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Social protection system ineffective for farmers

Update: July, 19/2012 - 09:40

HA NOI — Reducing expenses and borrowing money from relatives were key measures employed by small-scale farmers to cope with natural disasters and illnesses.

This was due to the lack of financial support from the country's social protection system for small-scale agriculture, according to the findings of a survey released yesterday.

The survey took account of nearly 600 farming households in the central province of Ha Tinh and southern province of Vinh Long.

Central Institute for Economic Management research co-ordinator Tran Binh Minh said nearly 50 per cent of surveyed households affirmed that illness and accidents of family members and natural disasters were the two most regular financial shocks they had to face.

The regular hikes in consumption and production costs also hit small-scale farmers.

Minh said the impact of income and asset loss from these shocks was high, potentially pushing small-scale farmers further into debt.

The annual income of each household in the provinces of Ha Tinh and Vinh Long reached VND27.7 million ($1,319) and 51.2 million ($2,438) respectively, mainly from agricultural production.

According to the research, illness or accidents of family members cost the largest amount of money, equivalent to 25 per cent of the annual income of each household under the poverty line. Meanwhile, natural disasters, especially floods caused losses equivalent to 23 per cent of the annual income.

Minh said to deal with the shocks, nearly 30 per cent of the surveyed households reduced their overall consumption and the same number borrowed money from relatives.

These measures served as short-term solutions and respondents did not know the exact time it would take to pay back the money.

Meanwhile, only 4.8 per cent of the surveyed households and 1.5 per cent relied on local financial institutions and insurances to deal with their shocks.

Dr Tri Thanh, deputy director of the Central Institute for Economic Management, said the research aimed to provide community-based evidence on the social protection system in the context of agriculture to help the Government strengthen existing measures.

Recommendations were also made on improvements to the current schemes in the agriculture sector as a means to mitigate risks and improve livelihoods, Thanh said. — VNS

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