11:27:47 PM | 21/8/2008
Production premises, human resource and market are the three major shortcomings hindering the flow of foreign direct investment in Vietnam agriculture and rural area, the Investment reported, quoting an expert from the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).
At a recent workshop on Opportunities in investing in agriculture and rural area in Hanoi, Dr. Le The Hoang said the biggest difficulty faced by companies involving in agriculture is production premises because almost all of land at favorable situation is dedicated to industrial projects.
“Agricultural companies with low investment capital and small scale can not afford rent good premises,” Vu Quoc Tuan, chairman of the Vietnam Craft Village Association said.
Meanwhile, an abundant workforce but low quality is also a shortcoming, discouraging agricultural companies to boost technology application, participants at the workshop agreed.
The modest investment in agriculture and rural areas was also attributed by unstable markets, causing many difficulties to the companies in keeping material areas. Many companies failed to set up a close relationship with local farmers to ensure sufficient input because the farmers usually chop down trees when prices drop.
To attract more investment, the participants said the State should adopt more special incentives, including simplifying licensing, land allocating, and tardy project site clearance procedures.
But the participants confirmed that there are still huge investment opportunities in the agriculture and rural sector despite its poor infrastructure facilities.
Many localities boast good farmland that is adaptive with agricultural and industrial crops of high economic values.
Vietnam’s abundant workforce, low labor costs, and growing demands for agricultural products are factors that promise to bring big benefits to investors, the participants said.
However, participants pointed out a fact that the flow of foreign direct investment (FDI) in the area remains modest. In the first seven months of 2008, only US$34.3 million were registered for 18 projects in agriculture, forestry and fishery sector, making up 0.77 per cent and 2.75 per cent of the country’s total, respectively.
As of January 1, 2007, Vietnam had 39,414 companies in agriculture and rural area, accounting for 30 per cent of the country’s total company number.
Total laborers in the sector were 2.1 million, accounting for 31.2 per cent of total workforce in the companies. (Local sources)
Vietnamese
