Agricultural insurance –major policy to support farmers, rural areas

Agricultural insurance will help farmers reduce losses in the wake of natural disasters. Tran Thanh Diep, Director of the Southeast Asia Exports-Imports Company, which specializes in producing qualified farm products in Hai Phong City, said recent storms and floods have pushed her company and many farm households almost to bankruptcy. 

“We have invested a lot of money in growing safe vegetables and raising domestic animals. Each model is worth as much as US$44,000. In the absence of insurance, it will be hard for us to recover after a natural disaster,” Diep elaborated.

After 3 pilot years from 2013 to 2016, more than 300,000 households had agricultural insurance worth a total of nearly US$340 million.

Nguyen Quang Huyen, Deputy Director of the Insurance Supervisory Authority of the Finance Ministry, underscored the need for agricultural insurance against unpredictable natural disasters.

“It’s of extreme importance to expand agricultural insurance coverage and outline appropriate mechanisms to harmonize the interests of all parties involved. The insurance will be voluntary, with financial support from the local budget for poor and near-poor households,” Huyen said. 

Because most agricultural production in Vietnam is small scale, few farmers have paid much attention to agricultural insurance, which has not been sufficiently promoted.

Hoang Xuan Dieu, former head of the agricultural insurance section of Bao Viet Insurance Corporation, said agricultural insurance covers most major dairy cattle and rubber trees programs.

He added that insurance companies have now begun to introduce insurance services to businesses and households involved in aquaculture.                             

Dieu said “Credit institutions should attach insurance conditions to loans which will allow a reduction of interest rates. We hope the government will promulgate more specific policies to implement insurance.”

The Finance Ministry is refining a draft decree under which the state will subsidize insurance fees up to 20% for farmers and 90% for poor households. The decree is expected to take effect next year.