Successive storms that have devastated rice fields across northern Việt Nam have underlined the urgent need for agricultural insurance, which the Ministry of Finance’s Department of Insurance Management and Supervision says offers farmers the strongest safeguard for their work and livelihoods.

In the final days of September and early October 2025, the North and North Central regions were battered by heavy rains and storms, submerging rice fields just as the crops were blooming and nearing harvest.

Thousands of hectares of rice and other crops in provinces including Nghệ An, Hà Tĩnh, Thanh Hóa, Hưng Yên, and Ninh Bình were inundated, leaving farmers empty-handed and burdened with debt after their losses.

As of 6am on October 2, tropical storm Bualoi and its circulation had flooded and destroyed 51,269 hectares of rice and other crops, an increase of 2,655 hectares compared with the previous report, according to the Department of Dyke Management and Natural Disaster Prevention and Control under the Ministry of Agriculture and Environment.

The hardest-hit provinces included Nghệ An with 11,536 hectares affected, Thanh Hóa with 3,844 hectares, and Hà Tĩnh with 1,045 hectares, the department reported.

Unsatisfactory results

Trần Văn Châu, a farmer in Nghệ An Province, said his whole family depended on more than one hectare of rice, but the storm came overnight and everything was lost. Châu said he had only recently heard about agricultural insurance but had not participated.

Similarly, Nguyễn Quang Hưng, a farmer in Hưng Yên Province, said the recent storm destroyed about 80 per cent of his crop, leaving his family with losses of over VNĐ20 million. Without agricultural insurance, they had no choice but to bear the damage.

Hưng said his commune had promoted and encouraged people to take out agricultural insurance, but due to low incomes, most households did not buy it.

Their situations reflect those of many households who either cannot afford the premiums or lack clear information about the benefits and procedures involved in agricultural insurance.

According to the Department of Insurance Management and Supervision 19 out of 32 non-life insurance companies are currently licensed to provide agricultural insurance. Coverage applies to crops such as rice, livestock including buffalo, cows and poultry, as well as aquaculture products like shrimp and tra fish across various provinces and cities.

The department noted that although agricultural insurance was first introduced in Việt Nam in 1982, premiums still make up only a small fraction of non-life insurance revenue. In many localities, just a few per cent of rice cultivation areas are covered, leaving the vast majority of farmers without access to this protection.

Between 2019 and 2024, only four out of 29 localities nationwide implemented agricultural insurance support policies. These were Nghệ An, Hưng Yên and Thái Bình provinces for rice cultivation, and Hà Giang and Bình Định for livestock such as buffaloes and cows.

During this five-year period, 20,261 farming households and production organisations participated in agricultural insurance, of which 17,871 were poor or near-poor households and 2,499 were normal households.

The total insured value reached VNĐ217.3 billion, with total insurance premiums of VNĐ9.47 billion. Of this amount, the State budget provided VNĐ8.02 billion in support.

Reasons behind low uptake

Experts attributed the modest participation of farmers in agricultural insurance to several factors. Insurance premiums remained high compared with farmers’ incomes, while compensation levels were considered insufficient. At the same time, procedures for participation, assessment and payment were often viewed as overly complex.

They also noted that the increasing unpredictability of natural disasters had driven up compensation rates, making insurance companies hesitant and less willing to expand their agricultural insurance products.

According to a representative of Bảo Minh Insurance Corporation the company is currently offering insurance products for livestock, crops, aquaculture and rice against natural disasters. However, this segment contributes only about 1 per cent of its revenue.

The company has acknowledged difficulties in expanding the product, citing the fact that farmers generally lack the habit of purchasing insurance. Many also expect full compensation when losses occur, while in practice insurance does not cover all risks. Lengthy damage assessments and compensation procedures further discourage participation.

To address these challenges, the enterprise is cooperating with multiple partners and adopting new technologies to design products better suited to the Vietnamese market. The company aims to raise agricultural insurance’s contribution to 5 per cent of its total revenue by 2025.

To make the agricultural insurance premium support policy more effective, the Department of Insurance Management and Supervision suggested expanding insurance coverage to include both key national and local agricultural products, broadening the range of risks covered and extending support to more areas nationwide.

It also proposed increasing premium support, particularly for large-scale agricultural production organisations. The department recommended clearer regulations on focal units responsible for sharing data on disaster situations, damage levels and losses, providing a basis for insurers to design products and set premiums more accurately.

In addition, the department emphasised the need to strengthen communication and guidance, helping farmers comply with production processes and meet the conditions required for insurance compensation.  VNS