Crop insurance saves farmers

CAMILING, Tarlac, Philippines – Unlike their forebears, farmers in this agricultural town have recognized the importance of crop insurance to their livelihood. And it’s a development that matches the increasing recognition for crop insurance as a key ingredient of agriculture and fisheries modernization among policy makers in government.

“If there were no crop insurance, our cooperative would have collapsed a long time ago,” said Carlos Abrazado, chairman of Pindangan 2nd Primary Multi-Purpose Cooperative (P2MPCI) of this town. Abrazado, called Kapitan Caloy by many since he had been the chairman or “Kapitan” of their barangay for quite sometime, said the indemnity payment from the crop insurance program of their farmer-members provided them funds to sustain their operation.

The area that Kapitan Kaloy and members of his cooperative farm is flood-prone. Specially during the typhoon season, their farms get inundated. He recalled that their crops managed to survive if the flood was not so deep or if it happened when the plants had grown considerably tall already. But “our crops are totally lost when we had just transplanted them,” he said. 

Thus, when the indemnity payments came, the farmer-members were very thankful of the Philippine Crop Insurance Corp. (PCIC). With the sum, the farmers are able to replant again as soon as weather and soil condition permits. Thus, crop insurance ensures the least disruption in crop production, ensuring both food security and the incomes of the farmers.

Most of P2MPCI’s members are covered by PCIC. They regularly avail themselves of agricultural loans to finance their rice and corn production ventures. The premium for PCIC’s crop insurance coverage is partly subsidized by the government, and the premium payment of the farmers is automatically deducted from their loans.

When there was no crop insurance yet, the farmers would just patiently wait for the next planting season and would even resort to borrowing from usurers for the needed capital to replant. This made it doubly difficult for them to pay their loans considering that with the new loan, they incurred a second loan to settle out of a single harvest. This burden is exacerbated by the high interest rate they had to bear.

“When that happens, there is nothing you can do. And you won’t have anybody to help you pay your loans,” said Marlyn Valido who, at 49, is a single mother and a hands-on farmer.

She knows that she cannot get another loan from the cooperative unless she pays her previous one. She did not dare go to another cooperative or to a rural bank since she will not have enough to pay for the loans.

PCIC president Jovy Bernabe assured the farmers that the corporation will always respond immediately to their claims for indemnity to give them the opportunity to replant at the soonest time possible.

“Our claims and adjustment teams work closely with the farmer-clients upon receiving their notice of loss during calamities,” he said. PCIC is further improving its systems and procedures to shorten its response time to claims for indemnity payment and to assist farmers have funds for their production.

Bernabe explained that the main mandate of PCIC is to enable farmers produce the staple that the country needs.

In a growing recognition of the importance and positive impact of crop insurance to food production and agriculture and fisheries modernization, the Department of Agriculture (DA) has included crop insurance in the FIELDS Program as part of the “L” component, that is, loans to farmers, he added. FIELDS stands for fertilizer, irrigation, education and extension, loans, dryers and other postharvest facilities and seeds, the current thrusts of the DA’s efforts.