Boosting coverage of agricultural insurance

Agricultural insurance is a new and somewhat complex concept in Vietnam and farmers in general pay it little attention, even though natural disasters cause annual losses of 1 to 1.5 per cent of GDP. The Ministry of Finance plans to expand the number of local supporting agricultural insurance with funds of VND83.2 billion ($3.7 million) each year, to reduce the risk for people from disasters.

The Ministry of Finance is collecting comments on the draft Decision of the Prime Minister on the implementation of policies to support agricultural insurance.

FARMERS ARE NOT SATISFIED, MULTIPLE IMPROVEMENT IN THE IMPLEMENTATION 

Evaluating the implementation of agricultural insurance support policies over the past time, the Ministry of Finance pointed out that there are still many limitations.

Specifically, a number of policies and guiding mechanisms were issued slowly. For example, Circular No. 09/2020/TT-BNNPTNT guiding the certification of natural disasters and epidemics in the implementation of agricultural insurance support policies was issued on July 24, 2020, while insurance products ratified on May 26, 2020. This leads to the localities facing difficulties and confusion in organizing the implementation.

The results of granting insurance policies are still very limited. Only 03/19 provinces including Nghe An, Ha Giang and Binh Dinh have insurance implementation results. At the same time, only two thirds of the insured objects supported are rice and livestock (buffalo, cow). 

The implementation in some localities and establishments is still awkward. Only a few People's Committees of provinces and centrally run cities have approved the beneficiaries, leading to difficulties for insurance enterprises in identifying, accessing and issuing insurance policies for farmers. people.

According to statistics, on average, each year natural disasters cause damage from 1-1.5% of GDP and cause long-term consequences, affecting the production and daily life of people.

According to the Ministry of Finance, agricultural insurance is a complex and high-risk business stemming from the unpredictable fluctuations of natural disasters and epidemics.

“The implementation requires insurance businesses to have great financial capacity, a team of qualified and experienced staff and a wide enough product distribution network to ensure accessibility to village facilities, hamlets, cooperatives. At the same time, with the participation of protection from international reinsurers and with the timely support and close coordination of local authorities," the Ministry of Finance assessed.

Although much experience has been gained after the 2011-2013 pilot implementation period, agricultural insurance is still fundamentally a new and complicated product not only for the farmers themselves but also for the farming team. policy enforcement staff at the facility.

Besides, the awareness of some farmers about agricultural insurance is still limited. Weather conditions in the supported aquaculture areas are quite stable, limiting the need for insurance participation of organizations and individuals in aquaculture.

In addition, the policy to support agricultural insurance takes place during the outbreak of the Covid-19 epidemic. Insurers face many difficulties in accessing farmers due to compliance with regulations on social distancing.

It is known that Decree No. 58/2018/ND-CP dated April 18, 2018 on agricultural insurance and Decision No. 03/2021/QD-TTg dated January 25, 021 amending and supplementing a number of articles of Decision No. 22/2019/QD-TTg dated June 26, 2019 of the Prime Minister on the implementation of policies to support agricultural insurance, effective from June 26, 2019 to December 31, 2019. 2021.

Thus, as of December 31, 2021, the agricultural insurance support policy has ended. Currently, there is no decision of the Prime Minister on the implementation of the agricultural insurance support policy for the period after December 31, 2021.

NO LEGAL VALUE, MINIMIZING DISASTER RISKS

The Ministry of Finance emphasized that, in the next stage of implementation, it is necessary to ensure the principle of continuity, stability without interruption and no legal gaps that cause difficulties for insurers in the current organization. Like farmers' participation in insurance, due to the seasonal nature of agricultural production, the crop can last from year to year and across levels of government.

The Ministry of Finance shall develop and submit to the Prime Minister for promulgation a decision on the implementation of the agricultural insurance support policy for the period from January 1, 2022 to December 31, 2025, inheriting the contents of Decision No. 22/2019/QD-TTg, at the same time, adding supported insured objects, supported areas, and insured risks.

Based on the opinions of the Ministry of Agriculture and Rural Development and balancing the state budget, the Ministry of Finance proposed to support the localities.

Specifically, rice plants in 7 provinces of Thai Binh, Nam Dinh, Nghe An, Ha Tinh, Binh Thuan, An Giang, and Dong Thap.

For buffaloes and cows, in 11 provinces and cities directly under the Central Government, they are Ha Giang, Vinh Phuc, Hanoi, Thanh Hoa, Nghe An, Binh Dinh, Gia Lai, Dak Lak, Lam Dong, Dong Nai and Binh Duong.

For pigs in 9 provinces and centrally-run cities are Bac Giang, Hanoi, Thai Binh, Nam Dinh, Thanh Hoa, Nghe An, Binh Dinh, Dak Lak, and Dong Nai.

Black tiger shrimp, white leg shrimp, in 5 provinces of Ben Tre, Tra Vinh, Soc Trang, Bac Lieu and Ca Mau.

Thus, the draft expands support for livestock insurance (buffaloes and cows) in the three provinces of Gia Lai, Dak Lak, Lam Dong and livestock (swine) in nine provinces, Bac Giang city, and Hanoi. , Thai Binh, Nam Dinh, Thanh Hoa, Nghe An, Binh Dinh, Dak Lak, Dong Nai. These are provinces and cities with large herds of over 300,000 cows and a large pig herd of over 1 million heads.

The promulgation of policies to support agricultural insurance will continue to improve the effectiveness and efficiency of the implementation of the national target program on building new rural areas in association with restructuring the agricultural sector.

At the same time, creating conditions for organizations and individuals producing in the agriculture, forestry and fishery industries to proactively overcome and offset financial losses due to risks occurring in the production process, ensure social security, promoting agricultural restructuring.

The expansion of insured objects and insured risks will encourage people to pay attention and participate in insurance, contributing to ensuring the effectiveness of the policy. For businesses, create opportunities for insurers to research, expand and develop their agricultural insurance business.

On the basis of the insured subjects supported, the level of support, the insured risks, the supported geographical areas, the state budget's annual budget for agricultural insurance premium support is estimated at 83, 2 billion/year.

In which, the insurance premium supported by the state budget is about 74.9 billion VND/year, including the cost to support rice insurance about 18.4 billion VND/year; funding for insurance support for buffaloes, cows and pigs is about 47.5 billion VND/year; funding for insurance support for black tiger shrimp and white leg shrimp is about 9 billion VND/year.