Crop insurance

IF many of the country’s small farmers, particularly in far-flung communities, remain uninsured, blame it on inadequate resource base and outreach of the Philippine Crop Insurance Corp. (PCIC).

During a five-year period (2013-2017), Congress appropriated an average of P1.55 billion a year to subsidize the PCIC insurance premiums on up to 600,000 hectares of rice farms in the Philippines.

And official government records showed that in 2014, the PCIC just insured around P12.2 billion worth of crops or roughly three percent of potential insurable value.

Aware of the situation, House Deputy Majority Leader and Las Piñas City Rep. Camille A. Villar has filed a bill in the House of Representatives which seeks to address the problem.

A neophyte lawmaker, Villar suggested indexing the crop insurance to weather conditions to facilitate the insurance coverage process and speed up payments to farmer-beneficiaries, cutting red tape significantly.

“Weather index-based crop insurance (WIBCI) is a unique insurance product based on the occurrence of breach of a weather-based parameter which serves as proof of the occurrence of extremely weather condition and proxy for the expected crop damage,” she said.

Weather-index-based insurance is an attractive approach to managing weather and climate risks because it uses a weather index, such as rainfall, typhoon or drought, to determine payouts.

In her House Bill (HB) No. 3310, Villar explained that WIBCI, as an innovation, requires less administrative costs in terms of selling the product, administering the policy coverage and monitoring over wide areas.

We share the view of Villar that the WIBCI-type insurance will improve and expand the current coverage and mandate of the PCIC.

Compared with the total number of farmers that is supposed to be served, the PCIC has too few participants and very miniscule coverage.

Thus, the country’s lawmakers have no choice but to speed up the approval of HB No. 3310.