The Asian Development Bank (ADB) issued a press release that they would be extending a total of $100 million in loans for a project intended to assist some of the estimated 150,000 poor farmers in southern Philippines – which includes six provinces in the autonomous region of Muslim Mindanao that have high levels of poverty. The funding consists of a loan of $70 million from ADB’s ordinary capital resources (OCR), and an additional $30 million from the OPEC Fund for International Development (OFID), which is administered by ADB. In addition to what ADB is funding, the Philippine government is contributing $52.4 million and local government units are contributing $56 million. All of the funding will go to the The Agrarian Reform Communities Project II (ACRP) which will allocate $135.2 million for rural infrastructure projects and $25.2 million for agriculture and enterprise development. The remaining funds will be used for capacity building, project implementation management, and contingencies.

ACRP aims to train farmers on how to participate in infrastructure programs as well as enhance the agribusiness activities that support the Comprehensive Agrarian Reform Program (CARP), which attempts to redistribute land among farmers and help them become market-oriented producers.

Risa Hontiveros, a representative in the Philippines House of Representatives attempting to pass the project implementation commented, “As long as there is one landless farmer who meets the requirements to be a beneficiary but does not own the land he tills, we are committed to ensuring that there will be funding for the acquisition of land from his landowner and its subsequent redistribution to him.”

The first implementation of the Agrarian Reform Communities Project began in 1998 and assisted 165 agrarian reform communities in 35 provinces. Mrs. Hontiveros said there are 4.5 million farmers whose lives are better off because of CARP

According to ADB, The project will target capacity building for organizations of agrarian reform, improve rural infrastructure and distribution networks, including farm-to-market roads, bridges, small-scale irrigation systems, post-harvest facilities, and widen the access of target communities to social infrastructure such as potable water supply systems and other community facilities. Technology will be leveraged to boost farming productivity. The project will partner with micro-finance institutions and nongovernmental organizations to develop new agricultural enterprises and markets. There will be an emphasis on building stronger, more representative farmer organizations with vulnerable groups, particularly women, involved in the consultation process for new development initiatives.

“The project will substantially expand the rural production base by assisting the poor to break out of subsistence farming, to diversify their livelihood activities, to raise production and distribution efficiencies, to improve their market position, and to provide employment opportunities for landless households,” said Manoshi Mitra, senior social development specialist at ADB’s Southeast Asia Department.

ADB’s OCR loan will have a 25-year repayment period, including a grace period of five years, and an interest rate based on the ADB London interbank offered rate-based lending facility. The OFID loan, on the other hand, will have a 20-year maturity, with a five-year grace period, a 1-percent service charge and a 3-percent interest rate.

Based in Manila, Philippines, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants and technical assistance. In 2007, it approved $10.1 billion in loans, $673 million of grant projects, and technical assistance amounting to $248 million.

Scott Everett, Research Assistant

Additional Resources:

NEWS.BALITA.PH: Home, “Solon calls for passage of CARP extension law”, November 10, 2008