The Philippine Crop Insurance Corporation’s (PCIC) contributions to making the small Filipino farmers and fishers more resilient were highlighted recently by its president, Atty. Jovy C. Bernabe, in a presentation at the Asia Low Emission Development Strategies Forum (Asia LEDS Forum) held in Manila early October.
Atty. Bernabe shared PCIC’s experience in designing and operating creative financing and insurance program to increase resilience of farmers in half-day training session entitled “Climate Finance: Basics and Examples, Agriculture, Payment for Ecosystems Services, National Strategies.”
In his speech, Atty. Bernabe highlighted the evolution of the PCIC’s insurance lines from the traditional covering rice and corn, initially, to other agricultural crops, including fisheries, to assets dedicated to agriculture and fisheries development, to life and limb of farmers, and to its exciting foray lately in index-based insurance.
The organizer’s website says the Asia LEDS Forum “serves as the premier annual gathering of policymakers, donors, practitioners, and other experts involved in enabling low-emission, climate-resilient development in Asia.”
“The inception of new products, other than those that catered to rice and corn, was initially accompanied by doubts about their viability. Over the last five years however, subscription to our various insurance products has been on the uptrend,” Atty. Bernabe said.
Atty. Bernabe said that the establishment of the PCIC 32 years ago recognized the country’s vulnerability to natural meteorological and geological disasters, like typhoons, floods and drought, volcanic eruption and earthquake. It was intended to soften the impact of these natural calamities upon the lives and livelihood of agricultural producers and their lenders, and by extension on the country’s food security.
With its incipient work, “the PCIC made sure that the insured marginal farmers, and their investment partners, do not totally lose their investments if these events come to pass, and will have the capital to invest in farming once again. This addressed as well disruption in stable food production and supply,” Atty. Bernabe added.
In the face of increasing climate change, when agricultural crops, animals and assets have become more vulnerable to climate change, the PCIC has embarked on piloting index-based insurance.
“We embarked on pilot studies of index-based insurance, particularly the weather index-based insurance or WIBI and the area-based yield-indexed insurance or ARBY, about two years ago. As you know, in these insurance schemes, claims are made and indemnities paid based on agreed weather indices or yield threshold, and not on actual damage suffered by the producers. If such indices fall below a defined threshold, indemnity is immediately paid. Indices are monitored by satellite technology. Therefore, these schemes do not require field assessment of damage. They have therefore the potential to respond more quickly to farmers’ needs,” Atty. Bernabe said.
“We are now looking into the results of the various rounds of pilot testing that these index-based insurance have undergone, and we assure everyone of immediate PCIC board action on it,” he added.