Mexican President Andrés Manuel López Obrador sent reforms to the Chamber of Deputies to eliminate the decentralized public body, National Financing Agency for Agricultural, Rural, Forestry and Fisheries Development (FND)for considering it “stunted” and “incapable of promoting rural development”.
The Mexican president’s proposal also seeks to repeal the organic law of the FND, in charge of supporting producer organizations in the rural areas of the country with budgetary resources.
As of today, the FND is an atrophied organization, incapable of fulfilling its objective of promoting rural development, raising productivity, and improving the level of the population through credits to the sector.”
accused López Obrador.
According to the explanatory statement of the Mexican president, the ultimate goal of his initiative “is to make public resources more efficient for the agricultural, rural, forestry, and fishing sectors.”
Likewise, it promotes that the resources of this fund “be delivered directly to the beneficiaries, without intermediaries and without expenses in unnecessary administrative infrastructure.”
The document that will be analyzed by the Mexican deputies also states that 21 years after its creation, after replacing, in December 2002, the National Rural Credit Bank (Banrural)has only granted loans to a small number of agricultural, forestry and fishing producers.
In addition, it indicates that it has operated with financial intermediaries and under a “design that ignored effective collection mechanisms.”
In this sense, the Mexican president detailed in his initiative that in the last two decades these inefficiencies have caused his overdue portfolio to amount to 26.703 million pesos (about 1.477 million dollars).
This, accused the Mexican president, has also implied the hiring of external firms and lawyers to carry out judicial collection at the national level with a “high cost and little effectiveness in the recovery of credits”, among 28,621 cases registered in past-due portfolio. of the NDF.
Additionally, it is mentioned that the imbalance of Financiera Nacional de Desarrollo is aggravated by its liabilities contracted with international financial organizations, which amount to 16,509 million pesos (913.2 million dollars).
Likewise, it states that the fixed expenses for maintenance services, surveillance, payment of contributions, patrimonial insurance, and movable and immovable property that must be carried out “regardless of the financial effectiveness of the FND agencies.”
In summary, it exposes the NDF It has a serious problem of financial imbalance, which is reflected in the high past-due portfolio concentrated in intermediary financial companies that grant credit to producers who least needed it”.
As well as “its insignificant participation in the credit market of the agricultural sector, an inefficient collection delegated to external offices, its high financial liability and unjustifiable administration costs.”
This presidential initiative was turned over to the Finance and Public Credit Commission of the lower house of the Mexican Congress for analysis, discussion and possible ruling.
If approved by said legislative committee of the Chamber of Deputiesit will proceed to its discussion and possible approval before the plenary session of legislators to be sent to the Mexican Senate for the same procedure, prior to its official publication, if it is endorsed in this second legislative instance.
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