PPP Model in Agriculture Is Essential

According to Minister of Agriculture and Rural Development Cao Duc Phat, in the new development phase of the economy and of the agricultural sector, the partnership of the government, key producers and enterprises is really necessary. The enterprises are the most dynamic actors in the partnership, and they are only catalyst to solve three biggest bottlenecks of current agriculture of Vietnam. The large capital enterprises can increase investment for large-scale and agriculture; the dynamic enterprises help capture the market to sell agricultural commodities in domestic and international markets; the enterprises with high potentials in applications of science and technology, especially during the processes of manufacturing and processing to enhance the added values and increase the competitiveness of agricultural products.

 

Even though the agricultural restructuring project has been approved by the government, the financing of the project still needs more solutions and engagement of ministries and local provinces to boost investment activities in agriculture. The World Bank pointed out that Vietnam needs to have a focal point to assist and connect investors and businesses in agricultural sectors with MARD, other ministries and localities with potential for agricultural development. Specifically, the World Bank experts also pointed out that the current rate of enterprises engaged in the agricultural sector in Vietnam is still too low, only about 3-4 percent. And the rate for the FDI companies is even lower. And the reason should be analysed based on many respects. Many policies to attract private investment that been issued have not been accessible to the businesses. Many potential domestic and foreign investors expressed interests in the agricultural sector, but have yet to select the appropriate business practices. Many companies are willing to invest in agricultural sector but facing difficulty in establishing the stable raw production materials.

 

Supporting this partnership, Director of Institute of Policy and Strategy for Agriculture and Rural Development of Ministry of Agriculture and Rural Development Dang Kim Son highlighted that the authorities must recognise the role and position of the company in the agricultural sector during the development of the agriculture. The enterprises will invest private capital into the sector and open the door to the application of technology, high technology to improve productivity for crops and livestock. And the PPP model is a indispensable form of investment.

 

According to Mr Son, Vietnam should be either a garden or a kitchen corner of the world. And this role reflects the identity of Vietnam. The restructuring of the agricultural sector is to create opportunities for the whole economy for more effective yielding.

 

And in recent years, there have been more and more enterprises successfully investing in agriculture; they are Minh Phu, An Giang Plant Protection, Binh Dien, and TH Truemilk and all of the investors agree that, the the agricultural products of Vietnam have been recognised in the foreign markets; some products with high value exports include rice, shrimp, catfish, which help Vietnamese products promote positions on the world map of agriculture. However, what Vietnamese enterprises need is a formal and long-term investment strategy to strengthen their capacity to compete with other agricultural rivals in the world.

 

Large corporations like Viettel, Vingroup, and FPT are willing to invest in agriculture based on their potentials and strength. The important thing here is that the government and the agencies should have same awareness of agriculture that is the advantage of Vietnam and should be invested as a general trend of the world. Therefore, the Government should be determined to make successful restructuring of the agricultural sector. As such, the PPP model will be the key to open the door to attract FDI into the sector.

 

According to Dang Kim Son, the capital has not been flown to the agricultural sector because the agricultural model of Vietnam has not been refoemd and the Decree on PPP has not officially issued. But it does not exclude the possibility that when the industry has established the value chain, the capital will flow into stronger. But if we immediately develop the PPP model, the farmers will change their processes and production techniques, and connect the businesses with the farmers. This also helps the Ministry of Agriculture and Rural Development as the direct management agency capture the actual problems more timely and accurately to build, modify and apply appropriate management policies to attract capital flows in the agricultural sector.