The forum on Evaluation of the Impact of the Agricultural Insurance Program of the Philippine Crop Insurance Corporation (PCIC) held last 6 December 2016 at the Speaker Nograles Hall, House of Representatives was co-sponsored by the Congressional Policy and Budget Research Department (CPBRD) and the Philippine Institute for Development Studies (PIDS). Dr. Celia Reyes, a Senior Research Fellow of PIDS and author of the report, presented the results of the evaluation.
In her presentation, Dr. Reyes first pointed out the benefits of the insurance program to farmers which include, among others: a) helps farmers manage risks, b) provides farmers funds to cover production costs for the next season, c) helps farmers to finance household expenditures after a shock, and d) that the program is better than the agricultural guarantee fund. She also explained that agricultural insurance can be an effective risk management tool that can significantly reduce poverty among agricultural households.
On the evaluation of the PCIC’s insurance program, the report’s main findings include, among others: a) low level of awareness about PCIC programs among farmers and local government units, b) low penetration rate in certain regions and groups of farmers, c) funds for special programs are not enough to cover all eligible beneficiaries, and, d) low insurance cover as the amount is below production cost.
During the open forum, House Members present confirmed the findings of Dr. Reyes as they personally experienced the poor performance of the program at the grassroots level. Cong. Isagani Amatong observed that Filipino farmers have lesser government support compared to their counterpart in other ASEAN countries. Cong. Peter Unabia, meanwhile, was concerned that PCIC is more profit-oriented rather than service-oriented. Cong. Wilfredo Caminero likewise made a query on the premiums received by the PCIC vis-à-vis indemnity payout to farmers as he noticed that indemnity payments were at times inadequate to cover damages.
Apart from the findings of Dr. Reyes, other issues raised include: a) slow processing of application for indemnity and unclear amount of payout, b) non-coverage for coconut farmers and fisherfolks, c) limited list of farmers enrolled in the program, and d) lack of information, education and communications (IEC) activities in promoting the program.
Exec. Dir. Romeo “Ka Omie” Royandoyan of Centro Saka Inc. suggested to the PCIC to revisit the Comprehensive Agrarian Reform Program Extension with Reforms provision on crop insurance. Ms. Hazel Tanchuling of Rice Watch and Action Network suggested integration of weather-based insurance scheme to PCIC’s insurance program. Noting that majority of agricultural farmers are in chronic and transient poverty, Dr. Roehl Briones of PIDS recommended an expanded insurance coverage and a review on the possibility of providing compulsory subsidized agricultural insurance to all farmers.
In response to some of the issues, PCIC Chairman Dioscoro Granada explained that they are already providing insurance for coconut farmers but still with limited coverage. In terms of expediting insurance application and claims, online transactions are already available to speed up the process. PCIC also promised to strengthen its coordination with the municipal agricultural officers for better information dissemination. On the issue of giving free insurance coverage to poor farmers, Senior Vice President Norman Cajucom explained that PCIC is currently prioritizing its delivery because of limited funds. He then appealed for the immediate passage of the bill strengthening the agency by increasing its capitalization and expanding its capacity as similar measures had already been passed in the previous Congress.
Before ending the forum, Dr. Reyes concluded by raising three major points to consider on how to effectively implement the insurance program. First is the question of who will provide the insurance more efficiently. Is it the private companies or the PCIC as reinsurer? Second, on the option of providing free crop insurance versus paid insurance, Dr. Reyes recommended that big farmers should pay while the most marginalized should be considered in the free insurance. Third, she emphasized the need for PCIC to explore and expand its coverage to more diverse agricultural products.
In his closing remarks, Executive Director Manuel Aquino provided key recommendations in the implementation of the insurance program. He argued that PCIC as an institution should be strengthened in terms of capitalization and manpower to effectively deliver its mandate. He also discussed the sustainability of the program, and recommended that the government should provide more subsidy to support it. He also stressed the importance of including fisherfolks in the insurance program.
P R O G R A M M E
1:00 -1:30 Registration
1:30 - 1:40 National Anthem/Invocation
1:40 - 1:50 Opening Remarks:
DR. GILBERTO M. LLANTO
President, Philippine Institute for Development Studies
1:50 - 2:30 MAIN PRESENTATION:
DR. CELIA M. REYES
Senior Research Fellow, Philippine Institute for Development Studies
2:30 - 3:30 DISCUSSANTS / OPEN FORUM
3:45 - 4:00 Closing Remarks:
DR. ROMULO E.M. MIRAL, JR.
Director-General, Congressional Policy Budget and Research Department