Arrangement of agricultural and forestry companies: Struggling after switching

Currently, the total number of agricultural and forestry companies which switch to operate under the new model has reached over 60%. The remarkable point is that after "changing clothes", the activities of many units are still disordered, while the effect is lackluster and uneven.

Currently, 69 out of 256 companies, including 44 agricultural companies and 25 forestry companies, are making arrangements in 2019. Photo: UyenNhu

The effect is not clear

According to the latest report of the Steering Committee for Enterprise Renewal and Development,as of June 30, 2019, 160 of 256 agricultural and forestry companies have completed their arrangements to switch to operate in accordance with the law with a new model (reaching 62.5%).

After the reorganization and innovation, the production and business activities of the units recorded positive changes. According to the data reported by localities and units, equity in agricultural and forestry companies before arrangement was VND24.8 trillion (on average VND96.89 billion/ company).

Minister of Agriculture and Rural Development Nguyen Xuan Cuong assessed: "After the arrangement, basically resolving bad debts, the equity increased to VND27.84 trillion (on average VND127.1 billion/ company)."

Currently, there is a tendency that many agricultural and forestry companies have linked with investors with potentials in finance, science and technology, and corporate governance to develop hi-tech agriculture.

For example, VinEco Agricultural Development Investment Production Co., Ltd is a member contributing capital to Tam Dao Agricultural and Agriculture Limited Company (Vinh Phuc) and Dong Nai Food Industry Corporation. Particularly in Dong Nai, VinEco Company has contributed VND310 billion, accounting for 77.5% of charter capital.

However, Minister Nguyen Xuan Cuong also said thatthe performance of agricultural and forestry companies after rearranging and innovating is not clear and uniform.

The area of land and assets on the land transferred by the companies to the localities is still small (about 91,419 ha of 462,980 ha) because the properties on the land have not been resolved clearly; land management is still complicated, there are still land disputes and encroachment.

Some localitieshave not yet dealt with the financial shortcomings such as loan capital of Program 327 (some of the policies and objectives in utilization of barren land and hills, alluvial coastal areas and water surface areas), ODA (Son La, Yen Bai), bank loans (Song Hau Farm). Some agro-forestry companies have not been able to access credit capital due to limited financial capacity, unfeasible production and business projects.

Complete the arrangement in 2020

The Steering Committee for Enterprise Renewal and Development saidin the future, we must concentrate resources to complete the restructuring and renewal of agricultural and forestry companies in 2020.

Accordingly, the ministries, branches and localities implemented drastically and synchronously solutions of arrangement, innovation and development, improving the operational efficiency of agricultural and forestry companies; promptly removing difficulties and obstacles according to the functions and tasks of each ministry, branch or locality.

From a local perspective, Mr. Mai Xuan Liem, Vice Chairman of Thanh Hoa Provincial People's Committee, saidagro-forestry companies are assigned to manage large areas of land by the State, but the effective management and use of land are not commensurate with the potential and advantages due to limited financial capacity.

Certificates of land use rights of agro-forestry companies have been issued for a long time, on many types of drawings, based on old maps, so there should be a difference in the data between the certificate and reality, making the work of defining boundaries and setting landmarks difficult. This is one of the basic points to be solved.

Minister Nguyen Xuan Cuongsaid: In the future, agricultural and forestry companies that have completed the arrangement will operate in accordance with the law on enterprises, continue to improve the efficiency of corporate governance, financial capacity, effective production and business. In case the unit continues to restructure, there is a mechanism to give the owner the right to take the initiative in making decisions which are suitable to the actual situation of the locality or unit.

“Besides, in reorganizing and renovating agro-forestry companies, it is necessary to strengthen the inspection, guidance and direction for implementation, especially on land use management, cadastral map, land use right certificate; handling cases of leasing, lending, encroaching, disputes, joint ventures, investment cooperation and handling of violations of the law on land," Minister Nguyen Xuan Cuong said.

By June 30, 2019, 160 of 256 agricultural and forestry companies completed the arrangement and switched to operate under the provisions of the law with a new model (reaching 62.5%). Currently, 69 of 256 companies including 44 agricultural companies and 25 forestry companies are making arrangements in 2019, accounting for 26.95% of the total number of companies to arrange. According to local reports, as of June 30, 2019, 27 of 256 companies had not yet arranged, accounting for 10.54% of the total number of companies that had to be arranged under the Prime Minister's approval.