The chairman of the House of Representatives’ Committee on Ways and Means has proposed the expansion of the country’s crop and livestock insurance system.
Albay Rep. Joey Sarte Salceda filed the bill as a means to protect farmers from losses due to the African Swine Fever and crop infestations such as the “tungro” disease, a viral infection caused by grasshoppers currently affecting rice farms in Albay.
“Our crop insurance system currently covers mostly the mandatory crop insurance programs. We do not really have a significant private sector crop insurance system. Because of climate change, however, we can expect more infestations in the future. While bioscience in agriculture has to evolve, we definitely also have to make sure the financial sector support programs are present,” Salceda said.
The proposed Expanded Agricultural Insurance Act aims to widen agricultural insurance coverage by allowing the Philippine Crop Insurance Corporation or PCIC to offer reinsurance programs to private sector insurers.
It also allows the government-run corporation to expand its portfolio in livestock insurance.
“This bill follows a recommendation from a 2019 discussion paper by the Philippine Institute of Development Studies which found that agricultural insurance penetration rates in the Philippines remain in need of improvement, with programs focusing on mandatory insurance coverage,” Salceda said.
As of 2018, only 13.33 percent of the total agricultural land cultivated in the Philippines was insured with the PCIC.
“I am adopting that paper’s recommendations with this bill. To improve insurance coverage, the PIDS paper recommended that the PCIC’s charter be expanded to make it a reinsurer for other entities willing to offer agricultural insurance. Such entities may include cooperatives, farmers’ associations, and other private sector participants, such as private financial institutions.”
Reinsurance is secondary insurance for primary insurance companies. It allows primary insurers to hedge some of the risks they incur against another insurance product.
“By mitigating some of the risks to primary agricultural insurance, the PCIC will be able to lower the costs of private agricultural insurance.”
Salceda said he already secured the support of the Department of Agriculture (DA) in assisting the farmers affected by “tungro” in Albay.
“We have to protect our farmers and our food. No other national security measure is more important in a country with such a large population to feed as ours,” he added.