New insurance to protect farmers from yield shortfall

MANILA -The International Rice Research Institute (IRRI), the Philippine Rice Research Institute and the Philippine Crop Insurance Corp. (PCIC) joined forces to make crop insurance products available to more farmers nationwide.

The three agencies signed an accord on Thursday to design and test an area-based yield (ARBY) index insurance for rice to improve rice farmers’ resilience to climatic risks. This is expected to benefit about 2.4 million rice farmers nationwide.

“ARBY is a type of crop insurance that provides coverage based on historical average yield of a specific geographic area, rather than individual farmer’s yields, to determine payouts in the event of crop losses,” IRRI said in a statement.

In a press briefing on Thursday, PCIC vice president for Risk Management Office Sem Cordial said limited information about the insurance product was one of the challenges the agency was facing in insuring more farmers.

“I think there’s still a limited number of farmers that have been reached by information to help them understand the importance of agricultural insurance as well as the benefits of agricultural insurance,” Cordial said.

The PCIC managed to insure 2.4 million farmers and fishers in 2022, lower than the 3.4 million recorded a year ago, based on its annual report.

“[We] could actually expand insurance coverage because unlike the indemnity which is more individual, this one (ARBY) we can cover more under one geographical area with the same historical yield,” said Manuel Cortina, department manager of PCIC’s business development and marketing department. INQ