Not There Yet
What were the results? Some 2,413 farmers signed up for a WIBI policy. Over the course of three years, 178 of those received payouts, totaling nearly US$30,000. Importantly, the recipients received payouts within five days, proving the advantage of WIBI over traditional insurance. The fast payouts enabled them to re-start planting activities in the same cropping cycle. This is critical as most farmers take out loans to purchase seeds and fertilizers, and a bad harvest immediately puts them in debt.
Does this mean that WIBI will replace traditional insurance? Probably not. During implementation, we also learned about the inherent shortcomings of WIBI. The biggest of which is the fact that it only covers damage related to rainfall. It does not cover pests and diseases, which rice farmers report as equally big risks for production.
In addition, the concept of WIBI is extremely difficult for farmers to understand. While traditional insurance is pretty intuitive — any damages to a farm, once verified by an insurance agent, will be compensated, whether they are due to pests, diseases or rainfall. Compensation under WIBI is determined by whether the right amount of rain falls in the various stages of a crop’s growth. Yet, farmers often do not know how many millimeters of rain are required in different stages for good harvests — creating confusion as to eligibility.
Many of us can empathize. I certainly cannot explain what kind of coverage I have under my health insurance.