Sikat Saka Program

The Department of Agriculture

Cecilia A. Parcon

Ulat sa Bayan May 8, 2013

Bololmala, Tupi, South Cotabato

Program Background

The DA-Sikat Saka Program was

launched by the DA and

LANDBANK in January 2012 in

support of the Government’s Food

Staples Sufficiency Program (FSSP).

Program Background

• The DA & LANDBANK forged partnership to provide direct credit assistance to small palay farmers for their palay production project.

• The DA tapped its agencies and corporate arm and the IAs to provide an integrated support to small palay farmers such as extension and administrative services, assured market and irrigation

Program Background

The program is currently being pilot implemented in four (4) major rice producing provinces namely:

Isabela

Nueva Ecija

Iloilo

North Cotabato

The program is currently under its second cropping season.

Program’s 2012 Performance

3,341,282.60

44,822,732.00

3,846,374.00

69,067,770.00

0.00

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

70,000,000.00

80,000,000.00

1-Aug-12 1-Sep-12 1-Oct-12 1-Nov-12 1-Dec-12

Lo

an A

mo

un

t

31-Aug-12 31-Dec-12

Loan Releases 3,341,282.60 44,822,732.00

Loan Amount Approved 3,846,374.00 69,067,770.00

Loans Approved and Released First vs Second Season

Approved Accounts

DA-SIKAT SAKA

Amount Released As of

31 Dec 12 January to March 2013

Total as of 31 March 2013

On Process

- Kidapawan - Midsayap

3.587,582.00 12,667,500.00

6,150,800.00 1,905,500.00

9,738,382.00 14,573,000.00

5,383,500.00 8,200,000.00

Total 16,255,082.00 8,056,300.00 24,311,382.00 13,583,500.00

Number of Farmers

246 161 407 162

- Kidapawan - Midsayap

57 189

81 80

138 269

82 80

Area 439.50 220 659.50 345.50

- Kidapawan - Midsayap

95 344.50

168.50 51.50

263.50 396

145.50 200

439.50 220 659.50 345.50

Accounts with Loan Releases (North Cotabato)

DA-SIKAT SAKA

Date No. of IAs No. of FBs No. of Has. Amount Released

January-February 10 38 99.00 3,607,000.00

March 4 32 28.00 2,509,595.00

April 7 28 43.50 1,477,100.00

Total 21 98 170.50 7,593,695.00

Program Objectives 1. To assist the palay farmers in financing their palay production

requirements in a timely manner and at an affordable cost

2.To improve the viability of palay production by ensuring

availability of irrigation and extension services, and

market.

3. To expand the credit outreach and increase palay production

for food self-sufficiency

Program Partners

Agricultural Credit Policy Council

Agricultural Training Institute

National Agribusiness Corporation

National Food Authority National Irrigation Administration

Philippine Crop Insurance Corporation

Irrigators’ Associations

DA Sikat Saka Program

Provincial Action Teams

(PATs) Composed of personnel from:

DA Regional Office

• ATI

• NIA

• NFA

• PCIC

LANDBANK

SALIENT FEATURES

DA Sikat Saka Program

Lending Schemes

• Direct Lending

• Lending thru Conduits

DIRECT LENDING

SCHEME

DA Sikat Saka

Eligibility Criteria

Irrigators’ Associations (as credit consolidator)

•Endorsed and certified by the National Irrigators

Administration

Eligibility Criteria

Small Palay Farmer

(New borrower) • Is a member of an eligible IA

• Owns/Tills an irrigated land of at least 0.5

hectares;

• Has no existing loan with LANDBANK and its

existing conduits for the past six (6) months.

Eligibility Criteria

Small Palay Farmer • Must have a purchase order (PO) or market

contract with NFA or NABCOR, or other reliable

buyers.

• The farmer must attend a seminar on financial

education.

• Shall be required to submit his land title or any

proof of ownership of other assets to LBP for

safekeeping.

Purchase Order and Loan Payment

NFA, NABCOR and other reliable buyers shall issue purchase orders to, and/or execute Marketing Agreement with the FARMERS

NFA/NABCOR shall pay the farmers by way of check or cash deposit to their ATM accounts.

Credit Facility

Agricultural Production Loan

for Palay

Loan Ceiling

Loan Ceiling

Inbred Hybrid

Palay Farmer P41,000.00 per

Hectare

P50,000.00 per

Hectare

Maximum of 5

hectares per

borrower

Loan Limit

P205,000.00 P250,000.00

Credit Bulletin No. 2013-001 & 2013-002

Interest Rate

15% per annum for the first two cycles

Reduced by 1% for every succeeding cycle on loans fully paid on time up to the 8th cycle

DA-Sikat Saka ATM Card

Is a pre-release loan requirement for the

farmer-borrowers under the program.

DA-Sikat Saka ATM Card

• Crediting of loan proceeds

• Crediting of payment on the farmer’s produce

• Debiting of loan payment

• Farmer’s deposit build up

IA incentive

Cash Incentive* (Per Cropping Season)

Collection Rate (Per Batch)

0.50% at least 90%

1.00% 100%

*of the principal amount of loans paid on time

Past Due Loans The LC shall conduct 100% validation of defaulting

farmers.

The LC shall notify a wilfully defaulting farmer and

endorsing IA of such default which will serve as

basis of IA to take over the management of the farm.

Management Take-Over

Agreement

The endorsing IA shall:

• takeover the operations of the farm of a wilfully

defaulting farmer.

• prepare a plan of payment

• have the option to assign a new farmer to till the

land.

Management Take-Over

Agreement

• All profits from farming operations shall accrue to

the IA subject to the payment of loan of the

defaulting farmer until fully paid.

• The palay production project may be provided with

additional financing by LANDBANK

LENDING THRU CONDUITS

DA Sikat Saka

Eligible Credit Conduits

Rice Productivity Program (RPP) lending policies and

guidelines shall be adopted subject to the following

conditions:

• Irrigators Associations & Cooperatives only

• Not yet accredited by LANDBANK (For Coops

only)

• Have at least one (1) year experience in relending to

its members

The credit conduit shall:

• require the borrowing farmer to submit his land

title or any proof of ownership of other assets for

safekeeping.

• also be entitled to the cash incentive

Eligibility Criteria

Small Palay Farmer (New Borrower)

• Is a member of an eligible IA or Coop

• Owns/Tills an irrigated land of at least 0.5 hectares

• Has no existing loan with LANDBANK and its

existing conduits for the past six (6) months

• Shall be encouraged to open a special DA-Sikat Saka

ATM account with LANDBANK

Interest Rate Shall be based on RPP pricing

8.5% per annum

Pass-on Rate to eligible sub-borrowers

15% All-in

LANDBANK ROLES

1. Provide loan funds

2. Evaluate and process loan applications

3. Approve and release loans to palay farmers

4. Ensure that all loans under the program are covered by loan guarantee

LANDBANK ROLES

5. Provide incentives to IAs based on collection efficiency and promptness of payment

6. Manage and monitor the program and individual accounts and administer the funds.

7. Regularly furnish DA reports as loans approved and released

8. Collect past due loans