LOS BANOS – Many Filipino farmers are not protected from erratic weather, pests and diseases – in a country that pioneered crop insurance in Southeast Asia.
“The adoption of crop insurance is still wanting,” said Dr. Flordeliza H. Bordey, a socio-economist at the Philippine Rice Research Institute (PhilRice), pointing out that only 4.1 million farmers were insured up to 2014, from 1981 when the Philippine Crop Insurance Corporation (PCIC) started rolling out its products.
Today, weather extremes make wider coverage urgent. In 2013, Bordey said, Super Typhoon Yolanda destroyed 106,000 hectares of rice fields; 200,000 metric tons of rice worth P 3.23 billion were lost.
Corn is also affected by extreme climatic shifts, said Dr. Jose M. Yorobe, Jr. of the Department of Agricultural and Applied Economics, College of Economics and Management, University of the Philippines Los Banos (UPLB). Droughts – as well as pests and diseases – were the major causes of the accumulated losses from 1995 to 2004 estimated at P7.2 billion; yields were down 33 percent.
“It was only in August last year when our farmers started harvesting crops from what they replanted after Typhoon Yolanda,” said Senator Cynthia Villar. “In terms of access by the poor to insurance products and services, only about 2.9 million of the 26.7 million Filipinos who were below the poverty line in 2006 had some kind of risk protection.”
Villar, the Chair of the Senate Committee on Agriculture and Food, was speaking at a conference attended by research and financial institutions from the Philippines, Indonesia, Malaysia, Thailand and Vietnam. Convened by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture, PCIC, PhilRice and the Food Security Center of Germany’s University of Hohenheim, they explored ways to bring safety nets to farmers highly vulnerable to climate change.
Bordey, citing data from a 2012 PhilRice survey of farm households in Nueva Ecija, Iloilo and Leyte, said that generally only 10 percent of farmers had crop insurance. That’s a “low” adoption rate, she said, noting that only a third of them were willing to enroll in crop insurance.
The low subscription rate is mainly attributed to high insurance premiums, complicated documentary requirements and inadequate operational support, said Dr. Felino P. Lansigan, Dean of the College of Arts and Sciences, UPLB.
PCIC’s insurance penetration in 2014 for rice was 11.19 percent, 5.08 percent for corn and less than 1 percent for high value crops, livestock, fisheries and aquaculture, said PCIC Senior Vice President Norman R. Cajucom.
The numbers pale in comparison to penetration rates in other countries, albeit rich ones. Celia M. Reyes, a Senior Research Fellow at the Philippine Institute for Development Studies, said farming insurance coverage is 100 percent for herd and poultry and 52 percent for both crops and livestock in Sweden; it’s 50 percent for crops in Australia and Japan; and up to 90 percent coverage for all crop insurance products in the United States.
The Philippines started crop insurance in Southeast Asia. Of 11 countries in the region, only the Philippines, Indonesia, Malaysia, Singapore and, in pilot programs, Thailand and Vietnam have agricultural coverage. Only the Philippines, Indonesia,
Thailand and Vietnam are providing government support to agricultural insurance.
PCIC cumulative insurance in the 34 years from 1981 to 2014 provided coverage worth P140.861 billion for more than 6.445 million farmers, Cajucom said. The areas covered peaked from 157,444 hectares in 2010 to 792,208 hectares in 2014. During the same period, PCIC paid P5.127 billion to more than 1.361 million farmers.
“Insurance is vital because most of the 70 percent of Filipinos in rural areas are small farmers whose livelihood depends on agriculture,” he said.
The state-owned PCIC, formed in 1978, started to provide crop insurance in 1981 and livestock insurance in 1988. Rice and corn insurance remains its major product although PCIC also covers high value commercial crops, particularly fruits and vegetables.
With a budget of P1.3 billion for 2015 and P1.6 billion in 2016, the PCIC covers a range of crops from abaca to strawberry to rice and corn and a host of livestock from chicken to carabao as well as warehouses, rice mills, poultry houses, pig pens and processing facilities.
In 2001, insurance was expanded to fish ponds, fish cages and pens, seaweed and other aquaculture farms; due to funding problems, it was implemented only in 2011 and now covers unharvested stocks, processing and storage facilities, equipment and boats.