Jane Dotson
Agricultural insurance in the Philippines is supervised by the Philippine Crop Insurance Corporation (PCIC), a government-owned and controlled corporation under the Department of Agriculture. The PCIC was created through a presidential decree passed into law in 1978, with the main purpose of providing insurance protection to farmers against losses from natural disasters, plant diseases, and pest infestations. The PCIC offers seven insurance products and five insurance programs, including coverage for rice, corn, and high-value commercial crops. In recent years, the PCIC has been working to improve its services, and in 2022, it signed an agreement with CARD Pioneer to launch the country's first public-private partnership on crop insurance, targeting farmers of high-value crops. While agricultural insurance in the Philippines is heavily subsidized, only about one-third of farmers are insured, and there is a need for better targeting of these subsidies to support those most in need.
| Characteristics | Values |
|---|---|
| Who provides crop insurance? | The Philippine Crop Insurance Corporation (PCIC) |
| Who does it cover? | Farmers of high-value crops such as coconut, coffee, cacao, banana, sugarcane, pineapple, and tobacco |
| What does it cover? | Losses from natural disasters, plant diseases, and pest infestations |
| How much does it cost? | Standard premium rates apply, with the amount of cover at PhP 10,000/ha |
| How to apply? | Contact the PCIC or attend a farmer orientation event |
| Where to find more information? | PCIC website and regional offices |
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What You'll Learn
Understand the types of crops covered by insurance
The Philippine Crop Insurance Corporation (PCIC) is the country's dominant agricultural insurer, providing coverage for losses due to natural disasters, plant diseases, and pest infestations. The PCIC offers insurance for a variety of crops, including:
- Rice: The agricultural insurance for rice was first offered in 1981 and covers the cost of production inputs, including labour.
- Corn: Coverage for corn was introduced in 1982, similar to rice insurance, it also covers the cost of production inputs and labour.
- High-value commercial crops (HVCC): HVCC insurance began in 1991 for tobacco and was expanded in 1993 to include other crops. The premium rate for HVCC is market-rated and borne solely by the farmer, ranging from 2% to 7% depending on various factors such as agro-climatic conditions and soil type. Some of the crops covered under HVCC include abaca, ampalaya, asparagus, banana, cabbage, carrot, cassava, coconut, coffee, cotton, garlic, ginger, mango, mung bean, onion, papaya, peanut, pineapple, sugarcane, sweet potato, tobacco, tomato, watermelon, and white potato.
- Livestock: The livestock insurance program covers cattle, carabao, horses, swine, goats, poultry, and game fowls. It includes non-commercial and commercial mortality insurance, special cover for livestock dispersal, and insurance for game fowls and animals such as fighting cocks and racehorses.
It is important to note that the PCIC has faced challenges in effectively managing risks and claims, and there are efforts to improve agricultural insurance provision in the Philippines through partnerships and reforms.
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Find out if you are eligible for insurance
Agricultural insurance in the Philippines is one of the most heavily subsidised programs globally, with the government allocating a substantial and growing budget for premium subsidies to protect farmers from unexpected events. However, only about one-third of the estimated 10.9 million farm owners in the Philippines are covered by crop insurance. This is partly due to a lack of awareness, as a majority of farmers interviewed in a study by the Philippine Institute for Development Studies were unaware of crop insurance.
The Philippine Crop Insurance Corporation (PCIC) is a government-owned and controlled corporation under the Department of Agriculture. It was established in 1978 and offers crop insurance to safeguard farmers from losses caused by natural disasters, plant diseases, and pest infestations. The PCIC provides insurance coverage for a wide range of crops, including rice, corn, high-value commercial crops, and even livestock. It also offers insurance for farm equipment and life insurance for farmers.
To be eligible for insurance from the PCIC, farmers must be registered with the Department of Agriculture through the Registry System for Basic Sectors in Agriculture (RSBSA). This registration is vital, as only those listed in the RSBSA are eligible for government benefits such as free seeds, fertiliser, farming tools, financial assistance, livestock, and insurance. Farmers can register and apply for crop insurance by visiting their nearest PCIC office, LGU, or accredited lending institution.
The PCIC offers subsidised coverage, with the government bearing a significant portion of the premium cost. The premium rates depend on the evaluation of the type of crop and other factors such as agro-climatic conditions and terrain. Farmers can specify their crops and select the appropriate insurance package, with the coverage varying depending on the type of crop and the desired level of protection.
In addition to crop insurance, the Philippines also offers an accident and dismemberment security scheme for agricultural producers, fisherfolk, and other stakeholders. This insurance covers death or dismemberment due to accidents and is available as individual and group plans for ages 15 to 70 and family plans for ages 12 to 70.
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Learn about the different insurance products
The Philippine Crop Insurance Corporation (PCIC) offers crop insurance to protect farmers from losses caused by natural disasters, such as typhoons, floods, pests, and diseases. It also covers farm equipment like tractors and fishing boats and provides life insurance for farmers. PCIC has been working to improve its services, but it faces operational challenges, including paper-based systems and inadequate risk management tools.
In addition to PCIC, CARD Pioneer offers insurance coverage for rice and corn under its Binhi (Seed) Crop Insurance Program. CARD Pioneer targets farmers of high-value crops, including coconut, coffee, cacao, banana, sugarcane, and pineapple, filling a gap in the market where PCIC has had limited coverage.
There is a range of insurance products available to farmers in the Philippines, including:
- Insurance for rice, corn, and high-value commercial crops, which covers the cost of production inputs, labour, and optional additional amounts.
- Insurance for agricultural transport vehicles, such as trucks and pickups, with premiums based on industry practices and a maximum coverage period of one year.
- An accident and dismemberment security scheme for agricultural producers, fisherfolk, and other stakeholders, covering death or loss of body parts due to accidents. This insurance is available as individual, group, and family plans for specific age groups.
- Insurance for agrarian reform beneficiaries participating in credit programs.
- Insurance for subsistence farmers and fisherfolk directly affected by typhoons, such as Yolanda or Haiyan.
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Know the process of applying for insurance
The Philippine Crop Insurance Corporation (PCIC) is the dominant agricultural insurer in the Philippines. It is a government-owned and controlled corporation under the Department of Agriculture. The PCIC provides subsidised coverage to mostly small farmers for losses due to natural calamities, plant diseases, and pests.
The PCIC has been effectively the sole provider of agricultural insurance in the Philippines for the past 40 years. Many of its operations are still paper-based, and it faces challenges in delivering value for money to farmers.
In 2022, the PCIC and private insurer CARD Pioneer Microinsurance Inc. signed an agreement to launch the country's first public-private partnership on crop insurance. This partnership aims to offer insurance coverage to selected high-value crops, including coconut, coffee, cacao, banana, sugarcane, and pineapple.
To apply for crop insurance in the Philippines, farmers can contact the PCIC directly or attend farmer orientations and mass application events held by the PCIC in different regions. During these events, PCIC staff provide information on their insurance products and accept applications for insurance.
It is important to note that, as of 2022, only about one-third of the estimated 10.9 million farm owners in the Philippines are covered by crop insurance. This is due to the high cost of existing insurance products and the lack of suitable products for smallholder farmers, who own less than 1 hectare of land.
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Discover the benefits of crop insurance
Crop insurance is an essential tool for Filipino farmers to manage risks and protect their livelihoods. The Philippines experiences an average of 20 typhoons annually, with 8-9 making landfall, and agriculture is the sector that suffers the most significant losses following these natural disasters. Climate change further exacerbates the risks faced by farmers, making crop insurance a crucial form of protection.
Crop insurance provides financial relief to farmers during typhoons, droughts, and other natural calamities that can ruin crops and drive up prices in the country. It covers risks such as natural disasters, including typhoons, floods, droughts, earthquakes, volcanic eruptions, plant diseases, pest infestations, and accidental fires. For example, following Super Typhoon Goni, which caused significant crop and livestock losses in the Bicol region, farmers would have benefited from crop insurance as a financial safety net to help them recover.
In addition to protecting against natural disasters, crop insurance can also facilitate credit access, especially in formal lending institutions like the Land Bank of the Philippines. Lending institutions often require agricultural insurance from farmer borrowers, and having insurance can help farmers access loans with more favourable terms. This is particularly important as farmers may struggle to access savings accounts or formal credit, and without adequate insurance, they may be forced to rely on loan sharks with very high interest rates.
Crop insurance can also empower farmers to adopt new technologies and innovations in the market. It reduces their risks, allowing them to experiment with new techniques to increase and improve their farm yield. This can lead to improved productivity and potentially higher incomes for farmers.
The Philippine government recognises the importance of crop insurance and provides substantial premium subsidies to safeguard farmers. The government's Philippine Crop Insurance Corporation (PCIC), in partnership with private insurers, offers coverage for high-value crops such as coconut, coffee, cacao, banana, sugarcane, and pineapple. Reforms are also underway to improve agricultural insurance provision, ensuring better protection for farmers.
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Frequently asked questions
Crop insurance is a type of insurance that provides financial protection to farmers against losses arising from natural disasters, plant diseases, and pest infestations.
You can apply for crop insurance through the Philippine Crop Insurance Corporation (PCIC), which is the country's dominant agricultural insurer. The PCIC offers insurance coverage to small farmers for losses due to natural calamities, plant diseases, and pests.
The PCIC offers insurance coverage for high-value crops, including coconut, coffee, cacao, banana, sugarcane, and pineapple, as well as rice, corn, and tobacco.
The cost of crop insurance in the Philippines will vary depending on the type of crop and the level of coverage required. For example, the Rice Crop Insurance for the DA Weather Adverse Areas (WARA) Insurance Program has a standard premium rate of PhP 10,000/ha.
Yes, in addition to the PCIC, there are private insurers that offer crop insurance in the Philippines, such as CARD Pioneer Microinsurance Inc.
