Agricultural insurance a priority

Profit would be a secondary consideration in providing wide-scale insurance for agriculture, said Viet Nam Association of Insurers president Trinh Quang Tuyen.

The main consideration was the wellbeing of the farmers , he said.

Insurance companies Bao Viet and Bao Minh were assigned by the Ministry of Finance to pilot an agricultural insurance programme in selected localities of 20 provinces and cities to ease the impacts of natural calamities and diseases on agricultural production.

Deputy Director of Bao Viet Insurance Nguyen Quang Phi urged the ministries of Agriculture and Rural Development and Finance, local authorities and insurance companies to join forces to pave the way for the implementation of agricultural insurance.

“The support from the State and local authorities is important to insurance companies,” he said.

The insurance regulations for rice, livestock and fish and shrimps had been worked out but still need adjusting to ensure they corresponded to each locality’s situation, Phi said.

He expected economies of scale would make the insurance affordable for farmers. For instance, if more than 50 per cent of livestock in a commune was insured, the cost would be halved.

The insurance would focus on dealing with diseases and natural disasters which caused serious and large-scale damage to agricultural production, he said.

Soc Trang Department of Agriculture and Rural Development deputy director Nguyen Van Khoi said he was worried the insurance might not benefit the poor. He said it would be difficult for poor households to produce enough to meet the scale to get insured.

In addition, the high insurance costs of 4 per cent of the yearly average yield would discourage farmers from participating in the insurance.

An Giang Department of Agriculture and Rural Development deputy director Doan Ngoc Hai said circulars of instructions for insurance revealed that some of the conditions were inappropriate.

He proposed that farmers would get compensation when their yield was lower than 85 per cent, instead of 75 per cent.

Detailed rules to clarify the insurance fee, the level of damages and the level of compensation were also needed to avoid disputes, he said.

Bao Minh Insurance Company deputy director Pham Xuan Phong said it was necessary to raise farmers’ awareness to get them to participate in agricultural insurance.

He said insurance contracts came into force only after farmers had paid their fees.

Ngo The Hien from the Ministry of Agriculture and Rural Development said a network of staff was needed and disease prevention needed to be enhanced.

“There will be a hard work ahead,” said Deputy Minister of Finance Tran Xuan Ha.

Preparation for the pilot agricultural insurance programme must be speed up for the insurance to reach farmers next month, he said.

Poor or nearly poor households will receive support from the Government to join the pilot programme with authorities covering 100 per cent and 80 per cent of insurance costs respectively. Others will be supported to the tune of 60 per cent while organisations will receive 20 per cent.

In 2010, agricultural production generated a turnover of more than 20 per cent of the country’s gross domestic products (GDP) while diseases and natural disasters caused damage valued at VND11.7 trillion (US$557 million).

Source VNS

Tags: agricultural insurance