Government Insurance System That Protects Crops and Livestocks from Possible Losses

November 15th, 2009 by BizMind | Filed under Insurance System.

If you are Filipino agribusinessmen/farmers, you need to ensure your crops and livestock to protect agricultural production in cases of calamities and other sudden unpleasant events. Placing crops under insurance would, in turn, protect you from possible losses caused by calamities like typhoons and fire.

Here in the Philippines, you can ensure your crops and livestocks in the Philippine Crop Insurance Corporation (PCIC), a socialized agency of government, which receives around P183 million yearly from Malacañang and a P2 billion capitalization that will cover all the claims of their clients. The corporation’s mandate is to provide insurance protection to the country’s agricultural producers against loss of crops and non-crop agricultural assets on account of natural calamities; provide guarantee cover for production loans extended by lending institutions to agricultural producers for crops not yet covered by insurance.

Insurance programs offered by PCIC vary from rice and corn crops insurance, high value commercial crop insurance, livestock insurance, non-crop agricultural asset insurance and term insurance power packages.

The rice and corn crop insurance covers losses in rice and corn crops due to natural calamities, as well as plant pests and diseases from direct planting to the time of harvest.
The same coverage applies to high value crops such as vegetables, fruits, and the likes.
Meanwhile, livestock insurance ensures carabao, cattle, horse, sheep, poultry and game fowls and other animals that would meet accidental death or be inflicted with diseases.
Farmers can also ensure their warehouses, rice mills, irrigation facilities and other farm equipment through the non-crop agricultural asset insurance, which applies when these facilities and equipment are victimized by theft or struck by fire, lightning, and earthquake.

On the other hand, the term insurance covers death of the insured due to accident, natural causes, murder or assault. It guarantees the payment of the face value or the amount of the approved agricultural loan upon the death or total permanent disability of the insured borrower.

Under the PCIC insurance scheme, a farmer who borrows for crop production pays an insurance premium which is 5.9 percent of the total amount borrowed. Then, PCIC pays a subsidy equivalent to seven percent of the individual borrower’s total production loan. The crop insurance system covers entire production loans that the farmers borrowed from cooperatives and rural and commercial banks. The good thing of this crop insurance system is that when calamity strikes, farmer-payees can prepare for their planting seasons anew without worrying about an outstanding loan.

In this insurance system, though, even affluent farmers who do not need production loans can avail themselves of the government-subsidized insurance scheme but they rarely take out such loans.

If you are interested to ensure your crops and livestocks, you can apply at any accredited agricultural insurance system of PCIC, including municipal and provincial agricultural offices where PCIC has assigned underwriters to process applications and requests.