Crop Insurance in the Philippines Only a few farmers are able to pay their loans every time their crops are destroyed by typhoons, plant diseases, and infestations. Such problem does not only seriously affect the economic conditions of the small farmers but also the lending institutions, the national government, and ultimately the whole economy. When farmers are not able to pay their bank loans, the loanable funds of financial institutions are reduced. This may lead to business loss and fewer loan applicants would be granted credit. In fact, many rural banks atopped their opera- tions due to the failure of many farmers to pay their leans under the Masagana 99 program of the government. As a

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98
AGRICULTURAL. ECONOMICS
planned solution to the nonpayment of eredit by the farmers,
the concept of crop insurancet has been introduced by the na-
tional governnent.
The Philippine Crop Insuraoce Corporation opened its
business on May 1, 1981. It has established regional offices
throughout the country. The initial target of the corporation is
to cover 309,000 palay farmens However, when the program is
fully implemented, the crop insurance corporation hopes to
benefit about 1.6 million farmers. Initially, only palay farmers
ander the supervised credit program have been covered by the
crop insurance system. Later, corn was included, along with
tobacco, banana, livestock, and the fisheries sector.
Records indicate that in 1979, an estimated P414 million
worth of properties, including crops about to be harvested, went
to waste due to the 22 typhoons that hit the country. The
devastation greatly reduced the farmers' ability to recover their
expenses. But if their crops are covered by insurance, they can
get back their production expenses, and they can pay their
bank loans. Parmers with production loans sre automatically
covered by the crop insurance program. Under the crop insur-
ance scheme, a farmer's loan or part of it will be paid by
the PCIC in case he defaults in his credit obligation to the
financial institution, due to crop losses caused by natural
calamities, plant diseases, and infestations.
Transcribed Image Text:98 AGRICULTURAL. ECONOMICS planned solution to the nonpayment of eredit by the farmers, the concept of crop insurancet has been introduced by the na- tional governnent. The Philippine Crop Insuraoce Corporation opened its business on May 1, 1981. It has established regional offices throughout the country. The initial target of the corporation is to cover 309,000 palay farmens However, when the program is fully implemented, the crop insurance corporation hopes to benefit about 1.6 million farmers. Initially, only palay farmers ander the supervised credit program have been covered by the crop insurance system. Later, corn was included, along with tobacco, banana, livestock, and the fisheries sector. Records indicate that in 1979, an estimated P414 million worth of properties, including crops about to be harvested, went to waste due to the 22 typhoons that hit the country. The devastation greatly reduced the farmers' ability to recover their expenses. But if their crops are covered by insurance, they can get back their production expenses, and they can pay their bank loans. Parmers with production loans sre automatically covered by the crop insurance program. Under the crop insur- ance scheme, a farmer's loan or part of it will be paid by the PCIC in case he defaults in his credit obligation to the financial institution, due to crop losses caused by natural calamities, plant diseases, and infestations.
Crop Insurance in the Philippines
Only a few farmers are able to pay their loans every time
their crops are destroyed by typhoons, plant diseases, and
infestations. Such problem does not only seriously affect the
economic conditions of the small farmers but also the lending
institutions, the national governrment, and ultimately the whole
economy. When farmers are not able to pay their bank loans,
the loanable funds of financial institutions are reduced. This
may lead to business loss and fewer loan applicants would be
granted credit. In fact, many rural banks atopped their opera-
tions due to the failure of many farmera to pay their leans
under the Masagana 99 program of the government. Au a
Transcribed Image Text:Crop Insurance in the Philippines Only a few farmers are able to pay their loans every time their crops are destroyed by typhoons, plant diseases, and infestations. Such problem does not only seriously affect the economic conditions of the small farmers but also the lending institutions, the national governrment, and ultimately the whole economy. When farmers are not able to pay their bank loans, the loanable funds of financial institutions are reduced. This may lead to business loss and fewer loan applicants would be granted credit. In fact, many rural banks atopped their opera- tions due to the failure of many farmera to pay their leans under the Masagana 99 program of the government. Au a
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