Seventeenth Congress
irst Regular Session

HOUSE BILL NO, 4018 ©

Introduced by Honorable Peter “Sr. Pedro” M. Unabia

EXPLANATORY NOTE

The Philippine Crop Insurance Corporation (PCIC) provides free
insurance to all subsistence farmers and fisherfolks listed under their Registry
System for Basic Sectors in Agriculture (RSBSA) under the RSBSA
Agricultural Insurance Program (RSBSA AIP). The entire allocation is to be
used exclusively to cover the cost of insurance premiums of small farmers and
fisherfolks. In the 2015 General Appropriations Act, the allocated budget for the
RSBSA AIP was P1.3 billion.

However, according to the 2014 annual report of the PCIC, only 917,814
or 42.97% of farmers and fisherfolks have been enrolled in the RSBSA, which
the basis for the grant of free agricultural insurance premium. This
means that of the 11.21 million farmers and agricultural workers reported by the
Philippine Statistics Authority in 2014, only 8.19% are covered by the different
agricultural insurance packages of the PCIC, most of which are not free. In
2015, the PCIC reported that 589,534 farmers availed themselves of the RSBSA
= AIP, premium for which is free for covered farmers because it was fully paid
by the national government through the PCIC,

serves

Many individual farmers and farmer groups could not afford to insure
their crops’ because of the cost of insurance premiums, Neither can the PCIC
fully cover the premium for crop insurance of all small farmers duc to limited
funding. As a result, these farmers suffer immense losses whenever their crops
are damaged by typhoons, calamities and other similar contingencies.

This bill seeks to address this predicament of our lowly farmers. We
revisited Republic Act No, 8178, as amended, and modified the apportionment



of the Agricultural Competitiveness Enhancement Fund (ACEF) to cover
payments to agricultural insurance premiums of the PCIC for individual farme!
and farmer groups. On May 23, 2016, Republic Act 101848 amending further
Republic Act No. 8178, was passed, which extended the implementation of
ACEF until 2022.

Through this bill, part of the tariffs derived from importation of
agricultural goods to our country will be used to strengthen the local agriculture
industry by ensuring the expanded coverage of free agricultural insurance
program of the PCIC for qualified farmers. By supplementing the regular
budget of the PCIC for insurance premiums of farmers covered by the RSBSA -
AIP with 10% of the ACEF, most, if not all, small farmers in the rural areas can
feel more secured because their agricultural produce are already insured.

In view of the foregoing, immediate passage of this bill is earnestly
requested,



HOUSE BILL NO.

Introduced by Honorable Peter “Sr. Pedro” M. Unabia

AN ACT

PROVIDING FREE INSURANCE PREMIUM FOR FARMERS UNDER
THE PHILIPPINE CROP INSURANCE CORPORATION, AMENDING
FOR THE PURPOSE REPUBLIC ACT NO. 8178, AS AMENDED,
ENTITLED “4N ACT REPLACING QUANTITATIVE IMPORT
RESTRICTIONS ON AGRICULTURAL PRODUCTS, EXCEPT RICE,
WITH TARIFFS, CREATING THE AGRICULTURAL
COMPETITIVENESS ENHANCEMENT FUND, AND FOR OTHER
PURPOSES”

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

SECTION 1,

ction 8 of Republic Act No. 8178, as amended, is
hereby further amended to read as follows:
“SEC. 8, Agricultural Competitiveness Enhancement
Fund. ~ To implement the policy enunciated in this Act, there is
hereby created the Agricultural Competitiveness Enhancement
Fund, hereinafter referred to as the Fund. The Fund shall consist of

all duties collected from the importation of agricultural products


10

an

12

B

14

15

16

7

18

19

20

a4

22

under the minimum access volume (MAV) mechanism, including

unused balances and collections from repayments from loan

beneficiaries including interests, if any. The Fund shall be
automatically credited to Special Account 183 in the General Fund
of the National Treasury: Provided, That fund releases shall not be
subject to any ceiling by the Department of Budget and
Management (DBM).

XXX XXX XXX

The Fund shall be set aside and earmarked as follows:

(1) [Eighty percent (80%)] SEVENTY PERCENT

which shall

(70%), in the form of credit with reasonable interes
not exceed Five million pesos (P5,000,000.00) per project loan, for
the acquisition and establishment of agri-based production and
ing machinerie:

post-production, and_ process equipment and

facilities to achieve modern agricultural practices, to be extended

to Filipino farmers and fisherfolk associations and cooperatives,

and micro and small-scale enterprises as defined in Republic Act
No. 6977, as amended, engaged in agricultural production,
farming, fisheries, agri-business and similar activities, and not to
exceed One million pesos (P1,000,000.00) to individual farmers

and fishermen to finance the purchase of farm inputs, equipment,

or for farm improvement.


10

41

2

13

14

20

aa

22

‘The loan beneficiaries shall provide a counterpart fund or
equity of not less than ten percent (10%) of the total project cost,
which may be in the form of capital outlay, labor, land for the

project site, fe

ilities, equipment, and salaries.

The Land Bank of the Philippines shall manage the credit
facility funded out of the Fund and shall determine the eligibility
requirements and set the required loan security or collateral and
reasonable interest for the loan. For this purpose, the Land Bank is
hereby authorized to charge a management fee from the Fund:

(2) Ten percent (10%) as grants for research and

development of agricultural and fishery products, and the

commercialization of such, including the upgrading of research
facilities, of qualified state universities and colleges, which shall

not exceed Five million pes

(P5,000,000.00) per project; [and]
(3) Ten percent (10%) to be used for the funding of a

comprehensive and attractive grant-in-aid program for agriculture,

forestry, fisheries, and veterinary medicine education, to be

implemented by the Commission on Higher Education|.|; AND

(4) TEN PERCENT (10%) TO BE USED AS PREMIUM
PAYMENTS OF INDIVIDUAL FARMERS AND FARMER

GROUPS REGIS

JRED UNDER THE REGISTRY SYSTEM

FOR BASIC SECTORS IN AGRICULTURE m


AGRICULTURAL INSURANCE PROGRAM (RSBSA - AIP)
OF THE PHILIPPINE CROP INSURANCE CORPORATION.
XXX XXX ae
SEC. 2. All laws, decrees, executive 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.

S|

EC.3. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or a newspaper of general circulation

Approved,