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Economic Sector

Last updated: Friday, January 19, 2018

 

Gap to Fill in Agricultural Land Market Development Policy

Posted: Friday, December 22, 2017


Vietnam has issued a lot of legal documents related to the agricultural land use right market; however, the market has not worked well, failing to benefit the economy. There is a growing gap in the land policy that needs to be filled.

10 million hectares with 70 million plots
According to a study by the Central Institute for Economic Management (CIEM), with the Institute of Land Management Science under the General Department of Land Administration, the Ministry of Natural Resources and Environment, the country has a total area of agricultural land (excluding including forestry land) of more than 10 million hectares, divided into about 70 million land plots and cultivated by nearly 14 million farming households.

The average farming area per household of the nation is 6,603.3 m2, with the largest in Northwest region with 15,872.4 m2 per household, the Central Highlands with 15,002.8 m2 per household, the Northeast with 9,275.4 m2 per household, the Southeast with 8,359.6 m2 per household, the Mekong River Delta with 7,994.9 m2 per household and the lowest in the Northern Delta with 2,440.5 m2 per household. The average ratio of the number land plots per household of the whole country is 3.9; the lowest ratio is in the Southeast (1.6 plots per household) and the Mekong Delta (1.5 plots per household); the highest ratio is 7.1 in the Northwest, and the Northeast is 6.3. Fragmentation and small scale of land lots are major barriers to Vietnam's agricultural development.

Land accumulation barrier
By 2016, the country had 33,500 farms, up 67.2 per cent compared with that of 2011, an average increase of 10 per cent per year. The number of enterprises operating in agriculture also increased sharply with 3,846 enterprises in 2016, up 49 per cent compared to that of 2011. Of which, the number of enterprises with the capital of VND10 billion upward increased to 76.2 per cent. Currently, the demand for agricultural land of entities is changing sharply; small-scale land holders become large-scale land ones. The demand for agricultural land has increased sharply.

However, according to a new study published in early December 2017 of the CIEM, 63 per cent of businesses find it difficult to access land, making it a major barrier for agri-businesses. Regarding land services, approximately 50 per cent of businesses responded "without change" and more than one-third of enterprises "do not know" about land services.

In order to encourage farmers to accumulate land for large-scale production to meet the development requirements of agricultural production and agricultural market development, the Government has encouraged many business forms such as establishment of a farm from the lease of public land and private land, transfer, loan or assignment, inheritance or donation, filling and exchanging plots to develop the household economy, and agricultural cooperative services. However, they lack legal foundation to create the vigorous transfer in agriculture, farmers and rural areas.

According to Land Law 2013, the annual land allocation for each household or individual directly engaged in agricultural production shall not exceed three hectares in the Southeast and Mekong Delta areas, and shall not exceed two hectares in other provinces. The quota allocated for perennial trees for each household or individual shall not exceed 10 hectares in the delta area and not more than 30 hectares in the midland and mountainous areas. With the current policies, both businesses and individuals do not have enough agricultural land for manufacturing and mechanisation, leading to less high-tech agriculture.

Which gap should be filled
In order to increase the flexibility of land use conversion, Dr Tran Kim Chung said that land management has five basic contents including land planning, land lease, recovery, inspection, and supervision. In order to establish a market for agricultural land, there should be regulations in which the land is an asset and a capital asset in society is traded openly and transparently. In addition, there should be land planning stability to expand the market. Especially, the government should pay attention to the purpose of users, recommended Dr Tran Kim Chung.

According to economic experts, the core issue is to soon adjust the regulations that are no longer in line with the Land Law 2013, so as to further perfect the content that is hindering the formation of a land market, such as planning, land allocation, land lease, land use limit and land information infrastructure completion.

Nguyen Thanh








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