EIGHTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES
First Regular Session
SENATE
C  ►H O
S.B. NO. t i d
C(i.tfviaKfr--ri'wr?
)
T9 
JUL 17 P2 55
ric- '
Introduced by Senator Maria Lourdes Nancy S. Binay
AN ACT
ESTABLISHING A MANDATORY CROP INSURANCE COVERAGE FOR 
SMALL 
FARMERS, 
PROVIDING 
FOR 
A 
NATIONAL 
GOVERNMENT 
SUBSIDY, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Article II, Section 9 of the 1987 Philippine Constitution provides:
"The State shall promote a just and dynamic social order that will 
ensure the prosperity and independence of the nation and free 
people from poverty through policies that provide adequate social 
services, promote full employment, a rising standard of living, and 
an improved quality of life for all."
Farmers play a vital role in all aspects of our lives. They are responsible for the 
food we consume to feed our families every day as well as providing the 
resources that are necessary to produce clothing. Farming is critical to our 
society and therefore should be protected by the State.
The Philippines is exposed to a large number of typhoons annually as well as 
other natural complications like El Nino and La Nina, and pest infestations. Our 
agricultural production is highly affected by such disasters and calamities. Thus, 
Crop insurance is necessary in order to safeguard our farmers' livelihood from 
extreme weather conditions and other natural complications.


This proposed bill seeks to provide assistance to small farmers in their times of 
need by establishing a mandatory crop insurance program in order to ensure 
agricultural productivity and food security in our country.
In view of the foregoing, the passage of this measure is earnestly sought.
--------
MARIA LOURDES N ANof S. BINAY 
Senator


EIGHTEENTH CONGRESS OF THE REPUBLIC 
) 
-
OF THE PHILIPPINES 
’
First Regular Session
SENATE
S.B. NO. 
f~ 7 2
))
i ( u c  Cl li).' sS'i u’iarp
■19 JUL 17 P2 55
RtU .
Introduced by Senator Maria Lourdes Nancy S. Binay
AN ACT
ESTABLISHING A MANDATORY CROP INSURANCE COVERAGE FOR 
SMALL 
FARMERS, 
PROVIDING 
FOR 
A 
NATIONAL 
GOVERNMENT 
SUBSIDY, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
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Section 1. Short Title. -  This Act shall be known as the "Crop Insurance
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Program for Small Farmers Act of 2019."
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Sec. 2. Declaration o f Policy. -  It shall be the policy of the State to
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promote genuine inclusive growth and alleviate poverty. It is likewise the policy
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of the State to promote a just and dynamic social order that shall ensure
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prosperity, promote full employment, a rising standard of living and an improved
8 
quality of life for all.
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In pursuit of this, the State shall develop a program that will ensure that
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farmers and their crops are protected from negative impacts of extreme
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weather/climate conditions, plant diseases and pest infestations, and other
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disasters, thereby protecting crop production, ensuring food security and
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farmers' livelihood.
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Sec. 3. Crop Insurance for Small Farmers Program. -  (a) The Department
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of Agriculture (DA) in coordination with the Philippine Crop Insurance


1 
Corporation (PCIC) shall develop a special Crop Insurance Program for Small
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Farmers, guided by the following objectives:
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(1) Promotion of food security through palay and other crop
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production;
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(2) Provision of immediate support and protection to farmers incurring
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crop losses due to extreme conditions; and
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(3) Alleviate the financial burden of farmers due to uncompensated
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losses.
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(b) The Crop Insurance Program for Small Farmers shall operate under an
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insurance framework including, but not limited to, the following:
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(1) The 
Philippine 
Atmospheric, 
Geophysical 
and 
Astronomical
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Services Administration (PAGASA) shall be the primary reference
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weather station from which observed weather parameter shall be
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obtained. Other reference weather stations may include other
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weather stations accredited by PAGASA;
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(2) There shall be an identified trigger or threshold reference point to
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serve as a basis of measurement wherein in case of an occurrence
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of a breach the PCIC is obligated to indemnify and pay the
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required payout of the insured;
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(3) Phases of crop growth shall be covered by the insurance where a
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separate trigger and payout may be determined;
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(4) The payout or the insurance payment shall be based on a pre-
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determined schedule 
that takes into 
account the actual area
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planted; and
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(5) Any breach of the threshold reference point shall be the basis of
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any payout. Declaration of a State of Calamity in a local
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government unit shall not be required to trigger the obligation of
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the PCIC to the insured farmers.
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Sec. 4. Terms and Conditions. -  Within ninety (90) days after the
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effectivity of this Act, the Department of Agriculture (DA) in coordination with the
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Philippine Crop Insurance Corporation (PCIC), and in consultation with the
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Insurance Commission (IC) shall formulate the terms and conditions which shall
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govern a comprehensive insurance scheme for the benefit of the farmers. The
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terms and conditions shall be published in the Official Gazette or in a newspaper
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of general circulation in the Philippines.
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Sec. 5. Insured Farmers under the Crop Insurance Program for Small
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Farmers and Premium Subsidy. -  (a) All farmers of palay and other crops owning
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or cultivating eight (8) hectares of farmland and below shall automatically be
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covered by the Crop Insurance Program for Small Farmers. Subsidy for insurance
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premiums shall be determined by the following qualifications:
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(1) For farmers owning or cultivating five (5) hectares of farmland
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and below, the National Government shall fully subsidize their
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insurance premiums; and
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(2) For farmers owning or cultivating more than five (5) hectares but
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not exceeding eight (8) hectares of farmland, the National
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Government shall only cover and subsidize fifty percent (50%) of
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their insurance premiums.
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(b) The DA together with the Department of Agrarian Reform (DAR) and
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PCIC, in coordination with local government units, shall develop, maintain and
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annually update a database of farmers covered under this Program, and
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determine their qualifications as to the type of subsidy covered;
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(c) The DA and PCIC shall develop a system for the processing and
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payment of the fifty percent (50%) insurance premiums not covered by National
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Government subsidy. Such premium may be paid in money or in a quantity of
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paddy the value of which shall be equal to the amount of the premium due to
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the farmer, such value being computed according to the current market price of
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the crop as determined by the DA.
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(d) All farmers covered under this Act shall be deemed to have entered 
into a contract of insurance with the National Government through the PCIC; and
(e) Small farmers who are currently covered by an existing crop insurance 
shall have an option to choose whether to remain under their existing crop 
insurance or be covered by the Crop Insurance Program for Small Farmers.
Sec. 6. Rate o f Premium. -  The rate of premium shall be determined by 
the Board of Directors of the Philippine Crop Insurance Corporation (PCIC) 
subject to the approval by the President of the Philippines.
Sec. 7. Source o f Funding. -  In accordance with Section 5(a) of this Act, 
insurance premiums of small farmers shall be subsidized by the National 
Government. The funding for this Program shall be deemed appropriated from 
the funds of the Department of Agriculture.
Initially, the premium subsidy for the first year of implementation shall be 
drawn on a month-to-month basis, depending on the actual amount of insurance 
underwritten by the PCIC. Subsequently, projections of the premium subsidy 
shall be submitted to the PCIC to the President, and upon the approval of the 
President shall be included in the National Expenditure Program.
Sec. 8. Claim to Indemnity. -  In cases where the identified trigger or 
threshold reference point has been breached, the insured person shall submit a 
written claim to indemnity in respect of losses incurred to the municipal 
agriculturist. The municipal agriculturist shall then forward the written claim to 
indemnity to the PCIC.
The payment of indemnity shall be in accordance with the terms and 
conditions set forth by the DA and PCIC under Section 4 of this Act.
Sec. 9. Implementing Rules and Regulations. -  The Department of 
Agriculture, and the Philippine Crop Insurance Corporation, in consultation with
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relevant government agencies and instrumentalities, shall provide the necessary 
implementing rules and regulations within sixty (60) days upon the approval of 
this Act. Such rules and regulations shall take effect after they have been made 
and shall be published in at least two (2) newspapers of general circulation.
Sec. 10. Separability Clause. -  If any provision of this Act is declared 
invalid or unconstitutional, the remaining parts or provisions not affected shall 
remain valid and subsisting.
Sec. 11. Repealing Clause. -  All laws, acts, decrees, executive orders, 
issuances, and rules regulations or parts thereof which are contrary to and 
inconsistent with this Act are hereby repealed, amended or modified accordingly.
Sec. 12. Effectivity Clause. -  This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in two (2) newspapers of general 
circulation.
Approved,