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LEGAL BASIS

LEGAL BASIS. ♦ Presidential Decree No. 1467 June 11, 1978 ♦ Presidential Decree No. 1733 October 21, 1980 ♦ Republic Act No. 8175 December 29, 1985. IMPORTANCE OF CROP INSURANCE.

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LEGAL BASIS

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  1. LEGAL BASIS ♦ Presidential Decree No. 1467 June 11, 1978 ♦ Presidential Decree No. 1733 October 21, 1980 ♦ Republic Act No. 8175 December 29, 1985

  2. IMPORTANCE OF CROP INSURANCE • Provides insurance protection to farmers’ investments and provides the farmers with a risk management tool which has become more relevant now in view of the climate change phenomenon • Serves as substitute collateral to secure the loans extended by lending institutions such as the Land Bank, rural banks, LGUs and cooperatives in favor of farmers who have no properties that can serve as collateral

  3. Provides insurance protection to farmers’ investments and provides the farmers with a risk management tool which has become more relevant now in view of the climate change phenomenon • In 2009, PCIC covered P5.3 billion worth of agricultural crops, livestock and properties • As a result of typhoons Ondoy, Pepeng and Santi and other perils, PCIC paid P210 million to 26,000 insured farmers • Without crop insurance, the farmers affected would not have recovered any amount to restart their farming business • Recently, we paid P70 million to the farmer victims of El Niño

  4. Serves as substitute collateral to secure the loans extended by lending institutions such as the Land Bank, rural banks, LGUs and cooperatives, thus encouraging the flow of credit to the farming sector. • In 2009, the amount of loans provided to marginalized farmers and secured by crop insurance was P3 billion • Without crop insurance, the P3 billion would not have been provided to the marginalized farmers

  5. INSURANCE PROGRAMS 1. Rice Crop Insurance 2. Corn Crop Insurance 3. High-Value Commercial Crop Insurance 4. Non-Crop Agricultural Asset Insurance 5. Livestock Insurance 6. Term Insurance • Agricultural Producers Protection Plan • Loan Repayment Protection Plan • Accident and Dismemberment Security Scheme

  6. The amount of insurance coverage that a farmer may obtain varies depending on the crop involved

  7. Rice and Corn Insurance • For rice and corn insurance, the amount of cover ranges between P10,000 to P52,000 per hectare • The premium cost for rice insurance is 9.48%. For corn insurance, the premium cost is 16.64%. • The government pays for 60% of this premium cost. The remaining 40% is paid for by the farmer and lending institution.

  8. High-Value Commercial Crop Insurance ► Eligible for coverage – all high-value and commercially grown crops other than rice and corn, such as abaca, ampalaya, asparagus, banana, cabbage, carrot, cassava, coconut, coffee, commercial trees, cotton, garlic, ginger, mango, mongo, onion, papaya, peanut, pineapple, sugarcane, sweet potato, tobacco, tomato, water melon, white potato, etc.

  9. (continuation High-Value Commercial Crop Insurance) ► Amount of Cover - Cost of production inputs (CPI) as agreed upon by PCIC and the assured, but not to exceed 120% of the CPI ► Premium Rate - Market-rated and solely borne by the insured. Commonly the premium rate is within 2% to 7% of TSI

  10. Livestock Insurance An insurance protection for livestock raisers against loss of carabao, cattle, horse, swine and goat, sheep, poultry and game fowls and animals due to accidental death or diseases. ►Premium Rate – On the range of 2% to 12%, depending on the livestock insured

  11. Non-Crop AgriculturalAsset Insurance An insurance protection extended to farmers against loss of their non-crop agricultural assets like warehouses, rice mills, irrigation facilities and other farm equipment due to perils such as fire and lightning, theft and earthquake ► Premium Rate On the range of 0.30% to 1.50% depending on the risk covered

  12. During the past two years, PCIC has greatly increased the number of farmers and hectares insured. • Before, PCIC on the average insures around 50,000 farmers every year with rice and corn insurance. • For 2009, we insured about 100,000 farmers. • This was made possible because of the increase in the budget given by Congress in 2009 to PCIC from the usual P113million to P183million. The budget was used to subsidize the premium cost of rice and corn farmers.

  13. PCIC provided insurance protection to more farmers in 2009 in other insurance products • In Livestock Insurance • covered 10,619 heads amounting to P76.290 million • In HVCC Insurance • covered 4,466 hectares of HVCC amounting to P98.928 million. • In Non-Crop Agricultural Asset Insurance • issued 707 insurance policies for agri-assets amounting to P916.517 million.

  14. PLANS • Enhance existing agricultural insurance packages and • continue to shorten claims processing response time • Introduction of aquaculture/fisheries Insurance • Introduction of Weather Index – Based Crop Insurance. • Strengthen/Establish linkages with lending institutions, • cooperatives, farmers’ organizations, etc.

  15. Thank you

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