The Ministry of Agriculture and Rural Development opened two consecutive conferences on agricultural investment in the form of public - private partnership (PPP) in April 2014 alone, showing the high interest of investors in and the good prospects of this investment form.
Cao Duc Phat, Minister of Agriculture and Rural Development, said the results of agricultural PPP projects made him expect a sharp rise in foreign direct investment (FDI) inflows into agriculture in the form of PPP in the near future.
Upgrading Vietnamese agricultural products
He said Vietnam is one of 11 countries in the world to pilot agricultural PPP. As many as 20 leading foreign corporations have invested in agriculture in Vietnam in the form of PPP. Vietnam has established six PPP groups of agriculture: vegetables, fruits, coffee, tea, seafood - the general merchandise, and microfinance groups. All groups are very effectively operated and appreciated by the world.
Tran Vu Hoai, Vice President of External Relations at Unilever Vietnam, a representative of tea PPP group, said, with the PPP model, tea growers and tea processors have been trained of internationally certified farming sustainability. Each year, Unilever buys 30,000-35,000 tonnes of international Rainforest Alliance-certified tea for export. This result has brought Vietnamese tea closer to the "made in Vietnam" tea brand that investors expect to make an echo in the world tea market.
Up to now, businesses joining the tea PPP group reportedly have invested EUR440,000 in training programmes and in production cooperation with over 23,000 farmers in six provinces.
As head of the seafood PPP group, Philippe Bacac, Managing Director of Metro Cash & Carry Vietnam, said Metro, said promising results have also been reported by the seafood PPP group. Metro Cash & Carry Vietnam together with other companies of the group like Cargill and Fresh Studio have successfully built up production chains meeting international standards, which helps Vietnamese seafood products easily penetrate supermarket chains. Each year, more than 4,000 tonnes of seafood products from the PPP projects are estimated to be consumed by supermarkets nationwide.
Thus far, the PPP seafood group has trained more than 2,000 fishermen and 400 merchants in farming techniques, safe medicine and chemical use, packaging and transportation in accordance with certified standards.
FDI flows into agriculture
Given the current serious climate change, PPP is hoped to lure more investment into the agriculture sector as prices of agricultural products will increase and stay high in the years to come. Dr Dang Kim Son, Director of the Institute for Policies and Strategies on Agriculture and Rural Development, said Vietnam has great opportunities to attract FDI into agriculture through PPP projects. This is a door to attract FDI capital into agriculture.
With the participation of initial active factors, once commodity sectors establish value chains, foreign capital will flow more strongly into agriculture. Besides, the Government of Vietnam’s determination for agricultural restructuring will create a significant source of motivation for investors.
Dr Dang Kim Son said agricultural PPP projects have boosted agricultural output by 2-3 times and farmers’ incomes have thus increased 10-15 percent. Traditional farming methods and practices have fundamentally changed to closed models. Agricultural PPP model has successfully connected businesses and farmers. Management agencies have timely and accurately captured practical problems from production realities to build, change and apply management policies.
Tran Kim Long, Deputy Director of International Cooperation Department under the Ministry of Agriculture and Rural Development, said, to continue promoting PPP advantages, good results from PPP projects in big businesses will be studied to apply in different levels and various sectors.
Nguyen Thanh
Vietnamese
