Agricultural insurance plays an important role for farmers and cooperatives, but the proportion of customers participating in agricultural insurance is currently modest. Photo vnbusiness.vn

HÀ NỘI — Regulations and policies on agricultural insurance need to be amended and revised, as there are still many difficulties in implementation, experts said.

Agricultural insurance plays an important role for farmers and cooperatives, but the number of customers taking out agricultural insurance is currently modest.

For example, in Agribank, which is the main lead in the agricultural sector, holds more than VNĐ40 trillion of outstanding loans due to the adverse impacts of Typhoon Yagi, out of a total of VNĐ17 trillion from the damage caused. However, only 105 out of its 512 borrowers at the bank, who suffered damage from the typhoon, had insurance. This means that only 0.65 per cent of the bank's outstanding loans were protected by insurance.

This worrying fact demonstrates the need to increase the rate of insurance participation in the agricultural sector to protect the loans and assets of people and cooperatives.

The Director of the Ministry of Agriculture and Rural Development’s Department of Economic Cooperation and Rural Development, Lê Đức Thịnh, emphasised the need for measures to better support farmers in accessing agricultural insurance at affordable costs, noting that farm incomes remain relatively low.

According to Thịnh, agricultural insurance holds significant importance, yet the policies remain underutilised. To address this, it is essential to encourage greater participation from individuals and cooperatives. To enhance the appeal and effectiveness of agricultural insurance, the Government has tasked the Ministry of Finance with reviewing and amending specific provisions of Decree No. 58/2018/NĐ-CP on agricultural insurance, ensuring the policy aligns better with practical conditions.

Under the decree, the support for participating in insurance for poor and near-poor households is high, but the support from agricultural producers such as farm owners and cooperatives, who in fact are the main subjects participating in commodity production, is lower. Therefore, the Government should pay more attention to further supporting those who are participating in large-scale commodity production.

In addition Thịnh noted, guiding and supporting farmers and cooperatives to produce in chains, develop production and business plans, and implement risk management is hugely important, because when farmers and cooperatives produce in a sustainable way, the rate of participation in agricultural insurance will increase.

Experts added that another difficulty for agricultural insurance development is that the cost of determining damage in agriculture is complex. If the damage statistics are not accurate, insurance companies will not be confident in relying on it for compensation.

Đinh Thị Hằng, director of the Hà Anh Cooperative in the northern province of Bắc Kạn said that under the current agricultural insurance regulations, barns, vaccinations and food for livestock must be all be clearly defined. However, the regulations, which are only suitable for cooperatives that raise livestock, according to food hygiene and safety processes, limit the rate of participation in agricultural insurance.

Experts said that to increase the rate of agricultural insurance, it is necessary to enhance the links between insurance companies and credit institutions in implementing specific insurance credit packages, as these will help farmers and cooperatives feel more secure in insurance participation. — VNS