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Not much investment in agriculture

Not much investment in agriculture
Author: Hoai Anh - Hoang Anh
Publish date: Thursday. January 1st, 1970

Attracting a large number of businesses to invest in the agricultural sector will contribute to speeding up the restructuring of the agricultural sector, bringing the development of agriculture in line with its potentiality.

Sturgeon farm in Da Bac district (Hoa Binh) by the lawyer, Mr. Nguyen Trong Cu.

Not getting more than 1%

On the first day of March 2018, the Customs Newspaper's reporter had an opportunity to meet and talk with businessman Nguyen Trong Cu, a well-known person in aquaculture in Vietnam. Mr. Cu shared that as a lawyer - a Vietnamese resident in Germany, 8 years ago he returned to Vietnam and decided to invest in the field of cold water fish. With an initial farm in Sa Pa (Lao Cai), Viet - Duc Investment Trading Co. Ltd., was the first Vietnamese company to produce Siberian sturgeons and Russian sturgeons and established 6 farms of sturgeons and salmons in 4 provinces (Lao Cai, Vinh Phuc, Lam Dong and Hoa Binh). Each year, the farming system of his company produces about 4-5 million fingerlings, the output of sturgeon and salmon reaches 100 tons per year. Creating jobs, bringing new products and improving public health are his goal to make a fortune in investing in this new and very risky field.

Recently, about 30 enterprises of the German Fisheries Association also visited the model of raising sturgeon and salmon in Vietnam. Surprised at the success of the coldwater aquaculture model of Vietnam, the representative of the German Fisheries Association said that this was a favorite product in Germany. However, the climate in Germany is too cold, not favorable for development of this mode of aquaculture. As a result, the production of salmon is not enough to meet the demand. Therefore, German companies may consider investing in this sector in Vietnam. The story of this company shows that even if it is difficult to keep cold water fish in a tropical climate, businesses can still succeed, and there will always be opportunities for enterprises to invest in agriculture in Vietnam.

However, in fact, the number of businesses investing in agriculture in Vietnam is very modest. According to the Minister of Agriculture and Rural Development Nguyen Xuan Cuong, in previous years, the agriculture, forestry and fishery sector had only over 3,000 enterprises, accounting for less than 1% of the total number of enterprises in Vietnam. But in 2017, more than 2,000 businesses invested in agriculture. The number of enterprises investing in agriculture has increased significantly, but compared to the number of enterprises operating in Vietnam, the proportion of enterprises investing in agriculture in Vietnam has yet to get more than 1%.

According to experts, the reason why businesses do not invest much in agriculture comes from many barriers and difficulties when investing, especiallyinadequacies with the issues of limitations. From 2013, the Government issued Decree No. 210/2013 / ND-CP on policies to encourage businesses to invest in agriculture and rural areas. However, the implementation of the Decree is still inadequate due to limited resources, frequent changes in land use in localities, ineffective agricultural insurance policy, making enterprises difficult to access banks, and administrative procedures.

According to agricultural expert Hoang Trong Thuy, at present, 3 difficulties for businesses to invest in agriculture are as follows: difficulty in land usage, environmental difficulty and the value of investment in agriculture isvery high. People generally do not want to rent land because the lease is only short term and can be reclaimed at any time. In the first 3 years, enterprises have to invest in land improvement and in the 7th year, they will begin to breakeven and 3 years later, they start to make profits. Therefore, if the land is rented for less than 10 years, the company will not invest. Costs are high for businesses, and with a large number of lawsuits, they get really "fed up".

Enterprises should be considered as "the center" in agricultural reform

Regarding agricultural development, the development of hi-tech agriculture is a matter of concern of the Government as well as the business community. Being aware of this trend, the Government has many policies to attract investment from enterprises in hi-tech agriculture. However, nowadays, the number of enterprises recognized as high tech application enterprises is still very modest with 25 enterprises. According to Dr. Ly Hoang Tung, Deputy Director of High Technology Department, the Ministry of Science and Technology, high-tech agricultural production requires a large area and long-term use. However, the land is under the use of local people, each household has a small area. Thus, it is difficult for enterprises to accumulate land for production.

According to Mr. Tran Manh Bao, Chairman of Thai Binh Seed Joint Stock Company, in order to develop the agriculture sector, as required by the Central Committee Resolution 5 on private economic development, agricultural development in particular will promote the economy of the country in general. This is a sector facing many risks, and the tax collection of 1% of enterprises is not so much. Thus, the representative of this company wants to attract more businesses by exempting the taxes for businesses, such as VAT for all agricultural products; free export tax for all kinds of agricultural products, and free import tax for all equipment for processing agricultural products. This will create more incentives for businesses to invest. According to expert Hoang Trong Thuy, we should create conditions for businesses to access land.

The business community is considered a key factor to restructure the agricultural sector, so attracting a large number of enterprises to invest in this field will contribute to speeding up its restructuring, sustainable development, commensurate with its potentiality. Attracting businesses and, more importantly, keeping a firm attached to the agricultural sector is a question that needs to be addressed comprehensively and synchronously, not only by the policy system but also by the whole implementation.

In this regard, the Minister of Agriculture and Rural Development said that in order to build businesses trust, the first priority is to focus on administrative reforms so that enterprises can invest in the sector. Along with that, the authorities must closely coordinate with businesses and identify the difficulties to solve, especially for the market. However, not only large enterprises, but more importantly small and medium size enterprises should start to mobilize more because this is the core force, the main force to contribute to the transfer of spontaneous household economy to a commodity-centric economy as well as the value chain.

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