WEATHER-based crop insurance will help release assistance for disaster-affected farmers “with less argument,” according to House Deputy Majority Leader Las Piñas Rep. Camille A. Villar.
Villar is proposing that crop insurance extended to agriculture sector should be based on weather conditions, such as rainfall, typhoon or drought.
This was the main reason for her to file House Bill 3310 or the Free Index-Based Agriculture Insurance (Fibai) Act of 2019.
“Weather index-based crop insurance or Wibci, is a unique insurance product based on the occurrence of breach of a weather-based parameter, which serves as legal proof of the occurrence of extremely adverse weather conditions and proxy for the expected crop damage,” Villar said.
The lawmaker hopes that through the bill, the government will be able to expand the coverage and mandate of the Philippine Crop Insurance Corp. (PCIC).
Apart from weather-based insurance, the bill also supports re-insurance to provide a second layer of protection to help the originating insurance providers in absorbing shocks from disasters and spreading out their risks.
This enables originating insurance providers with predictable financial relief, greater capacity to insure more and more farmer clients and strengthen societal resilience.
She said the program will require around P5.8 billion per year to be initially sourced from the Risk Management Fund (unprogrammed appropriations) to potentially cover the premiums for 2.8 million hectares of rice lands.
“To effectively reach and serve more of the country’s 5 million small-hold farmers, provide them with greater resiliency, there is a need for the country to involve the private sector and adopt a more relevant strategy and also safeguard the food security of the broader rural population,” the young House leader said.
From 2013 up to 2017, Villar said Congress has appropriated an average of P1.55 billion annually to subsidize PCIC insurance premiums of up to 600,000 hectares of rice farms nationwide.
However, Villar said out of almost P380 billion in palay production in 2014, the PCIC only insured around P12.2 billion, representing roughly 3 percent of potential insurable value.
She added that majority of small farmers were uninsured because of the inadequate resource base and outreach of the PCIC.
“Weather Index-based Crop Insurance or Wibci has become a very popular mode of providing risk transfer on the part of millions of farmers in a growing number of countries in Asia, Africa and Latin America,” Villar said.
The lawmaker pointed out that the country has around 5.5 million small-hold farms nationwide. Majority of them are in Luzon, Mindanao, Negros and Panay Islands, and the Mimaropa island group.
Around 2.4 million farmers are into rice production, each tilling an average of 1.14 hectares or a total rice area of 2.88 million hectares.