New proposals for agricultural insurance.

Raise the support ceiling, expand the target group.

The Ministry of Finance is drafting a Decree to amend and supplement several articles of Decree 58/2018/ND-CP on agricultural insurance.

According to the draft, the Ministry of Finance proposes amending and supplementing regulations on eligible insurance beneficiaries to expand the scope and increase the level of support. Specifically, individuals engaged in agricultural production who are classified as poor households will receive support covering up to 95% of agricultural insurance premiums, an increase of 5% compared to the current level.

Notably, individual agricultural producers who are not classified as poor or near-poor households – a group previously receiving only 20% support – will see their support level increased to 50%. Meanwhile, agricultural production organizations are proposed to receive 30% support for insurance premiums, a 10% increase compared to before.

This is considered an important adjustment, aimed at encouraging a large number of farmers and businesses to participate in agricultural insurance, instead of focusing mainly on poor and near-poor households as in the past. According to the Ministry of Finance, based on proposals from the People's Committees of provinces and cities, the total estimated support from the state budget is approximately 151.8 billion VND/year.

In addition to increasing the support level, the draft also expands the scope of insured subjects. Besides the three existing groups including crops (rice, rubber, pepper, cashew, coffee, fruit trees, vegetables), livestock (buffaloes, cattle, pigs, poultry), and aquaculture (tiger shrimp, whiteleg shrimp, catfish), the Ministry of Finance proposes adding key crops, livestock, and aquatic products of each locality. This will make the policy more flexible and suitable to the specific production characteristics of each region.

In the context of increasingly severe climate change, complex natural disasters, and epidemics, agricultural production faces numerous risks. Therefore, increasing agricultural insurance support is considered a necessary solution to create leverage for the agricultural and rural sectors. If approved, the new proposals will not only contribute to increasing insurance participation rates but also clearly demonstrate the State's role as a "facilitator" in protecting the livelihoods of millions of farming households.

Proposal for a loan to purchase insurance.

Another notable new point is the proposal to allow credit institutions to provide loans to agricultural producers and individuals to cover the portion of insurance premiums beyond the budget subsidy. The insurance contract could be considered part of the collateral for the loan (if applicable).

According to the Ministry of Finance, this regulation has clear social welfare significance and creates conditions for farmers to avoid financial "barriers" when participating in agricultural insurance. In the context of agricultural production being heavily dependent on weather, diseases, and market fluctuations, having an additional insurance "shield" will help people feel secure in investing and expanding their production scale.

Evaluating the implementation process over the past period, the Ministry of Finance stated that although much experience has been gained from the pilot phase of 2011-2013, agricultural insurance remains a new and complex product. Not only farmers but also the policy implementation staff at the grassroots level are still struggling with its organization and implementation.

Furthermore, some farmers still have limited awareness of the role and significance of agricultural insurance. The mentality of "waiting for support after natural disasters" persists, resulting in low participation rates. In reality, participants are mainly poor and near-poor households – the group receiving the highest level of support; while participation by individuals not in difficult circumstances and production organizations remains quite modest.

From the insurance company's perspective, agricultural insurance is considered a complex and high-risk business due to the unpredictable nature of natural disasters and epidemics. To implement it effectively, businesses must have strong financial capacity, a team of experienced personnel, and a wide distribution network reaching even villages, hamlets, and cooperatives; it also requires the participation of international reinsurers and close cooperation from local authorities.

The Ministry of Finance stated that international experience shows that many countries have insurance premium subsidies equivalent to or higher than Vietnam's. In the US, the government subsidizes about 69% of the premium; Canada 66%; Spain and Japan about 50%... Beyond subsidizing premiums, governments in these countries also implement many accompanying policies such as supporting management costs for insurance companies, accepting reinsurance, or providing free basic disaster productivity insurance contracts for the entire crop area.