New ADB loan to boost farm productivity
- Melo Acuna
- Aug 12, 2020
- 2 min read
ADB approves US$400 million loan to help farmers increase their incomes
MANILA – The Asian Development Bank (ADB) approved a US$400 million policy—based loan to assist reforms by the Philippine government to raise the productivity and competitiveness of the country’s agriculture sector and reduce poverty in rural areas.
In a statement released today, the ADB said the Competitive and Inclusive Agriculture Development Program, Subprogram 1, will help the government expand economic opportunities in thee farm sector by implementing trade policy and regulatory reforms, enhancing public services and finance to the sector and expanding social protection to rural families.
“The Philippines has made tremendous strides in reducing the national poverty rate, but rural poverty remains high because of low productivity and limited crop diversification,” said ADB Vice President Ahmed M. Saeed. He explained the loan will support the government’s comprehensive suite of policy and regulatory reforms and resolving institutional weaknesses in land and water management, expanding agricultural financing to boost productivity, and extending the social safety net to unserved and underserved rural families.
According to the ADB, the agriculture industry employs a quarter of the country’s labor force. However, the sector lags behind counterparts in other Southeast Asian countries in productivity growth and competitiveness. Poverty rates in rural Philippines remains high, as do child malnutrition and stunting. The government has identified agriculture as a priority area for reform with the COVID-19 pandemic as it seeks to ensure food security and reduce poverty in the country.
The Competitive and Inclusive Agriculture Development Program, Subprogram 1, is the passage of the 2019 Rice Tariffication Act and the different measures it provides. The new law deleted quantitative restrictions on rice imports and replaced them with a pure tariff system.
The collected duties on imported rice, the government set up the Rice Competitiveness Enhancement Fund (RCEF) to revitalize the rice industry in accordance with the Philippine Rice Industry Roadmap. The government is also initiating additional reforms in land and water resources in addition to investments in irrigation.
Other reforms supported by the loan include additional assistance to farmers making the transition to higher value crops and those affected by the COVID-19 pandemic. These include unconditional cash grants and the Expanded Survival and Recovery Assistance Program for Rice Farmers to provide zero-interest loans to more than 160,000 small farmers. The program also supports the government’s pre-school feeding programs to familis to reduce malnutrition and stunting.
It will be complemented by upcoming investments to enhance flood risk management in major river basins, improve irrigation efficiency as well as promote agro-enterprise development. (Melo M. Acuña)

A snapshot from the rural areas on the Philippines. (ADB Photo)
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