THE House of Representatives on Wednesday overwhelmingly approved on third and final reading a measure that seeks to expand the services of the Philippine Crop Insurance Corporation (PCIC) and at the same time encourage private sector participation in agricultural insurance.

Passed on the strength of 268 votes during nominal voting was House Bill (HB) No. 7387, which seeks to further revise Presidential Decree (PD) No. 1467, creating the Philippine Crop Insurance Corporation, as amended.

The measure cited the policy of the State to develop and support an adequate agricultural insurance program as a mechanism for managing the risks inherent in agriculture and stabilizing the financial fluctuations suffered by agricultural producers in case of loss on all agricultural commodities, whether crops or livestock.

The program also includes agricultural facilities and related infrastructures, with the end in view of encouraging lending institutions to extend credit to the agricultural sector.

“It shall also be the policy of the State to promote the modernization of the agricultural sector by mitigating the risks inherent to the industry and which increase the barriers to increased market participation in businesses related to agriculture,” it said.

“Towards this end, the State shall encourage active private sector participation in extending agricultural insurance to members of the agricultural sector by allowing the Philippine Crop Insurance Corporation to undertake reinsurance agreements with private sector agricultural insurers and to extend its insurance services to livestock, aquaculture and fishery, agro fishery, and forest plantation insurance,” it further said.

As per HB No.7387, Section 1 of PD No. 1467, as amended, will be further amended to read as follows: “SEC. 1. Creation of the Philippine Crop Insurance Corporation. – There is hereby created a body corporate to be known as the “Philippine Crop Insurance Corporation” (PCIC and herein called the Corporation) which shall be attached to the Department of Agriculture for budgetary purposes.”

Under the measure, the PCIC shall insure farmers against losses arising from natural calamities, plant diseases, and pest infestations.

Such insurance covers all agricultural commodities, including palay crops and others, without prejudice to the inclusion of other non-crop agricultural assets such as livestock, aquaculture and fishery, agroforestry, forest plantations, machineries, equipment, transport facilities, and other related infrastructures, as the Board of Directors of PCIC may determine.

Likewise, the insurance shall cover, in every case, the cost of production inputs, the value of the farmer’s own labor and those of the members of his household, including the value of the labor of hired workers, and a portion of the expected yield as the Board of Directors, in its discretion, decide to insure.

However, such insurance protection excludes losses arising from avoidable risks emanating from or due to the negligence, malfeasance, or fraud committed by the insured or any member of his immediate farm household or employee.

In addition, the Corporation shall also offer reinsurance services for entities willing to offer agricultural insurance.

Under the bill, the powers of the PCIC shall be vested in and exercised by its board of directors, composed of eight members with the Secretary of Finance as ex-officio chairperson and the President of the PCIC as ex-officio vice chairperson.

Other members of the Board include the following: the President of the Landbank; Secretary of the Department of Agriculture (DA); a representative from the private insurance industry to be nominated by the Secretary of Finance; and three representatives from the subsistence farmers’ sector, preferably representing agrarian reform beneficiaries, cooperatives, or associations coming from Luzon, Visayas, and Mindanao, who shall be selected and nominated by the different farmers’ organizations or cooperatives.

The bill provides that any insured farmer who has not filed any claim during the immediately preceding three crop seasons, or any insured fishpond or fish cage operator who has not filed any claim during the immediately preceding three harvest seasons, shall be entitled to a no-claim benefit of at least 10 percent of his premium share paid for said crop seasons to be deposited in a trust fund and to be managed by the corporation.

Such a trust fund may be used to finance premium rebate or premium credit applicable to the immediately following crop seasons as determined by the board of directors.

To support and promote its operations, PCIC may call upon government and private entities engaged in the supervised credit program to farmers and fisherfolks to act as cooperating agencies. As such, these entities would be required to design their policies and rules to attune and synchronize them with the objectives of the corporation.