Paper

New Ways for Rural Finance? Livestock Insurance Schemes in Vietnam

The feasibility of livestock insurance in Vietnam: Analyzing the supply side
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This paper discusses the feasibility of a livestock insurance scheme (LIS) in Vietnam, by analyzing the supply of LIS. The paper analyzes four different types of insurance providers:

  • Insurance tied to credit within a:
    • State owned company,
    • Development project.
  • A state owned insurance company;
  • A private insurance company.

The paper states that:

  • Livestock is an important household income source in Vietnam;
  • Rural financial institutions in the country frequently finance livestock purchase;
  • The absence of off-farm investment possibilities encourages investment into livestock production;
  • Livestock death is, therefore, a main factor contributing to poverty;
  • Farmers using credit to purchase livestock face two risks at once: losing the livestock due to disease, and subsequently, failure of the investment;
  • A formal agricultural insurance market hardly exists in Vietnam and farm households have to rely mainly on informal mutual aid schemes.

The paper finds that:

  • The supply of LIS in the market is low and relates mainly to small-scale schemes or very limited regions;
  • There is no insurer in Vietnam offering an area-wide, sustainable animal insurance scheme;
  • There are two problems plaguing all suppliers of LIS in Vietnam:
    • The limited availability and low reliability of data concerning livestock mortality,
    • The low quality of the public veterinarians.

About this Publication

By Dufhues, T., Lemke, U., Fischer, I.
Published