Financing tools remain overly complex and out of reach for smallholder farmers, highlighting the urgent need for solutions that are both inclusive and scalable, said leaders at Vietnam’s Cooperative Day on April 8.
Deputy Minister of Agriculture and Environment Vo Van Hung said the region’s agriculture sector was facing a transition period marked by climate change, natural disaster risks, market volatility, and increasingly stringent standards.
Against this backdrop, fragmented policies are no longer adequate. Climate risk financing has become essential to protecting farmers’ livelihoods and building climate-resilient production models.
Pham Quang Minh, head of the Agriculture and Forestry Division at the ASEAN Secretariat stressed that agriculture has remained a cornerstone of the ASEAN economies, contributing to rural livelihoods and food security.
Deputy minister Vo called for a systemic, integrated approach built on closely linked pillars.
“Tools such as agricultural insurance, credit, green finance and climate data need to be designed in a synchronised policy ecosystem,” he said.
Pham added that achieving this would require cross-sectoral and regional approach and stressed that it could not be done in isolation.
Ongoing challenge
Pham highlighted that several initiatives Pilot models in Indonesia, Thailand and Vietnam have shown initial effectiveness with the participation of private sector actors and financial institutions.
This has included agricultural insurance and parametric insurance.
However, he acknowledged that building an effective agricultural finance system capable of responding to climate risk remains an ongoing challenge.
Pham called for close coordination among multiple ministries, particularly between agriculture and finance.
ASEAN intends to expand work on insurance and reinsurance while promoting data, technology and risk‑management knowledge sharing among member states.
Jens Schmid-Kreye, First Secretary for Development Cooperation at the German Embassy in Vietnam observed that many financial products were too complex and inaccessible for smallholders.
He pointed out that agriculture contributes 10 to 12 per cent of ASEAN’s GDP and supports more than 100 million livelihoods, yet faces escalating climate impacts from floods, droughts and sea‑level rise.
He emphasised the need to develop solutions that were inclusive, accessible and scalable.
Schmid-Kreye highlighted the role of cooperatives in helping farmers access finance, reduce transaction costs and improve the adoption of risk management tools.
Drawing on Germany’s experience in cooperative development, he affirmed readiness to support capacity‑building efforts in the region.
