Deputy Prime Minister Vu Van Ninh has officially made a statement on the pilot agriculture insurance according to Decision 315 of the Prime Minister.

According to reports on results of pilot agriculture insurance, provinces and farmers want to continue to implement or expand the pilot agriculture insurance program. Therefore, Deputy Prime Minister comments that we should not end the pilot agriculture insurance program immediately while the Ministry of Finance has not proposed directions for deployment in the near future.

Deputy Prime Minister also assigns Ministry of Finance in cooperation with the Ministry of Agriculture and Rural Development to study for directions to deploy this insurance program. While researching the new policy, these two ministries and relevant agencies propose solutions to continue to deploy agriculture insurance in order to meet the needs and be in line with actual situations of enterprises and provinces.   

According to evaluation of the Ministry of Finance after the end of pilot agriculture insurance program in 2011 – 2013, the implementation of agriculture insurance in recent years as one of the measures to support farmers in production and business activities. In addition, the pilot agriculture insurance program also gives farmers the sense of agriculture production and pratices towards modernization. This is a fundamental objective that agriculture industry wants to achieve in order to get comprehensive production of goods.

However, after the actual deployment time, the Ministry of Finance also found that there were still many difficulties and certain restrictions for insurers to deploy this insurance scheme. For personnel issue, eventhough insurers have invested in recruitment, training for staff working in agriculture insurance, they still lack human resources and the staff has not had many experiences whilst areas of deployment are wide and complicated. Therefore, insurers face with many difficulties in providing services as well as risk assessment.

Meanwhile, some farmers still participated just to explore (with little or no participation), or selected high risk insurance objects to participate. This makes it difficult for the pilot activities to ensure the law of large numbers. During the deployment process, there were times when losses occurred on a large scale (especially in the field of aquaculture), this made it hard for insurers to finance for the insurance claims. However, insurers also worked hard to handle claims, ensure timely support for farmers to overcome losses and stabilize production.

According to preliminary reports from relevant agencies, agriculture insurance had a loss of over VND 22 billion, in which aquaculture insurance accounted for a large proportion.

After reviewing the pilot agricultural insurance scheme, the Ministry of Finance issued reports and proposals to the Prime Minister to maintain agricultural insurance. In particular, for crop insurance, choose “big field” to develop agriculture insurance; for livestock insurance, to insure for farm and household with relatively large herd size; for aquaculture (shrimp/fish), Ministry of Finance continued to propose to continue the pilot scheme until the end of 2015 and adjust the scale of production selected to be insured.

For insurers, the plan for deloying agriculture insurance should be based on evaluation of many factors such as: State’s policies for support, results achieved during the pilot time, etc. In every plan, profitability issue in deploying each insurance type will be priority for insurers to continue with this insurance product in the long run.

(According to Investment review)