the owner of Eggciting Traditions Processed Foods Manufacturing, a salted egg business which was started by his parents in 2008 to complement their duck farm located in San Jose, Batangas. In 2012, Kerwin took over the business and formally registered it under the name Eggciting Products Manufacturing. As a food microbiologist, Kerwin was able to upgrade his company’s curing technology in 2017 by developing and utilizing his own patented semi-automated rapid hygienic curing process for salted egg production.

Kerwin’s innovative and award-winning rapid hygienic curing process reduces shell egg curing time to less than 5 days (traditionally 14 days and above) and extends its unrefrigerated shelf-life to more than 6 months (compared to the 1-week shelf life of ordinary salted eggs).

https://acpc.gov.ph/from-farmers-to-agripreneurs-financing-micro-and-small-agribusinesses-with-the-agri-negosyo-anyo-loan-program/