HOUSE OF REPRESENTAT! WES —

RECEIVED
SEVENTEENTH CONGRESS OF THE ) pave.__2 1 AUG 2016
REPUBLIC OF THE PHILIPPINES) rie
First Regular Session ) ‘
BY:
HOUSE OF REPRESENTATIVE: PrSISTATON UNIT
BRIS 4 SEeviel
HNo, 2177 - —

Introduced by Representative VILMA SANTOS-RECTO.
6th District of Batangas

AN ACT
AUTHORIZING THE GRANT OF A FULL CROP INSURANCE COVERAGE TO
QUALIFIED BENEFICIARIES OF THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM AMENDING FOR THE PURPOSE SECTION 14 OF REPUBLIC ACT NO.
9700, OTHERWISE KNOWN AS THE “COMPREHENSIVE AGRARIAN REFORM
PROGRAM EXTENSION WITH REFORMS”

Explanatory Note

Over the past years, the Philippines suffered extreme weather events such as heavy rains,
typhoons and droughts that were more intense than what had been normally experienced. The
Department of Agriculture (DA) estimates that the agricultural damage wrought by the El Nifio
Southern Oscillation Phenomenon since February 2015 already reached PS.32 billion in February
of this year', P1.34 billion of which was incurred during its peak months of January and
February”. Typhoon Nona brought about P4.33 billion worth of damage to agriculture when it
struck the country in December 2015°, This is after Typhoon Pablo caused about P11 billion
worth of damages a month earlier, P9.69 billion of which was suffered by the agricultural areas
in Regions I, II, III, IV-A, IV-B, V and CAR‘. These disasters take a great toll on Filipinos for
they can disrupt livelihood and affect food production. The poor, more particularly those
engaged in agriculture suffer the most because their household and livelihood are usually located
in areas most vulnerable to natural hazards and calamities.

Crop insurance is one of the government's instruments in mitigating agricultural risks and
addressing the consequence of calamities on the agricultural sector. As a risk management tool,
crop insurance provides two advantages. One, it makes losses more bearable by providing
immediate financial support so affected farmers would have better options than waiting for the
next planting season or resorting to borrow money at usurious rates. With the sum of money
paid, the farmers are able to immediately replant as soon as weather and soil condition permits.
Two, it provides a mechanism to mitigate the effects of calamities on crop production, sustaining
not only the farmer’s family income, but the country’s food security as well.

In the Philippines, the Philippine Crop Insurance Corporation (PCIC) implements and
manages the government program on agricultural insurance.However, the participation of
agricultural workers in the government agricultural insurance program remained low. In 2014,
PCIC only insured some 792,208 hectares of land and 917,814 farmers and paid claims worth

' Miraflor, M. B. (2016, March 12). El Nifio causes PS-B losses to agriculture. Manila Bulletin.

? Domingo, R.W. (2016, March 3). El Nifio damage rises to P4.77B. Philippine Daily Inquirer.

*National Disaster Risk Reduction and Management Council. (2015, December 24). Situational Report No. 19 re:
Preparedness Measures and Effects of Typhoon “NONA” (I.N. MELOR).

* National Disaster Risk Reduction and Management Council. (2015, November 3). Situational Report No. 26 re:
Preparedness Measures and Effects of Typhoon “LANDO” (ILN. KOPPU).



P738.45 million to 87,855 farmers’. These figures revealed that in 2014, PCIC was only able to
insure about 11% of farm areas and about 8.8% of agricultural workers®.

One of the reasons for the low farmer participation in crop insurance is the premium
required to participate in the program. Although government extends assistance through
insurance subsidies, the balance of premium payments is still a burden to many of our poor
farmers.Poor farmers and land tenants could barely make ends meet, let alone take insurance
policies for their crops.

This billseeks to address this predicament by providing the qualified beneficiaries of the
Comprehensive Agrarian Reform Program a full crop insurance coverage. It sustains the policy
enshrined in the Comprehensive Agrarian Reform Program which states that the welfare of the
landless farmers and farm workers will receive the highest consideration to promote social
justice and to move the nation toward sound rural development and industrialization. Ultimately,
this bill seeks to contribute in helping every Filipino farmer rise out of povert

In light of the foregoing, immediate passage of tHe bill is egmestly sou;

VILMA SANTOS-RECTO

“Philippine Crop Insurance Corporation (2014). Annual Report 2014: Ensuring Financial Stability & Exercising

Greater Social Responsibility.

“Figures for agricultural land area (7,190,087 hectares) taken from 2012 Census of Agriculture. Figures for
agricultural workers (10,405,000) taken from 2014 Labor Force Estimates.



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SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES,

H.No. 2177

Introduced by Representative VILMA SANTOS-RECTO.
6th District of Batangas

AN ACT
AUTHORIZING THE GRANT OF A FULL CROP INSURANCE COVERAGE TO
QUALIFIED BENEFICIARIES OF THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM AMENDING FOR THE PURPOSE SECTION 14 OF REPUBLIC ACT NO.
9700, OTHERWISE KNOWN AS THE “COMPREHENSIVE AGRARIAN REFORM
PROGRAM EXTENSION WITH REFORMS”

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

SECTION 1. Section 14 of Republic Act No. 9700, otherwise known as. the
“Comprehensive Agrarian Reform Program Extension with Reforms” is hereby amended to read
as follows:
“See. 14,Section 37of Republic Act No. 6657, as amended, is hereby further amended to
read as follows:

"Sec. 37. Support Services for the Agrarian Reform Beneficiaries. - The

State shall adopt the integrated policy of support services delivery to

agrarian reform beneficiaries. To this end, the DAR, the Department of

Finance, and the Bangko Sentral ng Pilipinas (BSP) shall institute

reforms to liberalize access to credit by agrarian reform beneficiaries.

The PARC shall ensure that support services for agrarian reform

beneficiaries are provided, such as:

“(a) xxx ;

“XXX;
“() xxx; AND
“(G) FULL CROP INSURANCE COVERAGE TO FARMER BENEFICIARIES.
COMPENSABLE LOSSES INCLUDE NATURAL CALAMITIES SUCH AS
TYPHOON, FLOOD, DROUGHT, EARTHQUAKE AND VOLCANIC ERUPTION,
PLANT DISEASES AND PEST INFESTATIONS. THE TERM OF INSURANCE IS
FROM PLANTING UP TO EXPECTED DATE OF HARVEST.

XXX.

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Sec. 2. Appropriations. — The Secretary of Agriculture shall immediately include in the
Department’s program the needed operational requirement of this Act, the initial funding of
which shall be charged against the corporate fund of the PCIC. Thereafter, projections of the
premium subsidy requirement shall be submitted by the Philippine Crop Insurance Corporation
(PCIC) to the President, and shall be included in the annual General Appropriations Act.

Sec. 3. Implementing Rules and Regulations. — The Presidential Agrarian Reform
Council, the Department of Agriculture (DA), the PCIC, and the Department of Agrarian Reform
(DAR) shall provide the necessary implementing rules and regulations within thirty (30) 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. 4.Separability Clause. ~ If any provision, section or part of this Act shall be
declared unconstitutional or invalid, such judgment shall not affect, invalidate or impair any

other provisions, sections or parts hereof.

Sec. 5.Repealing Clause. — All laws, acts, decrees, executive orders, issuances, and rules
and regulations or parts thereof which are contrary to and inconsistent with this Act are hereby
repealed, amended or modified accordingly.

SEC. 6.Effectivity. - This Act shall take effect fifteen (15) days following its publication
in at least two (2) newspapers of general circulation or the Official Gazette.

Approved,

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