Improving the Agricultural Insurance Program to Enhance Resilience to Climate Change: Evidence from Rice and Corn Production in the Philippines

This study analyzed the factors that influence the adoption of rice and corn insurance and the extent of GAP adoption as a resiliency measure to climate change. Specifically, the study investigated GAP technologies related to pest and disease resilience in rice and corn production, determined the extent of awareness of farmers about these technologies, and analyzed uptake patterns and the determinants of the degree of GAP adoption. The relationship between rice and corn insurance and GAP was also assessed. A probit regression was used to examine the determinants of rice and corn insurance adoption. For corn, a Poisson regression was used to analyze the factors that influence the extent of GAP adoption and its relationship with corn insurance. The analysis contributes to the accumulating literature on crop insurance in two ways. First, this paper estimated the determinants of rice and corn insurance in the Philippines. Second, the importance of rice and corn insurance and other socio-economic and behavioral factors on the extent of GAP adoption was examined.

Results of this study showed that the adoption of crop insurance in the country is still wanting. Targeting certain farmers with specific characteristics can enhance the adoption of crop insurance. In particular, crop insurance providers can target rice farmers who are male, members of farmers’ associations, and have access to capital and remittances because they are more likely to insure their crops. Similarly, farmers with relatively larger planting areas can be targeted since they have a higher probability of insuring their crops.

For corn, on the other hand, the most important finding was the positive and significant effects of credit and farmers’ organization on corn insurance adoption. The strong positive effects suggest that broadening the corn insurance market can be effectively undertaken by targeting borrowing farmers and those affiliated to farmers’ organizations. Priority can be given to farmers with access to roads but located farther away from the market.