The House committee on appropriations chaired by Rep. Karlo Alexei Nograles (1st District, Davao City) approved a substitute bill seeking to strengthen the Philippine Crop Insurance Corporation (PCIC) and improve its capability to provide farmers with additional government support to raise agricultural production.
In addition, the bill enhances the capabilities of banks and financial institutions to extend loans to farmers.
The appropriations committee passed the substitute bill after approving its appropriations provision under Subsection 6.3 under Section 6 titled “Premium Subsidy”, which provides that unnappropriated and/or unreleased government premium subsidy for policies written for the period from May 1, 1981 up to December 21, 2011 shall be programmed for payment by the government.
The yearly sums for the specified years will be included in the budgetary appropriations for submission to Congress starting the fiscal year following approval of the bill, in addition to the premium subsidy requirement of the year involved.
Approval of the substitute bill was endorsed by the committee on government enterprises and privatization chaired by Rep. Jesus Nonato Sacdalan (1st District, North Cotabato). It substituted House Bills 40, 436, 2445, 3534, 3560,4107, and 4578 authored by Reps. Arthur Yap, Anthony Bravo Ph.D., Rosanna Vergara, Orestes Salon, and Christopher de Venecia, respectively.
Among others, the bill amends the entire Section 2 of RA 8175, to institute as a policy of the State to ensure food security, intensify food production, promote agricultural credit and broaden the coverage of mandatory crop insurance c, especially amidst the recurrence of disasters and calamities, natural or otherwise, including floods, typhoons, heavy rains, and drought that destroy crops, especially palay and other grains and crops necessary for food security.
Pursuant to this policy, the bill directs the State to assist banks and financial institutions to enhance their capabilities to extend loans to farmers.
Under the bill, PCIC shall provide insurance to qualified farmers and fisherfolk against losses arising from natural calamities, fortuitous events, plant and fish diseases and pest infestations. Coverage of such insurance includes palay and corn crops; high-value commercial crops; livestock, aquaculture and fishery products; agroforestry crops, and forest plantations; non-crop agricultural assets such as machineries, equipment, transport facilities and other related infrastructures.
The PCIC may also provide and life and accident term insurance coverage for farmers and fisherfolk, as the PCIC Board of Directors may determine.
Such crop insurance shall cover, in every case, the cost of production inputs, the value of the farmers’ or fisherfolk’s own labor and those of the members of his household, including the value of the labor of hired workers, and a portion of the projected value of the crops.
Properties and facilities, which are owned or used by government agencies involved in agri-fishery-forestry projects or activities and government-financed agri-fishery-forestry projects, shall also be covered under the PCIC insurance.
Likewise, the PCIC is authorized to provide reinsurance coverage to agri-fishery-forestry properties and facilities underwritten by private and government insurance companies.
The bill makes it compulsory the participation in crop insurance of all farmers of palay and other crops essential for food security, as determined by the Department of Agriculture.
For other crops, participation shall be compulsory upon all farmers obtaining production loans under the supervised credit program, and optional on the part of self-finance farmers provided they agree to place themselves under the supervision of agricultural production technicians.
The rate of premium, as well as the allocated sharing thereof of farmers, fisherfolk, lending institutions, the government and other parties, shall be determined by the PCIC Board of Directors.
Under the bill the government shall provide premium subsidy but limited to subsistence farmers and fisherfolk. Subsistence farmers are those cultivating not more seven hectares of farmlands and fisherfolk cultivating not more than five hectares of fishpond, seaweed, oyster, or mussel farm by themselves or with the help of the labor of members of their households or hired labor.
The premium rate and sharing for subsistence farmers shall be determined by the PCIC Board of Directors and shall be reasonably affordable.
As for the amount of indemnity, the bill leaves it to the PCIC Board of Directors to determine, taking into account the value of the potential harvest for crops at the ripening stage of growth; actual cost of production inputs already applied at the time of loss per farm plan and budget, subject to limits stipulated in the policy contract; pro-rated cost of the harvested crops; the salvage value, if any; and the percentage of yield loss.