Wednesday, August 22 2018

VietNamNews

Agricultural insurance flawed

Update: December, 23/2017 - 12:37

Viet Nam News

HÀ NỘI – Since an agriculture insurance pilot programme began in 2011, it has come to play an important role in farmers’ financial lives, but still has many shortcomings, said Hoàng Quang Phòng, vice president of the Việt Nam Chamber of Commerce and Industry (VCCI) at a forum held in Hà Nội on Thursday.

“Việt Nam is an agricultural country, but annual natural disasters and epidemics have robbed farmers of their property. So farmers need a guarantee for their labour and productivity, and agricultural insurance is the best choice," he said at the forum, titled “Identify challenges and promote growth”.

He said that agriculture is a traditional insurance product of over 500 non-life insurance products offered in the global insurance market.

Việt Nam has forcefully developed mechanisms and policies since the programme began six years ago. But there are numerous problems.

Although the government and the agricultural sector have attempted to incentivise businesses to increase investment, the amount of investment in this sector remains low because the profit potential is low and risks are high, he said.

According to statistics provided by the Ministry of Agriculture and Rural Development, less than 1 per cent of all enterprises in the country invest in agriculture and most of them operate on a small scale.

Insurance firms also said that they have not been interested in the agriculture sector because they must often pay out large sums while collecting only a small fee.

Hoàng Thị Tính, General Director of Agriculture Bank Insurance Joint Stock Corporation (ABIC), said agriculture insurance required significant capital and a large number of participants, but few enterprises met the requirements.

“Insurance firms face difficulty in evaluating losses because of inaccurate disease statistics. Meanwhile, farmers do not have much money to pay high insurance fees,” she said.

According to Hoàng Xuân Điều, representative of Bảo Việt Insurance Company, farmers know little about agriculture insurance and still wait for support from the State, so few people want to buy this insurance.

He said that it was necessary to improve agriculture insurance on a large scale to help farmers benefit from this policy. Insurance companies should be more active in designing insurance products. And the State should continue to assist in agriculture production as well as tax reduction.

Policies to encourage farmers to buy agriculture products and support insurance companies while they face unavoidable risks due to epidemics or natural calamities were also needed, said Tăng Minh Lộc, vice president of Việt Nam Agricultural Science Association.

“Agricultural insurance is the best way to bring farmers to commodity production and an important solution for the State to promote the restructuring and development of agricultural commodities," he said. - VNS

 

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