What is Agricultural Insurance?

According to the provisions of the Amended Insurance Business Law 2010: Agricultural insurance falls under non-life insurance, covering risks arising in the field of agricultural production and rural life, including risks associated with: crops, livestock, materials, goods, and factory raw materials.

Agricultural activities often encounter the following risks:

- Weather risks: These are risks related to unpredictable and unforeseeable weather phenomena.- Agricultural production risks: These are risks related to factors such as pests, diseases in crops and livestock...- Economic risks: These are risks related to fluctuations in the prices of agricultural products and input materials due to unpredictable market changes.- Financial and commercial operation risks: These risks stem from the impact of other production sectors on agriculture.- Institutional risks: These are risks arising from government agricultural policies.- Environmental risks: These risks are due to the negative impacts of external activities affecting the agricultural production environment.

Given these risks, it can be seen that agricultural insurance plays a crucial role in mitigating the damages for farmers against unforeseen risks such as:

- Agricultural insurance helps to limit risks related to production, ensuring the stability of farmers' income;- Agricultural insurance provides farmers with peace of mind to focus on production, thereby increasing labor productivity;- Agricultural insurance provides a certain capital source for farmers.

Previously, the Prime Minister of the Government of Vietnam signed Decision 315/QD-TTg (amended and supplemented by Decision 358/QD-TTg) on the pilot implementation of agricultural insurance applicable during 2011 - 2013, which stipulated the state's support levels and the beneficiaries as follows:

- 100% insurance fee support for poor farmers and individuals engaged in agricultural production participating in the pilot agricultural insurance.- 90% insurance fee support for near-poor farmers and individuals engaged in agricultural production participating in the pilot agricultural insurance.- 60% insurance fee support for non-poor and non-near-poor farmers and individuals engaged in agricultural production participating in the pilot agricultural insurance.- 20% insurance fee support for agricultural production organizations participating in the pilot agricultural insurance.

Individuals and organizations participating in agricultural production receiving support must meet the following conditions:

- Are eligible for insurance under the following categories:- Implement insurance for rice crops in Nam Dinh, Thai Binh, Nghe An, Ha Tinh, Binh Thuan, An Giang, Dong Thap.- Implement insurance for buffaloes, cows, pigs, and poultry in Bac Ninh, Nghe An, Dong Nai, Vinh Phuc, Hai Phong, Thanh Hoa, Binh Dinh, Binh Duong, and Hanoi.- Implement insurance for aquaculture of tra fish, basa fish, black tiger shrimp, and white-leg shrimp in Ben Tre, Soc Trang, Tra Vinh, Bac Lieu, Ca Mau.- Have insurable interests.- Participate in the pilot agricultural insurance and pay the insurance premiums as per their responsibility.- Engage in production, cultivation, livestock breeding, aquaculture, and disease prevention according to the regulations of the Ministry of Agriculture and Rural Development.

However, as of now, agricultural insurance has only been applied on a pilot basis without specific regulations. Therefore, for agricultural insurance to be effectively implemented in real life, functional sectors need to research and develop a process suitable to actual conditions.

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