Press Release
March 22, 2010

Loren urges an expanded agri-fishery insurance
system in a Climate Change Program

Senator Loren Legarda, chairperson of Senate Committee on Agriculture and Food, noting that the Department of Agriculture calamity fund is not targeting farmers' needs because program planning is rather centralized and simplified in Manila, urges a re-assessment of the Philippine Crop Insurance system.

Loren proposed that the insurance system should cover all farmers and fisherfolks and their resources used for livelihood. "Farmers and fisherfolks should be able to insure their crops, poultry and livestock houses, boats, machineries and other farming/fishing paraphernalia so that in times of calamity, they get cash and be able to individually decide how to revive their livelihood. Even during natural calamities like El Nino or typhoons, different farmers may suffer different types of losses and we cannot simplify their needs by distributing a few inputs," Loren averred.

Loren, who is also the Senate Oversight Committee on Climate Change chairperson stated that "In floods for example, the waters in one farm may have ruined the crop but in a neighboring farm, it is the water pump. In times of calamities, the DA usually distributes crop inputs like seeds and fertilizers. Recently, some crop farmers are recipients to hogs which they could not feed. Some cooperatives have received machineries that they could not operate."

"Thus, an insurance system would be more suitable to ensure that farmers have the capital to start their own livelihood based on their actual needs. The government should conduct a feasibility study on this proposed insurance system to be funded by a grant from the Clean Investment Funds. According to a recent press report, the country is set to receive $250 million from the Clean Investment Funds (CIF) managed by multilateral organizations, including World Bank, Asian Development Bank (ADB) and European Bank for Reconstruction and Development. An insurance system covering all farmers and fisherfolks would help them adjust to weather disturbances brought on by El Nino, typhoons and other natural calamities. A major portion of the Presidential Calamity Fund should go into financing the Insurance system and serves as a counterpart funding against funds obtained from the Clean Investment Funds," Loren said.

The insurance system would require farmers and fisherfolks to register as members and thus establishing a good database that will serve as a more solid base for planning agricultural services. The insurance system will also ensure that coverage for all despite voting preferences.

For the immediate present, Loren proposes that the ACEF funds should be made available to small farmers whose capital needs entails less than PhP50,000. Currently, most loans from the ACEF involve millions of pesos for a single recipient. Repayment is very poor and no effort is expended to improve repayment. Since our experience with many agricultural cooperatives runs in similar manner, Loren suggests that well-managed non-profit organizations of some state universities may serve as the conduit of loans to small farmers. Since the ACEF has a program of providing multimillion peso grants to state colleges and universities, grant can then be used as seed funds for a credit facility for small farmers. Loren thus urges the DA to immediately conduct a feasibility study on this possible system and report the results to the COCAFM at the end of April, 2010. Loren is also the chairperson of the Congressional Committee on Agriculture and Fisheries Modernization (COCAFM).

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