Livestock insurance and poverty alleviation in developing countries : Pilot study of agricultural insurance in Vietnam

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  • 途上国における家畜保険による貧困削減の可能性 : ベトナムにおける家畜保険パイロット事業を事例に
  • トジョウコク ニ オケル カチク ホケン ニ ヨル ヒンコン サクゲン ノ カノウセイ : ベトナム ニ オケル カチク ホケン パイロット ジギョウ オ ジレイ ニ

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Abstract

Controlling production risk in agriculture is one of the most important factors in stabilizing farmers' income over different time periods. However, financial and insurance markets are not well-developed in developing countries, including rural Vietnam, where opportunistic behavior, such as adverse selection and moral hazard, especially impede the development of a livestock insurance market. In 2011-2013, the government of Vietnam introduced an agricultural insurance system as a trial which the main focus on poverty alleviation. Our survey results indicate that farmers who received insurance payments were able to re-introduce new swine to their production, contributing to poverty alleviation. However, the enrollment rate is quite low among middle-income households, who are assumed to be very knowledgeable about animal production and hygiene technology. Therefore, policy markers and insurance companies will face a trade-off between contribution to temporary poverty alleviation and adverse selection.

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