Crop Insurance: Security for Farmers and Agricultural Stakeholders in the Face of Seasonal Climate Variability
This paper provides a comprehensive review of the crop insurance program in the Philippines covering its history, operationalization, performance and challenges.
Crop insurance is a risk management tool designed to even out agricultural risks and address the consequences of natural disasters to make losses more bearable. In the Philippines, the Philippine Crop Insurance Corporation (PCIC) implements and manages the government program on agricultural insurance. Secondary data assessment and key informant interviews reveal that:
- PCIC has captured only a small segment of its target clientele due to logistical and marketing constraints;
- Constraints to operating the program include high overhead costs, larger investment fund requirement, and sustainability;
- Farmer dependence on informal credit has created a nonviable setting for a crop insurance program.
If the agricultural insurance program is to survive and become operationally sustainable, it will have to operate as an economically viable unit. With the absence of assured financial support from the government, efforts must be made to streamline operations and focus on marketing. Finally, PCIC must work to engage the small farmers and fisherfolk, especially those who are not availing loans from formal sources.
