Spurring enterprises to invest in agriculture

ABO/NDO – Statistics from the Ministry of Agriculture and Rural Development show that merely 1% of the total number of Vietnamese enterprises are investing in the agricultural and rural sectors, with registered capital occupying nearly 3% of the total investment capital in all business sectors. How to encourage enterprises to invest in agriculture remains an unanswered question.

Mushroom production at a company in Thanh Tri, Hanoi.

In three years from 2015-2017, only 23 provinces and cities across Vietnam have attracted 64 projects in the agricultural and rural sectors, with a majority of projects being active projects that are expanding their scale.

One of the reasons for the modest number of agricultural projects is the decreasing financial support from the Government for agricultural projects, which dropped from VND168 billion (US$7.39 million) in 2015 to VND78 billion (US$3.43 million) in 2016 and VND32 billion (US$1.40 million) in 2017.

Despite the negligible number of enterprises investing in the agricultural sector, the total export revenue of agro-forestry and fishery products has risen increasingly from US$30 billion in 2016 to over US$36 billion in 2017. The number is anticipated to reach US$40 billion this year. The positive statistics demonstrate the effectiveness in the expansion of agricultural projects to serve the processing and production of farm produce for export.

However, the legal framework and mechanisms on attracting enterprises in the agricultural and rural sectors have shown many inadequacies with lots of barriers and complicated procedures.

For instance, enterprises that wish to invest in the field of cultivation have to provide their own planning and an environmental impact assessment in addition to applying for a permit for using groundwater for irrigation and permission for waste discharge, among others.

If enterprises want to invest in breeding, they must meet the requirements on waste treatment in accordance with industrial wastewater standards. If they want to expand their operations by growing crops to take advantage of the waste from livestock, they must apply for a permit for planning adjustment, among others.

In addition, there are obstacles related to land acquisition and land accumulation, creating difficulties for enterprises to have a large enough area of land for long-term and large-scale production and business development.

It requires a comprehensive legal framework and mechanisms to attract enterprises to invest in the agricultural sector, which would contribute to enhancing the value of agricultural production. It is also advisable to adopt a law on supporting enterprises investing in the agricultural and rural sectors to settle inadequacies related to land accumulation, land use right and land acquisition.

While the law on supporting enterprise in the agricultural and rural sectors has not yet been developed, the related ministries and localities should broaden the scope of the current regulations and publicise agricultural land use planning, as well as policies related to the development of hi-tech agriculture, organic agriculture, and others, to attract more enterprises who will commit themselves to investing in long-term agricultural production.

At the Government meeting on February 21, Prime Minister Nguyen Xuan Phuc issued an instruction that urged the Ministry of Planning and Investment and the Ministry of Natural Resources and Environment to promptly study and organise seminars to seek measures in order to attract enterprises to invest in the agricultural and rural area and deal with land accumulation to meet the requirements of large-scale agricultural production.

Hopefully, with the efforts and actions of the authorities at all levels, the face of agriculture and rural regions will be improved for sustainable development in the future.

(Source: NDO)