Few Companies Interested in Agriculture

This issue was presented at the Agribusiness Development Forum and the Announcement Ceremony of Annual Business Report 2014 themed "Agribusiness Development". The forum was held in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Economic Commission of the National Assembly, the Steering Committee for the National Target Programme for New Rural Construction and the Asian Development Bank (ADB).

 

The report said, “The participation of businesses in agriculture sector is now still limited. Only about 1 percent of enterprises operating in Vietnam are engaged in agriculture although a lot of business encouragement policies have been introduced to draw investment capital into this field.”

 

Dr Pham Thi Thu Hang, VCCI General Secretary, said, from the findings of the Annual Vietnam Business Report 2013, themed "Business development and growth quality", about the close connectivity between business development and economic growth quality, the Annual Vietnam Business Report 2014 continues to study this linkage in the agricultural sector. Agriculture plays an important role in ensuring national food security and poverty reduction, generating a good source of forex earning and ensuring political and social stability in Vietnam. However, the agriculture still has a lot of limitations and lags far behind its competitors in the region.

 

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan, Vietnam’s agriculture is still based on household production and low-valued raw production is still the mainstream. In 2014, up to 43 percent of investment capital in the agricultural sector was from State budget. Drawing investment capital into agriculture is difficult, particularly from the private sector.

 

Therefore, he said, businesses are considered one of key factors in the upcoming agricultural restructuring scheme towards increased added value and sustainable development. The involvement of enterprises will help the agricultural sector to better adapt to the market in the context of deeper and wider integration and fierce competition in high quality, food safety, greenhouse emissions reductions and resources saving. Tuan said the Decree on Public-Private Partnership (PPP) Investment, which became effective recently, is opening many opportunities for Vietnam’s economic development, including agricultural and rural fields.

 

VCCI President Vu Tien Loc said despite being an important economic sector, businesses engaged in agriculture, forestry and fisheries account for a very small proportion. According to statistics, the country had 2,397 agribusinesses in 2007 and 3,635 in 2013 but the proportion of agribusinesses in the business community reduced from 1.6 percent to 1 percent in the reviewed period. The number of agricultural companies jumped 787 in 2007 to 1,707 in 2013 (accounting for 47 percent) but fishery companies slowly increased, even suffered a drop in some years.

 

Non-state businesses have gradually affirmed their positions and roles in agro-forestry and fisheries sector. They outnumber State-run enterprises but have fewer workers and assets. FDI companies account for 3 percent of agribusinesses and account for 1.09 percent of total FDI businesses in Vietnam.

 

Thus, Dr Loc said, Vietnam necessarily changes policies to lure more agribusiness investors. It is time to see businesses as a breakthrough factor and motive force for the development of agriculture in the new era and build cooperation programmes to promote agribusiness development.

 

Dr Loc said Vietnam has adopted some good agricultural practice (GAP) models in agricultural field. The expansion of good models is quite important. VCCI is proposing Mai An Tiem Awards in honour of pioneering agribusinesses, presented on the anniversary of Vietnam Entrepreneur's Day (October 13). Hopefully, this will be a source of inspiration to encourage businesses to invest more in this field.