Why are Nghe An farmers not interested in agricultural insurance?

After a series of severe natural disasters, the role of agricultural insurance (AH) has become increasingly important and necessary. However, although it is expected to be a "financial shield" to help farmers feel secure in production, after many years of pilot implementation and application according to the Government's policy, the implementation still has many problems and has not achieved the desired coverage.

Still many "barriers"

Although her family owns 2 sao of rice fields, Ms. Vu Thi Lan Anh in Dinh Phung hamlet, Yen Thanh commune has never had any intention of buying agricultural insurance. “Previously, the commune and hamlet had implemented it, but I did not buy it because I was not eligible for State support, while the regulations to be able to enjoy insurance were not suitable for production reality,” Ms. Lan Anh shared.

Implementing the pilot program of agricultural insurance according to the Government's policy, Nghe An is one of the localities chosen to participate early. With the policy of supporting agricultural insurance fees from the state budget, the program has achieved positive results: In the 3 years of piloting (from 2011-2013), 6 old districts participating are Yen Thanh, Dien Chau and Quynh Luu (participating in rice crop insurance); Do Luong, Thanh Chuong and Tuong Duong (insurance for buffalo, cows and pigs), people have received 8,394 billion VND in insurance money, of which rice crop insurance is 5,994 billion VND. Timely payment and compensation have created conditions for households to proactively and quickly restore production, stabilize their lives, and at the same time raise awareness of the necessity of agricultural insurance in production.

Due to the impact of storm No. 10, Kim Lien commune lost nearly 2,000 hectares of summer-autumn rice. Photo: Phu Huong

Despite the support policies and great practical demand, agricultural insurance in Nghe An is still limited in both scope and access, the rate of farmers participating in agricultural insurance is low and not sustainable, even after participating in the pilot, people have "turned their backs" on this type of insurance.

In fact, many people are still accustomed to waiting for support from the State when there is a risk, and do not consider agricultural insurance as a compulsory financial risk management tool. Although the premium is supported, the remaining insurance premium for poor and near-poor households with small-scale production and low income is still a burden. Meanwhile, production is still fragmented, small-scale, and does not follow standard procedures, making it difficult to assess and determine insurance premiums.

Destroying pigs infected with African swine fever in Tan Phu commune. Photo: Xuan Hoang

One of the biggest "barriers" affecting the implementation of agricultural insurance is that many regulations are still not suitable for reality. According to Mr. Nguyen Van Duong - Chairman of Yen Thanh Commune People's Committee: Implementing agricultural insurance for rice as before is very difficult to implement. Rice cultivation is not profitable, while the calculation method, calculation level, and basis for receiving insurance when damage occurs are not suitable and not close to reality. Previously, when Yen Thanh district (old) participated in agricultural insurance for rice, many people participated but still did not receive support due to "own crop failure", causing frustration among the people and making it very difficult to replicate.

Farmers in Quang Chau commune harvest rice affected by storm No. 5. Photo: Phu Huong

Sharing the same view, Mr. Tran Manh Hong - Economic Department, Kim Lien Commune People's Committee said: Storm No. 10 has caused nearly 2,000 hectares of rice in the commune to be completely lost, natural disasters have occurred frequently in recent years, but if agricultural insurance is still implemented as before, it will be very difficult to attract farmers. There needs to be the participation of cooperatives, cooperative groups, hamlets... to act as extended arms. Regulations on damage statistics, basis, level and method of compensation also need to be amended to suit production reality, ensuring that farmers receive appropriate insurance when damage occurs, then people will be enthusiastic to participate.

Meanwhile, businesses are not interested in agricultural insurance. According to the leader of Bao Viet Nghe An Company - the unit implementing agricultural insurance in Nghe An, the expansion is very difficult because the subjects receiving State insurance premium support are poor households, near-poor households, have very little land, and poor service conditions and investment in production.

Meanwhile, most farmers do not have the habit and awareness of buying insurance when there is little or no fee support from the State. In fact, after 3 years of piloting, Nghe An continued to implement agricultural insurance according to the support in Decree No. 58/2018/ND-CP but only implemented a few production seasons and then stopped until now.

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People must consider agricultural production as well as other types of production - all need to be protected, risk prevented, and from there, have the awareness to participate in insurance. Only then will the State's policies be effective and agricultural insurance can be implemented.

Leaders of Bao Viet Nghe An Company

To develop agricultural insurance

To encourage the development of agricultural insurance, the State has a policy to support agricultural insurance premiums. According to Article 4, Decision 13/2022/QD-TTg dated May 9, 2022, the level of support for agricultural insurance premiums is as follows: Individuals engaged in agricultural production who are poor or near-poor households are supported with a maximum of 90% of agricultural insurance premiums; individuals engaged in agricultural production who are not poor or near-poor households are supported with a maximum of 20% of agricultural insurance premiums.

Agricultural production organizations are supported with a maximum of 20% of agricultural insurance premiums when fully meeting the following regulations: Being an enterprise established under the Law on Enterprises or a cooperative established under the Law on Cooperatives; having a contract associated with agricultural products that are beneficiaries of agricultural insurance support policies; having agricultural products that are beneficiaries of agricultural insurance support policies that are certified to ensure quality and food safety by competent authorities or recognized as high-tech agricultural enterprises.

Nghe An is a province that receives State support for agricultural insurance fees for rice, buffalo, cows and pigs, with the support period ending on December 31, 2025. However, this policy has not yet been truly effective.

Nghe An provincial leaders inspect the destruction of diseased livestock in Dien Chau commune. Photo: Phu Huong

A representative of the Department of Economic Cooperation and Rural Development - Ministry of Agriculture and Environment said that the reason why agricultural insurance has not really come into life is because the compensation settlement is still slow, the complicated procedures make it difficult for farmers. Meanwhile, income from agriculture is still low, consumption is unstable, so people do not want to spend an initial amount of money to buy insurance.

Ms. Dinh Thi Trang - Head of the Economic Department of Quang Chau commune shared: Although there is a policy to support the recovery of production damaged by natural disasters and epidemics, that support policy is not enough, especially for the livestock industry that requires large investments. Meanwhile, the support money is distributed very slowly, for example, in 2025, Quang Chau commune was just granted money to pay for the support source for the damage caused by African swine fever that occurred from 2022. With a total herd of more than 2,000 pigs, from June 2025 to now, the commune has had to destroy more than 9 tons of pigs due to the epidemic. Therefore, agricultural insurance in livestock farming is extremely necessary, and if the policy is implemented appropriately, it will have a great effect in helping people quickly restore herds and develop livestock farming.

Empty pig pens of people in Quang Chau commune after African swine fever outbreak. Photo: Phu Huong

Storm No. 10 caused Phu Thinh Agricultural and Service Cooperative (Lam Thanh Commune) to suffer over 200 million VND in damage. The ^2,500m2 greenhouse system collapsed completely, with repair costs reaching nearly 140 million VND.

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If Agricultural Insurance expands its scope, costs and coverage levels appropriately, the Cooperative is ready to participate to feel secure in developing production.

Mr. Nguyen Van Son - Director of Phu Thinh Agricultural and Service Cooperative

The greenhouse system worth hundreds of millions of dong of Phu Thinh Agricultural and Service Cooperative (Lam Thanh commune) collapsed and was devastated after storm No. 10. Photo: Phu Huong

Agricultural insurance policy is an inevitable trend of modern agriculture. Removing current obstacles will pave the way for agricultural insurance to develop, thereby contributing to ensuring the livelihoods of hundreds of thousands of farming households in the face of unpredictable fluctuations of natural disasters and epidemics. The State needs to have preferential mechanisms for implementing agricultural insurance through cooperatives and cooperative groups; support training and communication costs and have mechanisms for these organizations to act as intermediaries in all stages from insurance provision, insurance premium collection coordination, damage compensation... combining agricultural insurance with credit, agricultural extension and digital transformation of agricultural cooperatives.

On the producer side, it is necessary to consider agricultural insurance as an important tool in risk management, livelihood protection, production stabilization, reducing dependence on State support, thereby attracting investment in production and business and promoting sustainable production.

Faced with the shortcomings of the Social Insurance, in order to carry out the tasks assigned by the Government in Resolution No. 26/NQ-CP dated February 27, 2023, the Ministry of Finance is studying the amendments and supplements to Decree No. 58/2018/ND-CP and will soon have a document to solicit public comments. On that basis, the decree amending Decree No. 58/2018/ND-CP is expected to be submitted to the Government for promulgation in 2025.

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