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Agriculture needs investment promotion

Released at: 18:04, 29/06/2015

Agriculture needs investment promotion

Support needed to encourage enterprises to invest in agriculture, especially in remote regions, conference told.

by Chu Khoi - Hung Khanh

A conference on bolstering investment from enterprises to the agriculture sector was held on June 28, encouraging businesses to be more active in the process of agricultural reform.

Deputy Prime Minister Hoang Trung Hai chaired the conference, which was attended by representatives from related ministries, local government departments, enterprises, and international organizations.

Minister of Agriculture and Rural Development Cao Duc Phat told the conference that investment in the sector had increased significantly. The number of enterprises doing so rose from 2,397 in 2007 to 3,635 in 2013, an increase of 13.8 per cent per year. State-owned enterprises (SoEs) account for 89 per cent.

He added that the number of enterprises investing in agriculture in 2014 accounted for just 1.01 per cent of all enterprises and most are small businesses. Fifty-five per cent of these businesses have capital of less than VND5 billion ($228,950). In the 2008-2013 period there were only 3,486 enterprises in the sector, while 475 agriculture enterprises closed their doors, or 15 per cent of the total.

Ms. Victoria Kwakwa, the World Bank’s Country Director for Vietnam, said the international experience is that any country who wishes to develop this sector requires guidance from the government. It’s not a matter only for the Ministry of Agriculture and Rural Development, and needs cooperation from other sectors such as Finance, Labor, Transport, and Customs, etc.

Mr. Nguyen Thanh Hung, Deputy Director of the Dong Thap Department of Agriculture and Rural Development in the Mekong Delta said there needs to be incentives for pioneering enterprises and strong agriculture associations created to link with farmers. Regarding credit, he said that despite efforts by the State, enterprises still have many difficulties in raising capital. The central bank should allow farmers to use their farms and facilities as collateral.

In terms of taxation, many companies argued against value added tax (VAT) being levied on fertilizers, animal feed, and agricultural equipment. Enterprises at the conference therefore asked the Ministry of Finance to consider reducing the tax level to 0 per cent.

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