Scaling up risk transfer mechanisms for climate vulnerable agriculture-based communities in Mindanao, Philippines
The Philippines is one of the most natural disaster-prone countries in the Asia-Pacific. Climate change projections indicate an increase in vulnerability, particularly in terms of unpredictable rainfall patterns.This puts the livelihood of farmers and food security in the Philippines at risk, especially on the island of Mindanao, also known as the “food basket” of the country.
In an effort to address these climate risks, the government-owned Philippine Crop Insurance Corporation (PCIC), in collaboration with UNDP, started the project “Scaling Up Risk Transfer Mechanisms for Climate Vulnerable Agriculture-Based Communities in Mindanao” in 2014. The goal of the project was to strengthen the resilience of vulnerable farming communities by enhancing the uptake of pilot-tested climate risk insurance and increasing local capacities to improve agricultural productivity and disaster risk reduction.
To increase the uptake of insurance, the project improved the payout mechanism, customized insurance products to local needs, and provided the farmers with financial support. To improve local capacities and increase agricultural productivity, the project set up a participatory training and learning program for farmers and other key stakeholders, where all were encouraged to share their experiences on how to enhance productivity in agriculture and reduce disaster risks.
The project constitutes a good practice because it is based on comprehensive technical analyses and effective in terms of its intended objective. Furthermore, the project brings about sustainable development benefits for the farmers.
· IMPROVED AWARENESS: The project improved awareness among farmers about climate change induced disasters, and trained them in climate adaptive strategies to make their production more resilient to climate change. Large-scale farmers saw an increase in agricultural yield following the Rice Crop Manager training and the enrolled farmers also saw a notable decrease in crop damage in years where WIBI payouts were not given.
· HIGHER AGRICULTURAL PRODUCTIVITY AND SOCIAL CO-BENEFITS: By September 2016, 103 farmers had received payouts amounting to PHP 900,000 (approx. USD 16,755) (UNDP, 2016). The payouts allowed farmers to buy seeds and fertilizer, leading to higher crop yield. They also used the payoutsto pay for food and education for their children, leading to nutritional augmentation and a better future for the latter.
· POLITICAL SUPPORT: The successful engagement of the project stakeholders in working towards an effective and replicable product led to enhanced interest from both the Congress and the Senate of Philippines in the process of rolling out the WIBI product across the country. In 2016, Congressman Yap supported the recapitalization of PCIC from PHP2 billion (approx. USD 36,967,560) to PHP10 billion (approx. USD 184,837,800) (UNDP, 2016). This will allow PCIC to take on all WIBI-related liabilities, thereby reducing the risk for private insurance companies that promote the WIBI scheme. The high level of government interest has strengthened the roll-out of the next phase of the project, where the WIBI scheme will be scaled up to include other regions.
· ENHANCED REPLICABILITY: Due to the indexing protocol created by PhilRice, a standardized index for rice and corn has been created, which can be easily replicated across the country. Studies have also been conducted to include other crops as well as more varieties of rice and corn.
The project was implemented by the Philippine Crop Insurance Corporation (PCIC). The project structure included a Project Board, a Project Management Office (PMO) and Responsible Parties (including the Philippine Rice Research Institute, PAGASA, Department of Agriculture, Agricultural Credit Policy Council, Agricultural Guarantee Fund Pool, Climate Change Commission, Agricultural Training Institute) which were engaged to provide technical expertise for the project.
The Project Board was responsible for making management decisions for the project, as well as providing supervision and strategic guidance. It was comprised of representatives from the Departmentof Agriculture, PCIC, UNDP, the Climate Change Commission and the National Economic and Development Authority.