Agriculture insurance vital to mitigate risks

Agricultural insurance will not only help farmers cope with natural disasters, storms, floods, epidemics, but also contribute to a new rural development programme, officials said.

Le Duc Thinh, Deputy Director of the Department of Co-operatives and Rural Development under the Ministry of Agriculture and Rural Development, talked about the importance of risk management in agriculture through insurance at a workshop on Thursday.

He also said that the development of public-private partnership was a good way to bring about efficiency for agricultural insurance in Viet Nam. Farmers joining the programme was the most important thing, he said.

Although the agricultural sector has contributed to fighting poverty, improving food security and social stability, it was at risk to natural disasters like floods, droughts and epidemics.

Viet Nam has no clear framework on public-private agricultural insurance and a shortage of independent agencies to implement policies. This is why there are a lot of risks to implementing agricultural insurance, according to Thinh.

Reports from the Ministry of Finance say there are lots of obstacles to implementing agricultural insurance due to a large number of members and extremely wide coverage.

In addition, the claim process is slow. Many shrimp farmers had to wait for almost one year to get insurance payouts. Agricultural production has risks, therefore very few insurance companies invest in this sector.

Bui Thanh Hai, from Insurance supervision Authority under the Ministry of Finance, said 304,017 households and organisations in the agricultural sector had purchased insurance.

The total insured value was estimated at VND7.7 trillion (US$346 million) and the amount of agriculture insurance claim was at VND712 billion ($32 million).

The revenue collecting from insurance fees is about VND394 billion ($17.7 million) annually.

According to the Viet Nam Coffee and Cocoa Association, coffee output reduced by 30 per cent and 17 per cent on export value compared with the same period last year.

The reduction of coffee output was blamed on droughts and cold weather.

If they had agricultural insurance coffee growers who suffered losses would receive full compensation.

Tran Cong Thang, deputy director of the Institute of Policy and Strategy for Agriculture and Rural Development, said the project focused on reviewing the current Vietnamese agricultural insurance situation. Based on analysis, the project would make proposals on strengthening instituational capacities of related agencies on legal framework and design a public-private insurance model to cover weather risks in coffee production in Dak Lak and Lam Dong provinces.

Thang said agricultural insurance hadn't succeeded in the country due to a lack of co-operation between the state, insurance company and farmers.

The project,which began in July 2013 and finished in November this year, is sponsored by Spanish Agency for International Development Cooperation (AECID).

Recognising the importance of insurance to farmers, Thinh said, the Ministry of Finance had proposed the Prime Minister continue the implementation of pilot agriculture insurance programmes for rice and animals at all localities after the project finishes.

Farmers ignore long-term sugar palm value

Agricultural experts are concerned about the sale of thot not or sugar palm (Palmyra) trees in the Cuu Long (Mekong) Delta province of An Giang to landscapers.

Sugar palm trees in the southern province of An Giang. Agricultural experts are concerned about how the sale of the trees will damage the landscape. — Photo: VNS

It takes from 12 to 16 years for sugar palm trees to grow to full height. They can only be harvested after 20 years, but can produce juice for about 55 years, so farmers should keep the trees for long-term economic benefits.

Over the past month, many traders have visited the mountain districts of Tri Ton and Tinh Bien to buy sugar palm trees, Tin tuc (News) reported.

Local authorities said they knew about the situation but faced obstacles in dealing with the trading of sugar palm trees as they were not on the list of the Government's endangered species.

Tran Anh Thu, director of An Giang Province's Agriculture and Rural Development, said about 190 trees had been sold with prices ranging from VND250,000 (US$11) to 500,000 ($22.5) per tree aged from 10 to 20 years.

Inspections revealed that brokers had been negotiating for the purchase of 6,000 sugar palms with heights of between four and six metres. The trees are resold to parks and resorts in northern provinces.

Nguyen Van Hoa, director of the Southern Fruit Research Institute, said sugar palms were a part of the Khmer community.

He said the mass sale of the trees would affect the landscape and culture of the entire region.

Thu, director of An Giang province's Agriculture and Rural Development, said the trees helped eradicate poverty.

Chau Khen, a resident from Tri Ton District's Chau Lang Commune, said although sugar palms did not create high economic benefits, they created a stable income.

With 27 palm trees, his family produced 20kg of palm sugar a day, earning VND320,000 per day, he said.

"Many villagers have sold palm trees after receiving offers from traders, but my family will never sell them", Khen said, adding that the money gained after selling the trees were just enough for his family in three months while the income from palm sugar making lasted from year to year.

An Giang Province now has about 65,000 sugar palm trees, concentrated in Tri Ton and Tinh Bien.

People can also use the leaves to make handicrafts apart from tapping the sap collected from palm flowers.

According to manufacturers in An Giang Province, the quantity of sap collected from the inflorescence of sugar palm trees presently does not meet demand.

This could eventually affect the lives of 5,000 labourers engaged in production. Of these, 75 per cent are of Khmer ethnicity.

Thu said the Agriculture and Rural Development Department proposed the Ministry of Agriculture and Rural Development to include sugar palm trees in the list of endangered species.

Banana growers suffer as prices continue to fall

Many farmers in the central province of Quang Tri are struggling to make ends meet as banana prices fell to their lowest price of the season this week.

Before April, one kilogramme of bananas sold for VND5,000-10,000 (20-40 US cents) – a steady, adequate price for Le Canh Tuan, a banana grower in Bich La Dong Hamlet.

Since April, prices have fallen to VND2,000-3,000 (9-10 cents) per kilogramme, as Chinese traders, a major part of the farmers' incomes, stopped buying bananas, according to the Lao Dong (Labour) newspaper. But prices plunged even lower in the first week of October, to their lowest point to date – VND1,800 (8 cents) per kilogramme.

"Never before has the price of bananas dropped to such an awfully low level," Tuan said. "Nearly half a month ago, bananas were sold so cheap that we had to delay harvesting. But until now, the price hasn't seemed to rise."

Le Hong Khanh owns eight hectares of banana trees in Nai Cuu hamlet, Tan Thanh commune. In recent days, Khanh hasn't been able to sell his crap to local buyers.

"People only buy beautiful bunches of bananas for worship – no one will buy the rest," Khanh said. "If this situation continues, we don't know how we'll earn our living."

Tan Long Market in Huong Hoa District's Tan Long Commune, located on National Road 9, used to draw a large amount of banana traders. But these days, very few traders and trucks carrying bananas gather there.

"In this village alone, about 150ha of bananas are being harvested," said Le Canh Hao, chief of Bich La Dong Hamlet. "On these days, many unsold bananas pile up in heaps. People in this area will be in danger if this situation lasts longer, as all farmers have focused mainly on growing bananas."

Vo Thanh, chairman of Huong Hoa People's Committee, said a factory will eventually start buying all the unsold bananas for processing, but it was still under construction.

"At present, banana sales depend entirely on the Chinese and Thai markets," Thanh said. "Only a few of bananas are sold domestically, so the prices are unpredictable."

Higher taxes

Since Chinese traders no longer bought bananas in Quang Tri, local sellers began to export their produce to Thailand through Laos. Laos had imposed high unofficial taxes on bananas.

Le Thi Thu Dieu, a banana trader, said Laos customs officials asked her to pay VND2.7 million ($121.60) for one tonne of bananas.

"I bought one tonne of bananas from farmers at about VND2 million ($90). If I have to pay VND2.7 million in taxes, how can I make any profit?" Dieu said, adding that she had to stop trading bananas until Laos lowered the tax rate.

Tran Tuan Anh, commander-in-chief of the Lao Bao Border Post, said the post worked on Wednesday with Laos police and authorities on the tax issue. After the meeting, Laos customs officials have started collecting lower taxes from Vietnamese traders. This allowed some Vietnamese traders to reopen their stalls and buy bananas from farmers. But prices remain low, at VND1,700-1,800 (7-8 cents) per kilogramme.

VNS