PCIC has signed a memorandum of agreement (MOA) with the Philippine Rice Research Institute (PhilRice) and the International Rice Research Institute (IRRI) for the development of an innovative rice insurance product that would add to the current array of insurance products available to farmers and enable faster payment for farmer losses.
The collaboration aims to develop an Area-Based Yield Index Insurance (ARBY) product. ARBY is an innovative agri-risk transfer mechanism where compensation is not based on individual farm losses, but is determined by the average harvested yield of a designated area, such as a barangay or municipality. This threshold or index is generally set as a fraction of the area’s historical average yield, typically set at 80%. If the average yield for a crop season dips below 80%, a payout is automatically made to the insured farmers.
The product’s feature speeds up decision-making over insurance payment and addresses the usual concern for delay in paying compensation for crop losses among the insured farmers.
This new partnership was formalized in a signing ceremony participated in by IRRI, interim Director General Dr. Ajay Kohli, PhilRice Executive Director Dr. John De Leon, PCIC President JB Jovy Bernabe recently held at the Philippine International Convention Center. The activity formed a sidelight at the Sixth International Rice Congress 2023, a gathering of rice industry innovators organized by the IRRI every four years.
During the occasion, Atty. Bernabe emphasized the significant strides PCIC has taken over the years, asserting, “With nearly four million farmers and fisherfolk insured annually, this growth is largely due to the unwavering support from the government and our main stakeholders, the country’s farmers and fisherfolk.” Addressing the growing concern over climate change’s impact on agriculture, he underscored the need to adapt and innovate. “Our initiative towards the development of ARBY for rice is a proactive response to our present requirements,” Bernabe elaborated.
A cornerstone in the feasibility of this venture is the Philippine Rice Information System (PRISM), the first satellite-based rice monitoring mechanism in Southeast Asia developed by scientists at IRRI in partnership with the Department of Agriculture. Dr. De Leon highlighted the transformative power of technology in agriculture. “The potential of remote sensing technology, specifically the Philippine Rice Information System (PRISM), in crop insurance is vast,” he said. Dr. De Leon celebrated the resilience and optimism of farmers, noting, “Farmers’ enduring spirit has found a new ally in technology. The collaboration with PCIC and IRRI will let us apply invaluable data to the critical realm of agricultural insurance, marking an exciting evolution in the sector.”
Thanking PCIC and PhilRice, Dr. Kohli expressed his enthusiasm toward harnessing technological advances for the well-being of the farming community.
The partnership will kick-start its initiatives by simulating the ARBY products in three significant rice-producing provinces in the country: Isabela, Camarines Sur, and Capiz. This pioneering phase aims to engage an initial batch of 3,000 rice farmers in simulating application of the proposed new insurance product.
Also present during the signing were Mr. Segundo Guerero, PCIC Acting Senior Vice President; Mr. Sem Cordial, Acting Vice President for Risk Management Office; Mr. Israel Dela Cruz, Department Manager, Planning and Management Information Office; and Mr. Manuel Cortina, Department Manager, Business Development and Marketing Department.