Propose nearly VND9 trillion to support agriculture

With the impact of the Covid-19 pandemic, the Ministry of Planning and Investment proposed a budget of nearly VND9 trillion to support agricultural industry in the next 5 years.

Encrourage enterprises to invest in agriculture and rural areas

The Covid-19  pandemic has a dramatic impact on production and processing of agricultural product while the European Union Vietnam Free Trade Agreement (EVFTA) took effect and created a new playground. According to the Ministry of Planning and Investment, promulgating mechanisms and policies to encourage enterprises to invest in agriculture is necessary.

Medium-term capital delayed

According to the Ministry of Planning and Investment, investment capital of the State budget for medium-term plan in the 2016 -2020 period is more than VND300 billion, allocating for 24 localities.

However, in the process of the annual capital allocation, because the state budget allocated for medium-term plan is inadequate together with the fact that infrastructure construction needs a substantial amount of capital, the State budget assigned to implement Decree 57/2018 on mechanisms, policies to encourage enterprises to invest in agriculture and rural areas is just over VND113.5 billion, allocating for 31 projects in 15 localities with average of VND3.7 billion/project.

"Because the local budgets face challenges  the amount of capital allocated to help businesses  invest in agriculture and rural areas is very small", said the Ministry of Planning and Investment.

In addition, according to the Ministry of Planning and Investment, even if 40 localities promulgated specific policies to assist enterprises, encouraged list of investment projects or assistance quota for investment , none of them issued mechanism and policy to promote land concentration under Decree 57/2018.

"The promulgation of mechanisms and policies to implement Decree 57/2018 is still slow partially due to the fact that the localities do not raise the sense of initiative. Moreover, because the localities have a lot of preferential policies for agriculture and rural development, it's necessary to review these available policies when they develop specific policies for supporting businesses to propose solutions and appropriate assistance for agribusinesses", said the Ministry of Planning and Investment.

Nearly VND9 trillion for five-year period

Considering what happened, the Ministry of Planning and Investment believed that reviewing and amending the shortcomings of the Decree is to fit the new laws issued recently for example the Law on Public Investment 2019, the Law on Public Investment 2020 and Law on Enterprises 2020.

In addition, the development of a new decree to replace Decree No.57/2018 is necessary to promptly respond to newly emerging issues and big factors affecting agricultural production and business. For example, domestic pork price skyrocketed, the Covid-19 pandemic drastically affected  agricultural production and processing and the European Union Vietnam Free Trade Agreement (EVFTA) took effect, etc.

According to statistics of the Ministry of Planning and Investment, the demand for investment capital in the 2021-2025 period is VND107 trillion of which State budget investment capital is estimated at VN8.6 trillion (8%) to carry out 800 projects.

It's estimated that if VND1 trillion from State budget was spent  with VND10 billion per project (nearly 3 times higher than present), there will be 100 projects per year. So, with the estimate that the maximum assistance rate from State budget in this period is 10% it will attract  around VND9 trillion from enterprises investing in agriculture and rural areas.

The Ministry of Planning and Investment expects that the aid from State budget will result in benefits in terms of economy, society and environment. In which assuming that about 100 agricultures businesses are established annually and each investment project has a size of nearly VND100 billion it will create at least 10,000 direct jobs and 30,000 indirect ones.

At the same time, it will contribute to expanding stable market for consumption of agricultural products in the areas the projects are conducted; thereby raising the efficiency of investment capital of the State budget allocated for agriculture and rural areas and speeding agricultural transformation and restructuring. 

Supporting businesses in focusing on sectors entitled to investment incentives, especially investment in agriculture including cultivation, processing agricultural, forestry and fishery products, planting and protecting forests, salt production, fishing and fishery logistic services, production of seeds, breeds and biotechnology products.