Ministry seeks ways to expand agricultural insurance program for farmers

On October 20, in Nghe An province, the Ministry of Finance (MOF) and the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) organised a workshop on the implementation of agricultural insurance.

A farmer covers buffaloes with canvas in the winter. Photo

This is an activity in the cooperation program between MOF and the GIZ Project "Regulatory Framework Promotion of Pro-poor Insurance in Asia” (RFPI Asia III). 

The objective of RFPI ASIA III Project is to increase access to insurance in the region by improving insurance policies and monitoring mechanisms for insurance operations while promoting superior insurance solutions for low-income economic sectors.

The workshop was chaired by Nguyen Quang Huyen - Deputy Director of Insurance Supervisory Authority under MOF. Participants come from the Insurance Supervisory Authority, Ministry of Agriculture and Rural Development (MARD), the Vietnam Farmers Union, and representatives of the People's Committees of 19 provinces supporting agriculture insurance policy according to Decision No. 22/2019/QD-TTg.

The workshop also had the presence of the Insurance Association of Vietnam, Bao Viet, Bao Minh company, and Institute of Architecture Planning under MARD.

The workshop discussed topics such as rules of agricultural insurance products including based on index rice insurance, livestock insurance (buffalo and cow), and fisheries insurance (shrimp). These products have been approved by the MOF under Decree No. 58/2018 /ND-CP on agricultural insurance and Decision No. 22/2019/QD-TTg on policies to support agricultural insurance, the use of information technology (RIICE) in agricultural insurance, and sharing experiences in implementing agricultural insurance in Nghe An province.

Participants agreed that agricultural insurance has proven to be an effective solution to support farmers in managing risk and dealing with the consequences of climate change.  However, more needs to be done to improve insurance products as well as the operational procedures in the sales and claims process. A major challenge for expanding agriculture insurance is to increase the awareness of farmers about its potential benefits. The local authorities find it difficult to implement the agricultural insurance due to its complicated procedures. 

At workshop on the implementation of agricultural insurance. Source: MOF

Need more support from Government

In June 2019, the Government issued Decision No.22 to allocate more funds for localities to implement the agriculture insurance programme.

The subjects covered by agriculture insurance are rice plants, buffaloes, cows, black tiger prawn and white-legged shrimp.

An individual who works in agriculture and is from a poor or near-poor household will receive support of up to 90 per cent for agricultural insurance premium from the Government.

Others who are not from poor or near-poor households will receive assistance of 20 per cent. Organisations which engage in agricultural production will be offered 20 per cent of fees if they meet specific requirements.

The assistance will be valid from June 26, 2019 until the end of 2020.

Nguyen Ba Trung - Director of Bao Viet Insurance in Nghe An province, asked the MOF and MARD soon propose to the Government to prolong the implementation of this policy so as not to waste resources implementing the program, while ensuring policy stability, building farmers confidence and increasing their willingness to pay for insurance products.

The seminar also listened to many opinions of localities, the Vietnam Farmers Association .... Answering the concerns of localities, Nguyen Quang Huyen - Deputy Director of Insurance Supervisory Authority said that the MOF had reported and proposed to the Prime Minister on the extension of the implementation period of Decision 22.

At the same time, the Ministry will direct insurance companies to perfect their products. Insurance products must be carefully designed to avoid that farmers apply practices that are not sustainable in the long-term. For some proposals from localities and businesses, Huyen said that the Ministry also recognized and synthesized to have reports to the competent authorities to improve policies, as well as propose most effective method in the deployment process.


Thu Pham