Seventeenth Congress
First Regular Session

HOUSE BILL NO._5761

Introduced by Representative Michelle M. Antonio

EXPLANATORY NOTE

This bill seeks to require farmers to secure compulsory crop insurance’ for
palay and other crops, amending for the purpose Presidential Decree No. 1467, as
amended.

The Philippine Crop Insurance Corporation (PCIC), a government owned
and controlled Corporation attached to the Department of Agriculture, was created
by virtue of Presidential Decree No. 1467 entitled “Creating the ‘Philippine Crop
Insurance Corporation’ Prescribing its Powers and Activities, Providing for lts
Capitalization and for the Required Government Premium Subsidy and. ‘for Other
Purposes.” The primordial purpose of the insurance was to provide protection to
farmers against losses arising from natural disasters, plant diseases and pest
infestations initially for palay crops and later to other crops. The decree was later
amended by Presidential Decree No. 1733 and Republic Act (RA) No. 8175
otherwise known as the “Revised Charter of the Philippine Crop Insurance
Corporation Act.”

Presently, crop insurance under RA No. 8175 remains to be mandatory only
upon all farmers obtaining production loans for palay under the supervised credit
program. It remains optional on the part of self-financed farmers who can secure
crop insurance provided they agree to place themselves under the supervision of
agricultural production technicians. Further, the law mandates that the insurance
shall cover the cost of production inputs, the value of the farmer’s own labor and
those of the members.of the farmer’s household, including the value of the labor of
hired workers, and a of at least twenty percent (20%) of the expected yield,
but excluding losses arising from “avoidable risks due to negligence, malfeasance
or fraud committed by the insured or any member of the insured’s immediate farm
household or employee or the failure of the insured to follow proven farm
practices”. Thus, only the financial institutions remain secure in case of losses
arising from natural disasters, plant diseases and pest infestations.


Under the proposed measure, securing insurance for palay and other crops
shall become compulsory upon all farmers. The proposed bill also seeks to
increase the insurance coverage on the portion of the expected yield so that all
expected farm output shall be fully insured up to fifty percent (50%) against
occurrence of natural or manmade disasters. Hence, the farmers will not suffer
financial setback after such circumstances.

In view of the foregoing, immediate Passage of this bill is earnestly sought.

Cee)
“cosa M. ANTONIO


COVaNUaWNE

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Seventeenth Congress
First Regular Session

HOUSE BILL NO. 5761

Introduced by Representative Michelle M. Antonio

AN ACT
REQUIRING FARMERS TO SECURE COMPULSORY CROP
INSURANCE FOR PALAY AND OTHER CROPS, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 1467, AS AMENDED,
OTHERWISE KNOWN AS THE “CHARTER OF THE PHILIPPINE CROP
INSURANCE CORPORATION”

Be it enacted by the Senate and House of Representatives of the Philippines in the
Congress assembled:

SECTION I. Section 4 of Presidential Decree No. 1467, as amended, is
hereby further amended to read as follows:

“SEC. 4. Who Shall be Insured. ~ Participation in the palay
AND OTHER crop insurance shall be compulsory for all farmers
obtaining production loans for palay AND OTHER CROPS under the
supervised credit program and [optional on the Part of] self-financed
farmers [provided that they agree to place themselves] under the
supervision of agricultural production technicians. No lending
institution shall approve or grant production loan for palay AND
OTHER CROPS under the supervised credit program unless the same is

covered by a crop insurance pursuant to this Decree. The term


1 “supervised credit program” as used in this Decree shall mean the

2 production credit program wherein the farmer who obtained production
3 loans for palay AND OTHER CROPS agrees in writing that he will
4 apply proven farm practices necessary to conserve the land, improve its
5 fertility and increase its production, and abide by the approved farm plan
6 and budget jointly prepared by him and the duly accredited supervised
7 credit technician. The term “supervision of agricultural production
8 technician” shall mean the supervision undertaken by agricultural
9 production technicians who are duly accredited by the appropriate
10 government agencies concerned as required under the supervised credit
1 system.”

12 SEC. 2. Section 5 of Presidential Decree No. 1467, as amended, is

13 _ hereby further amended, to read as follows:

14 “SECTION 5. Rate of Premium, [and] Its Sharing AND
15 AMOUNT OF INDEMNITY. —The rate of Premium, as well as the
16 allocated sharing thereof by the farmers, the lending institutions, the
7 Government of the Republic of the Philippines (herein called the
18 Government) and other parties, shall be determined by the Board of
19 Directors of the Corporation: Provided, That the share of the

20 Government in the premium cost, in the form of. premium subsidy, shall


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be limited to subsistence farmers: Provided, however, That each of these
subsistence farmers is cultivating not more than seven (7) hectares by
themselves or with the help of the labor of the members of their
households or hired labor, the premium rate and sharing to be
determined by the Board of Directors subject to approval by the
President of the Philippines: Provided, Surther, That the premium share
of the subsistence farmers shall be reasonably affordable by him:
Provided, furthermore, That the Government shall share in the premium
cost only in insurance coverage against unforeseen and unavoidable risks
such as, but not limited to, typhoons, droughts, outbreaks of pests and
diseases: Provided, finally, That premium subsidy and/or insurance
benefits shall, upon the accumulation of surplus funds, be increased to
such amounts as may be determined by the Board, taking into
consideration that the Corporation has been established not only for
profit but mainly to help the insured in their direst hours of need.

THE AMOUNT OF INDEMNITY WHICH THE FARMERS
MAY RECEIVE IN CASES OF LOSS DUE TO TYPHOONS,
DROUGHTS, OUTBREAKS OF PESTS AND DISEASES, SHALL
COVER AT LEAST FIFTY PERCENT (50%) OF A PORTION OF

THE EXPECTED YIELD, SUBJECT TO THE APPROVAL OF THE


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PCIC BOARD. THE BOARD SHALL TAKE INTO ACCOUNT THE

ACTUAL COST OF PRODUCTION INPUTS ALREADY APPLIED

AT THE TIME OF LOSS PER FARM PLAN AND BUDGET, AND

THE PERCENTAGE OF YIELD LOST.”

SEC. 3. All laws, decrees, orders, rules and regulations and other
issuances or parts thereof which are inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,