2nd Topic Pcic-Msme

Crop Insurance is a risk mechanism deemed indispensable in the
country for two reasons:

1. The high incidence of typhoons, droughts and other calamities
as well as prevalence of pests and diseases
2. Majority of the farmers are small so that one bad harvest
generally renders them incapable of recovering their
investments.
Crop insurance is being promoted to maintain the

following concerns:
1.Stabilize farm income
2. Reduce the inefficiencies caused by agriculture risks
The primary objective of the crop insurance when it
was launched in 1980 was to free the farmers from
vicious cycle of “borrowing in order to plant;
planting in order to repay debts; and then
borrowing again to cover up their losses and debts.
The problem of perpetual indebtedness was
worsened by the ecological disadvantages- on the
average 20 tropical depression visit the country
every year, not to mention the disease and pest
infestations.
Climate change bring crop insurance into
awareness of many stakeholders in
agriculture – the owners of corporate
farm, investors, small farmers, lending
institutions, local government units and
governments officials.
Philippine Crop Insurance Corporation
(PCIC) is a government owned and
controlled corporation created on June
11, 1978 by PD 1467 as implementing
agency of the crop insurance program. It
is mandated to provide protection to
agricultural crops against losses due to
natural disasters, plant pests and
diseases.
1. RSBSA – with funding under GAA 2016 amounting to P1.6B, for
all insurance lines except the Credit & Life Term Insurance
2. WARA (Weather Adverse Rice Areas) – funded by DA, premium
entitlement per hectare is P1,000 maximum of 3.0 has.
per farmer
3. REGULAR - with premium subsidy for rice and corn insurance
while premium for other insurance lines are market-rated
4. LBP/DA Sikat – Saka – a financing program for individual
farmer, rice and corn
5. AGRARIAN PRODUCTIVITY CREDIT PROGRAM (APCP) - for ARBs
who availed production loan with Land Bank
For Rice and Corn Insurance, the premium is being
shared by the farmer, the lending institution and the
government. The premium rate is variable by region
and province depending on the loss experience from
1981 to 1997. About 55-60% of the total cost of
premium is shouldered by the national government.
The premium rate and sharing is approved by Office
of the President as recommended by DBM because
of the premium subsidy
The premium for other insurance lines of PCIC is
market-rated but affordable to small farmers.
The cost of premium depends on the risk to be
insured. The coverage is not multi-risk, it is
named perils – meaning the insured can choose
the risks or perils he want to be covered. This
makes the premium within the reach of farmers
and other clients.
Includes insurance for FISHING BOAT, three (3) gross tons
and below either non-motorized or motorized
Individual Fish Farmer/Fisherfolk/Grower
Duly licensed owners/operators of fishponds,
fish cages, fish pens and fisheries farms which
culture/produce selected fish species such as
milk fish, shrimps, groupers, snappers, tilapia,
mudcrabs and seaweeds, may qualify for
coverage.
The insurance shall cover the cost of production
inputs, the value of the fish farmer/fisherfolk/grower’s
own labor and those of the members of his household,
including the value of the labor hired worker per Farm
Plan and Budget.
The period of coverage shall be from
stocking up to harvest as indicated in the
FPB duly certified by an accredited
Technologist but not to exceed 120 days.
The premium shall be market-rated and shall be borne by the
insured. The premium shall be determined by PCIC, subject to the
following provisions:
1. The premium rate shall depend on the results of the pre-
coverage evaluation of the type, and other factors as agro-
climatic conditions and terrain, project management factors
and production and loss records.
2. The premium shall include risk premium plus loading for
administrative cost of 10%, surplus reserve of 10%.

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2nd Topic Pcic-Msme

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Crop Insurance is a risk mechanism deemed indispensable in the

country for two reasons:

Crop insurance is being promoted to maintain the

administrative cost of 10%, surplus reserve of 10%.

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