A MEASURE proposing to allow farmers to use their crops as collateral for bank loans has been filed in the Senate.
Under Senate Bill No. 632, Senator Francis N. Pangilinan sought to update Act No. 2137, or the 107-year-old “Warehouse Receipts Law.”
“The law, as it stands, does not allow farmers to use their crops as collateralize for taking a loan because banks are not able to verify the quantity and quality of crops by virtue of the existing warehouse receipts,” Mr. Pangilinan said in a statement Sunday.
“This, among other modern and technological advances for transparency and efficiency, needs to be accounted for. Hence, we are pushing for this measure.”
The bill among others provides for the creation of an online warehouse receipts registry to serve as a database of warehouse receipts, warehouse operators, and warehouses.
The bill noted that warehouse receipts, issued by accredited operators, serve as evidence of “title over goods stored at a warehouse.”
“This will be an instrument of transparency that will allow the public, banks, and other financial institutions to access relevant data for validation. Warehouse receipts can serve as evidence and farmers will now have a way to credibly prove their harvest thereby allowing them to secure loans,” Mr. Pangilinan said.
The bill also provided for the establishment of a seven-member Warehouse Accreditation Council and a warehouse receipts assurance fund.
The Council is to be led by the Chair of the Security and Exchange Commission, and will include the Secretaries of Trade and Industry, Finance, and Agriculture. The other three members will represent the warehouse industry.
Meanwhile, the proposed warehouse receipts assurance fund will be established to shoulder losses involving warehouse receipts caused by registry-based failures. The funding will be partially sourced from one-fourth of 1% of the assessed value of the goods covered by the warehouse receipt.
“While this measure will also benefit other industries, we certainly hope that it will further improve the agriculture sector. We hope that farmers will be given more financing options to help improve their yield or for other emergency purposes. We reiterate that progress in the agriculture sector must be measured in the improvement in the lives of farmers,” Pangilinan said.
“We must do everything within our power to empower the farmer,” he said. — Charmaine A. Tadalan