Vietnamese enterprises keen on investing in agriculture

Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến

The Vietnamese Government has issued a series of incentive policies aimed at promoting private investment in agriculture. Decree No 57/2018/NĐ-CP, implemented in 2018, was the most recent initiative which was designed to support the development of emerging agricultural enterprises. However, the implementation of this policy still faces many shortcomings.

Currently, the Ministry of Planning and Investment is presiding over the development of a new decree which will replace Decree 57 to make the policy more practical and consistent with other laws such as the Law on Public Investment, the Law on Investment and Enterprise Law. Vietnam News Agency talked to Deputy Minister of Agriculture and Rural Development Phùng Đức Tiến about the new draft decree.

What is behind the recent trend of Vietnamese enterprises investing in the agricultural sector?

Together with many incentive policies to encourage investment in agriculture, rural areas and improve the capacity of the supporting industry, some large economic groups have recently focused on investing in the agricultural product processing sector.

In 2021, there were six projects with a total investment of over VNĐ5 trillion (US$217.4 million) inaugurated and put into operation. This has created a breakthrough in the export processing industry, helping enterprises improve the quality, design and diversity of agricultural products and increasing the consumption of products for farmers.

The growth of enterprises determines the competitiveness of each industry or sector. The force of agricultural enterprises is growing stronger and they are increasingly keen on investing in agriculture and rural areas, becoming the core force in the agriculture value chain.

In 2021, 1,640 agricultural businesses were established and resumed operation, lifting the total firms operating in agriculture to 14,400. Besides the investment and development of small and medium-sized businesses, big enterprises continue to grow their investment in this sector, particularly in high-tech agriculture such as C.P. Vietnam, TH Group, Dabaco Vietnam, Masan, Lavifood and Doveco.

In animal husbandry, many domestic enterprises and foreign-invested ones have increased investment in production and processing on a large scale, employing high technology, closed chain and deep processing such as C.P. Vietnam investing in a complex worth $250 million in Bình Phước Province with a target of 45 per cent of its products being exported to Japan, it also built a cattle slaughtering factory in Hà Nội; or Masan constructing two chilled meat processing complexes in Hà Nam and Vĩnh Long provinces.

The Ministry of Planning and Investment is currently building a new decree to replace Decree No 57/2018/NĐ-CP. What should be noted in this new draft decree?

Prior to Decree 57 was Decree No 210/2013/NĐ-CP. During implementation, both decrees demonstrated limitations. For example, the support for importing original varieties, land or other important contents have not been practical.

The country has more than 800,000 enterprises but the number of agricultural enterprises is only over 14,400. Among 14,400 enterprises, 7,500 are processing enterprises but the procedures for land, priorities and incentives do not yet have enough resources. The amount of investment in agriculture is also inadequate while the industry needs to change to an agricultural economy. This requires many enterprises, especially large enterprises, to produce in chains and develop areas of raw materials associated with processing and markets. Therefore, we must review all issues and institutions related to agricultural investment.

Actual implementation has shown that organisational resources are very important. At the National Assembly sessions, the deputies raised opinions on the formulation of laws, ordinances and policies that must take into account resources for implementation. For example, the Hồ Chí Minh road project has had a lot of resolutions but has yet to get enough resources for completion.

This time, the new decree needs to clearly assign the responsibilities of ministries and local agencies in implementation. With the orientation of updating to suit reality and having enough resources for implementation, the assignment of responsibilities will be the decisive factor in successfully attracting investment in agriculture.

Agriculture is the premise for industrialisation and modernisation of the country, making an important contribution to the stability of the country. In difficult times, agriculture has really been the “support pillar” of the economy. Especially during the COVID-19 pandemic and the Russia-Ukraine conflict, the Food and Agriculture Organisation of the United Nations (FAO) has warned more than one billion people will go hungry, but Việt Nam still has an abundant food source. From that awareness, ministries, branches and localities will accommodate resources and give incentives to the development of the agriculture sector.

Besides private businesses, how should cooperatives and farms be encouraged to invest in sustainable agriculture?

We have an agricultural ecosystem with 14,400 businesses, over 19,100 cooperatives and 78 unions of agricultural cooperatives, over 30,000 agricultural production groups and over 19,600 farms according to new criteria for production, processing and consumption of agricultural products associated with farmers. Up to now, effective production methods in cooperatives are one of the solutions and important links for the comprehensive development of agro-ecology.

Besides businesses, cooperatives, farms and especially nearly 10 million farming households have been transferred technical advances in production from businesses, including FDI enterprises and research institutes, developing production in compliance with the standards and regulations of the markets.

The Ministry of Agriculture and Rural Development is developing and submitting to the Government a resolution on the development of agricultural cooperatives in line with the agricultural restructuring plan and new rural areas development; a decree on incentive policies to encourage the economic development of farms and the formation of cooperative groups and farms associated with enterprises in production, processing and consumption, developing large-scale production.

This year, the ministry has also implemented measures to improve the business environment and support businesses, especially in the fields of high-tech agriculture, digital, clean and organic agriculture to enhance productivity and national competitiveness. The industry strives to establish 2,000 new businesses this year.

It is expected that by the end of 2022, the whole country will have 21,000 agricultural cooperatives, over 2,300 cooperatives applying high technology and over 20,500 farms according to the new criteria. — – VnExpress News