Minister slams slow pace of agriculture investment

“We are implementing the restructuring of agricultural production in the direction of chains and concentrated form,” Cuong said at a conference held in Hanoi on September 5.

“In such restructuring, the production’s organisational components include business, cooperative and farmers associations as the backbone and nucleus of the chain. However, their integration is only successful if there are leading enterprises and an appropriate system of enterprise organisations and cooperatives,” said Cuong.

Cuong said although a Government decree on encouraging enterprises to invest in agriculture and rural areas became effective in February 2014, fewer than 5,000 enterprises are operating in agro-forestry and fisheries, accounting for less than 1% of enterprises nationwide.

An additional disheartening sign was the 11.3% growth in the number of enterprises that were dissolved during that period, Cuong said.

The scale of agricultural enterprises was mostly small, with 50% having less than 10 employees. Many have weak links with farmers and a limited ability to find and access market information.

According to Minister Cuong, the capacity for science and technology application of enterprises in agriculture, forestry and fishery was also still low, with 75% of enterprises using machinery fully depreciated.

Domestic enterprises, especially small, medium and micro-enterprises were still struggling to replace two to three-generations-old technology.

The mobilisation of external resources for agricultural and rural development was also inadequate, said the minister, adding that social investment in agriculture and rural areas was very low - only about 5.4-5.6% of the total national investment.

Speaking about a revised draft decree on encouraging businesses to invest in agriculture and rural areas, which has been submitted to the Government by the MARD and the Ministry of Planning and Investment, Cuong said during the drafting process, many workshops were held to collect opinions from associations and enterprises, but Deputy Prime Minister Vuong Dinh Hue still required further consultations.

Commenting on the investment environment in agriculture, Duong Van Tri, from Loc Troi Group said the promotion of investment in agriculture needed reforms in land and farm policy.

Provincial authorities should be assigned to establish agricultural land brokerage agencies to promote the transfer and sale of land in rural areas, said Tri.

Loans with preferential interest rates should be offered to agricultural investment enterprises, he said, suggesting 4% interest compared to the current State interest of 8%.

Tri also said the agriculture investment decree had not helped mobilise the participation of all economic sectors, while some of regulations were too complicated for investors.