Assessing Opportunities for Agricultural Insurance and Risk Coping Strategies: In Dong Thap, Thai Binh and Vinh Phuc Provinces, Vietnam

Summarizing opportunities and barriers to agricultural insurance in Vietnam.

This report summarizes results of market research to assess the agricultural insurance needs of farmers in Vietnam, leading up to product design. Field research took place in three provinces in the country.

The research found that farm households in Vietnam rely on a number of precautionary strategies to cope with agricultural risks. These included self-insurance and, group based measures. Study findings include:

• Farm households rely on several strategies to cope with losses including efforts to increase household income, borrowing from formal and informal sources, and selling assets;
• Borrowing from formal and informal sources is the most widely used response to agricultural risks;
• Repeated borrowing could lead to selling agricultural land, a very high-risk alternative.

Study findings indicate a need for risk managment products to cover agricultural and life cycle risks. Most households are financially constrained, and have to choose between agricultural insurance and medical insurance. The data suggests that there is an opportunity and a role for agriculture insurance, but households might prioritize other risk management needs, such as health.