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Many enterprises investing in agricultural desire loan interest rate of 5% per year. Photo: Nguyen Thanh.

Encouraging "Motive force"

TH Group is one of the "giants" actively investing in the agricultural sector in recent years, particularly in the dairy sector. According to Ms. Thai Huong, Group Chairman, in recent times, the Vietnamese dairy industry has had a big change, from importing up to 92% in 2008, to only imported nearly 70% so far. To attract enterprises to invest in agriculture, the government has had many policies, however, ministries have not shown the synchronization, closely linked in enforcement, without highlighting priorities for enterprises. In fact, what enterprises want is that the policy which is related to the agricultural sector should be brought into unity, for the Ministry of Agriculture and Rural Development (MARD) to "conduct" enterprises to only work directly with MARD without scurrying around to other Ministries.

Deliberating deeper to the policy of supporting enterprises, according to Ms Huong, the State should choose key products to develop practical support policies. In those policies, should insist on priorities and clear incentives for enterprises which have the meaning of leading "Motive force". "TH can be considered as one of the leading investment firms in the dairy sector, but still lack practical support. Even when building material areas, wanting an entry, TH have to actively spend their own money to fully invest in new roads to go though even it is still dirt and muddy. If there are particular policies that encourage enterprises such as TH, I believe we will attract more investment and development from enterprises in agriculture, "said Ms. Thai Huong.

Related to this issue, Mr. Tran Manh Bao, General Director of the Pacific plant varieties company said that, many management policies related to agriculture are now overlapping, in association with various ministries and industries. It is also one of the factors that makes enterprises hesitant to invest in agriculture. On the issues of dealing with investment firms in the field of agriculture and rural development, agreeing with Ms. Thai Huong, MrBao also said that, current policies are being "equal". A company that has operated and invested in the agricultural sector for decades can be treated the same as a newly established enterprise. "In fact, it needs a different behaviour for each group of enterprises, which give priority and encouragement to many large enterprises who have the ability to lead the industry as well as other enterprises to jointly develop" said Mr. Bao.

Having separate credit policy

During that time, one of the entanglement issues of enterprises when investing in the agricultural sector is still access to bank loans, especially for small and medium enterprises.

Mr. Tran Manh Bao said that, although there are many large enterprises actively investing in agriculture, however they are only large enterprises, small and medium enterprises cannot afford to develop Vietnamese agriculture. Meanwhile, small businesses, especially start-up companies with low capital have higher loan demands. "Business in agriculture is characterized by slow capital turnover. Wanting an actual attraction and support for enterprises, we need to build a separate credit policy for this sector, different from the common credit policy. Especially, in the case of companies meeting difficulties, that cannot repay loans at maturity, banks also need to be flexible to apply a grace-period policy , to be a companion with enterprises ", Mr. Bao stressed.

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Dong Giao Food Export JSC specializes in cultivating, processing, importing and exporting vegetables. Mr Cao Dinh Khue, General Director of the Company said: Currently, we are borrowing capital from banks with an interest rate of 8-10% / year. The enterprises operating in the fields of agriculture products processing often depend heavily on natural elements, on the other hand the investment in machinery, equipment and other resources of agricultural enterprises is also relatively large, meanwhile profit from agricultural production is not really attractive. Therefore, according to Mr. Khue, the State should have preferential policies for agricultural products processing enterprises when investing in building plant, purchasing machinery and equipment or developing plant varieties with low interest rates loans of about 5%, and the time for the minimum investment loan for 12 years, at the same time open up and create conditions for agriculture products processing enterprises to access unsecured loans mechanism. In addition, Mr. Khue also recommended that the State should research and support agricultural encouragement policies through agriculture product and trading enterprises. "When enterprises use their capital to invest in materials that also forces enterprises to calculate, to work methodically to make sure production is efficient. Therefore, supporting agricultural encouragement through enterprises will bring practical results and higher promoting production, rather than directly supporting farmers, "said Mr. Khue.