While the country is waiting for Government approval of a pilotagricultural insurance project, a model of livestock insurance fund inSon La province’s Moc Chau Dairy Cow Breeding JSC (MCDCB) has beensuccessful, helping minimise risks for farmers.

Since starting operations in 2004, the livestock insurance fund now has atotal investment of around 10 billion VND and is directly managed bybreeders. When cows die of objective factors, breeders will berecompensed by the fund immediately.

According toMCDCB General Director Tran Cong Chien, the insurance premium for eachcow is 500,000 VND but when the cow dies, the owner will be paid up to 8million VND.

In addition to livestock insurance,the fund also insures milk price. Dairy breeders only pay an insurancepremium of 50 VND per litre of fresh milk and when milk price drops by25-30 percent compared to the insured price, they will be given 60percent of the reduced price on each litre.

NguyenVan Quang, one of the young billionaires on the Moc Chau Plateau, saidthat insurance for cow and milk price is considered a lifebuoy forbreeders because when facing mishaps, they still have money to buybreeding animals for reproduction. He said that he took out insurancefor his herd of more than 80 cows.

According toHoang Kim Giao, Head of the Husbandry Department under the Ministry ofAgriculture and Rural Development, insurance for livestock and milkprice which has been applied in Moc Chau is the most successfulagricultural insurance model of the Vietnamese husbandry sector so far.

The success is attributable to the close connectionbetween breeders’ interests and the development of the business, hesaid.

Agricultural expert Prof. Nguyen Lan Hungstressed that this model should be expanded nationwide as currently,very few insurers dare to do it because they are afraid of facing lossesas agriculture is an economic sector with a high risk level and biginsurance payments.

Vietnam is also one ofthe ten countries hardest hit by natural disasters in the world andfarmers, who account for 70 percent of the country’s population, are themost vulnerable. A lack of agricultural insurance policies can pushfarmers into poverty.

At present, Vietnam InsuranceCorporation (Bao Viet) and France ’s Groupama Insurance Company havedeployed agricultural insurance policies but with a small scale.Therefore, agricultural insurance premium revenues only account for avery small proportion in these companies’ total non-life insurancepremium revenues.

The Vietnam Bank of Agricultureand Rural Development (Agribank) Insurance Joint Stock Company and theHo Chi Minh City Insurance Joint Stock Corporation (Bao Minh) arespeeding up procedures to join the agricultural insurance market./.