10:26 | 27/10/2015 Economy- Society
(VEN) – Agricultural insurance was piloted for rice varieties, livestock and seafood in 20 provinces and cities throughout the country in 2013. However after the pilot period, these results were disappointing. Therefore, agricultural insurance via public-private partnership (PPP) investments is expected to offer an alternative solution.
Addressing the final workshop of the project on supporting the design of a public-private agricultural risk management system in Vietnam, Non-life Insurance Division Deputy Head Bui Thanh Hai under the Ministry of Finance’s Insurance Supervisory Authority said that agricultural insurance had initially achieved positive results with around 304,017 households and an agricultural production unit participating in the program for nearly VND7.748 trillion in total insured value, VND712.9 billion in total compensation and VND394 billion in insurance premiums.
However, the implementation process faced difficulties, while the reinsurance rate remained low due to small numbers of subjects and areas participating in the program and extended natural calamities and diseases. In addition, technical infrastructure and information technology of each area remained limited, while staff remained inexperienced.
Maria Jose Pro from Spain’s Agricultural Insurance Agency said that close cooperation between the state and insurance companies, reinsurance companies and farmers was missing. Therefore, the agricultural insurance program had not yet proved a success. To expand the program, Vietnam needed to develop a long-term legal framework and specify the role of the relevant parties. In addition, earmarking financial resources from the state budget to attract the interest of insurance and reinsurance companies in order to reduce risks was needed.
Institute of Policy and Strategy for Agriculture and Rural Development Deputy Director Tran Cong Thang said that agricultural insurance via PPP investments was seen as a key solution to maintain and expand the program. However it would only achieve success if each party fully understood the strategic target and overall vision.
To improve agricultural risk management capacity, the project supporting the design of a public-private agricultural risk management system in Vietnam sponsored by the Spanish Agency for International Development Cooperation was deployed, starting from July 2013 to November 2015.
The Ministry of Agriculture and Rural Development’s Department of Cooperatives and Rural Development Deputy Director Le Duc Thinh said that agricultural insurance was a key policy. The results of the project would continue to be deployed and applied in the practice with the intention to improve the efficiency of the program. The Ministry of Finance submitted the project to the prime minister to ask for a decision to continue piloting agricultural insurance for rice varieties and livestock in provinces and cities following Decision 315, expand cattle insurance for districts in Ha Giang Province and halt the deployment of seafood insurance.