Economic Sector

Last updated: Wednesday, May 15, 2019


Promoting Business Role in New Countryside Construction

Posted: Wednesday, February 21, 2018

New countryside construction has become a nationwide movement to bring a new look to the countryside. Businesses play an extremely important role in new countryside construction, particularly in carrying out production development projects and income improvement projects for people. Vietnam Business Forum Magazine has a conversation with Mr Nguyen Minh Tien, General Director and Chairman of the Central Coordinating Office for New Countryside. Do Ngoc reports.
Could you brief us on the remarkable achievements of the new countryside construction programme?
With the efforts and determinations of the entire political system from the central to grassroots levels, the new countryside construction has become a vibrant, influential and active movement that engages the community and people across the country. By December 2017, Vietnam had 3,069 communes (34.37 per cent) recognised to have fulfilled new countryside standards, of which 492 communes were recognised to meet the set of national new countryside criteria set for 2016 - 2020 (exceeding the target of having at least 31 per cent of recognised communes in 2017), an increase of 712 communes (7.97 per cent) over the end of 2016. On average, a certified commune met 13.69 criteria. Only 176 communes had less than five criteria, a drop of 81 communes compared to end of 2016. Up to 44 district-level units in 25 centrally-run provinces and cities were recognised to satisfy new countryside construction standards by the Prime Minister, an increase of 13 districts compared to the end of 2016.
Local assessments all over the country show that we have initially addressed existing shortcomings. New countryside results have achieved much progress in quality and content.
The number of companies investing in agriculture and rural areas is still modest. Could you please tell why this is?
By mid-2016, Vietnam had only over 4,000 agricultural enterprises, accounting for less than 1 per cent of the total 420,000 corporate entities in the country, and up to 50 per cent of them were micro-enterprises which had fewer than 10 employees. They lack clear organisational structures, have rudimentary management models and particularly lack business strategies and production plans. In addition, the agricultural and rural technical infrastructure is too weak to meet demand. Agricultural investment is proven to have low profitability and numerous double risks: Natural disaster and epidemic risks and uncertain agricultural product market amid the fact that State support and insurance policies fail to assure investors of opportunities in agriculture and rural areas in relation to other sectors. The income gap between farmers and other classes in society seems to be widening, and not many farmers become entrepreneurs. Moreover, a lot of inappropriate policies or cumbersome administrative procedures impede agricultural enterprises from development.
What do you think about agricultural start-up models in the countryside, and what are strong and practical solutions to attract agricultural and rural development investment from enterprises?
Agricultural investment results in the change in production structure and thinking of agricultural development in many rural areas. Many enterprises create a lot of well-paid jobs for rural workers (e.g. TH Group, Hoang Anh Gia Lai Group, Vinamilk, Lam Son Sugar Corporation and An Giang Plant Protection Company). They have transferred technical advances to farmers, purchased products, actively engaged in developing value chains, added values to agricultural products and increased incomes for farmers. They also played an important role in land accumulation for higher soil performance and trained farmers for more professionalism.
In my opinion, agribusinesses are still trapped by following factors: Unstable planning, unsecure production infrastructure, low-quality rural workers, difficult access to credit sources, and difficult land clearance. To support enterprises to tackle existing problems, Provincial People's Committees must act as arbitrators in land allocations to enterprises, not let them negotiate land purchase prices with farmers because by doing so they have to buy land on the one hand and then hire the land they have bought on the other. Provincial governments also need to provide strong support in basic infrastructure for large-scale agricultural projects and subsidise at least 30 per cent of agricultural insurance for agribusinesses. In addition, start-up businesses will be assisted with trade promotion, science and technology and professional training. Utilising agricultural advantages and incentive and priority policies will bring new opportunities for enterprises and entrepreneurs to invest in agricultural development and new countryside construction in the coming period.
In 2017, the gross domestic product (GDP) of agriculture, forestry and fisheries increased 2.9 per cent. Localities transformed nearly 186,000 hectares of inefficient rice land to growing vegetables, fruit trees and aquaculture. Total agricultural exports set a new record of over US$36 billion, up 13 per cent over 2016. New production forms continued to renovate and enhance the performance. In 2017, Vietnam had 1,955 newly established agricultural enterprises, an increase of 3.8 per cent over 2016. More farms and agricultural cooperatives improved their performance.

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