Reporting on agricultural development in recent years, the Ministry of Agriculture and Rural Development has a positive outlook on the continued growth of agriculture, forestry and fishery. Since 2000, average annual growth in agricultural production value was nearly 5.3 percent while GDP growth was 3.7 percent. Most indicators in fishery, farming and husbandry advanced.
Businesses still fall short of capital
However, according to recent surveys by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) under the Ministry of Agriculture and Rural Development, more than 50 percent of operating capital of agricultural companies is their own fund and accrued profit is only 20 percent while the rest is bank loans.
Dr Dang Kim Son, IPSARD Director, said: When the economy weakened, a lot of agricultural companies used their own money or borrowed from families to do business and this practice was not good. Many companies were thirsty for capital. He pointed out that the very small operating scale in couple with weak project planning capability, limited security assets, poor infrastructure and labour quality is the primary reason for banks to turn away.
Deputy Minister of Agriculture and Rural Development, Bui Ba Bong, added that a lot of existing shortcomings of agriculture and rural area have not been solved, like high poverty rate, underemployment, environmental pollution and widening income gap with urban zones. Meanwhile, the agriculture-driving rural development strategy is no longer appropriate in the current context of slow-healing difficulties like undeveloped infrastructure, asynchronous planning, slowing non-agricultural growth and limited countryside-based loan-shy businesses.
Existing problems in agricultural development need to be resolved, said Mr Bong.
A policy is awaited
Mr Le Minh Tri, Vice Chairman of Ho Chi Minh City’s People’s Committee, said: The Ministry of Agriculture and Rural Development should work with the Ministry of Finance to specify preferences or create best conditions for businesses to invest in the agricultural sector. If policies are too general, localities find it hard to apply. He said Ho Chi Minh City - the largest economic hub in Vietnam, has more than 100,000 companies and just 1 percent of them can make breakthroughs in productivity and quality if they actively invest in agriculture. It is important to change the thinking of enterprises. They should know that profit not only comes from equity or real estate but also from the investment in agriculture and cooperation with localities to do research on export-oriented agriculture - an untapped fertile land.
Mr Ngo Van Giao, President of Southern Seed Corporation, said: The State needs to provide more incentives for infrastructure and capital to attract big companies. According to experience in many countries developing from agriculture, in the early stages of industrialisation, they centrally focused investment on infrastructure, agriculture and rural areas. Even, they sent scientists to rural areas to prepare land planning and discuss with farmers to make best land planning. When they agreed, the Government funded all capital for improving farmland and infield traffic networks.
Better infrastructure will attract more companies. Mr Ho Xuan Hung, former Deputy Minister of Agriculture and Rural Development said the Government plays a very important role in supporting businesses to do business in rural areas. And, it must clearly specify policies.
To become a powerful agricultural country, Vietnam not only needs to increase export turnover but also clarify investment policies to lay the groundwork for sustainable agricultural development.
Nguyen Thanh
Vietnamese
