Loss reduction effects of rice farmers' participation in crop insurance program

Issue Date

8-2015

Abstract

The study determined income loss effects among 40 rice farmers in selected lakeshore municipalities in Laguna as a consequence of their participation in the PCIC's Rice Insurance Program. From the total amount of indemnities paid by PCIC in 2011, the largest amount of PhP375.40 M was received by rice farmers which accounted for 93.5% of the total. This was the same year that the data were obtained from NEMCO and NBMMPC. This indemnity amount paid to rice farmers was 76.2% higher than the 2010 figures. Percent yield loss estimates of PCIC are significantly lower as compared to the farmer-participants' estimates of percentage yield loss by farm size, variety planted, farm location relative to the lakeshore, and source of risk at 1% probability level. About 25% of the yield loss in the sample farms was due to the occurrence of floods. Pest risks coefficient was negative and insignificant. Likewise the effect of farm location, rice variety, and farm size coefficients were insignificant.

Highly significantly regression coefficients indicate that percent yield loss influences the amount of indemnity payments. At the farm level, an increase of 1% in the percent yield loss increases the amount of indemnity paid by PhP137. On a per hectare basis, the amount would be PhP145. The stage of cultivation of the rice crop and the variety of rice planted at the farm level equation had positive and significant coefficients. The amount of losses were significantly reduced as a result of the sample farmers' participation in the Rice Insurance Program at 1% probability level. Considering all the farmer-participants, the average amount of loss reduced was PhP11,952.85 per farm, and PhP5,260.94 haˉ¹.

Source or Periodical Title

Philippine Journal of Crop Science

ISSN

0115-463x

Volume

40

Issue

2

Page

45-58

Document Type

Article

Frequency

tri-quarterly

Physical Description

tables, graphs, maps, charts

Language

English

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