Supplementing mechanisms to attract investment in agriculture.

Vietnam has been implementing its agricultural restructuring plan for three years, but the agricultural sector is still facing many difficulties, even experiencing negative growth in the first six months of 2016.

Attracting business investment in this sector remains very limited. This makes it difficult to orient Vietnam's agricultural sector towards a competitive commodity production system. Minister of Agriculture and Rural Development Nguyen Xuan Cuong addressed this issue in a press interview.

Minister Nguyen Xuan Cuong

Sir, for the first time this year, Vietnam's agriculture sector experienced negative growth in the first six months. Could you please explain the reasons for this?

In the first half of 2016, for the first time in many years, agriculture experienced negative GDP growth of 0.18%. Agriculture has always played a crucial role in economic development, with 70% of the population still living in agricultural areas and 46% of the workforce employed in this sector. Therefore, negative growth is a major concern for the entire industry, significantly impacting the lives of farmers, especially in disadvantaged areas.

The reason is that climate change is disrupting all production areas, and its pace is more severe than predicted. Furthermore, Vietnam's deep integration into the global economy gives agricultural products more opportunities to enter the international market, but they must also face fierce competition from global goods. Therefore, the agricultural sector must focus on restructuring towards commodity production and sustainable, concentrated value chains.

After three years of implementing the Restructuring Plan, what changes has the agricultural sector undergone, sir?

After three years of implementing the project, we have achieved some initial, foundational results such as a shift in the awareness of businesses, society, and the people regarding restructuring. This is evidenced by the fact that all 63 provinces and cities have specific projects and action programs.

For example, Lam Dong province has applied high-tech agriculture to 25% of its agricultural land, yielding an average income of 243 million VND/hectare. Dong Thap province has selected five key products: flowers, rice, ducks, fruits, and seafood, focusing its policies and regional planning accordingly. Similarly, Ha Giang, a mountainous and disadvantaged province, has focused on exploiting its advantages such as vegetables, medicinal herbs, and reorganizing livestock production.

In addition, several sectors have undergone restructuring with clear results. The dairy industry has experienced the highest growth in the world over the past five years. In livestock farming, especially pig farming, 4-4.5 million tons of pork are produced annually. Currently, medium and large-scale livestock farming accounts for up to 40%.

However, agricultural restructuring is a process of restructuring production, and therefore requires time. After three years, the general assessment is that restructuring has only progressed in a few good models and some commodity-producing provinces, while the rest of the country needs more drastic restructuring.

Some argue that to restructure agriculture, it is necessary to encourage businesses to invest in agriculture. What is the Minister's opinion on this matter?

To reorganize agricultural production towards modernization, enterprises will be the crucial core, forming the foundation for all linkages in concentrated commodity production. To date, approximately 3,600 enterprises have invested in agriculture out of nearly half a million enterprises in the economy. This represents less than 1% of the total number, with 90% of these agricultural enterprises being small, even micro-sized, and few large, leading enterprises.

Agricultural production needs to be further promoted through various effective policies.

Over the past period, policies and mechanisms have been continuously improved, focusing on encouraging businesses to invest in agriculture. This is especially true with Government Decree 210. However, some obstacles remain, hindering the effective implementation of this policy. For example, Decree 210 applies to all regions, but the development conditions vary across regions, and the policy has not yet adequately addressed these differences. Secondly, the maximum amount of post-investment support is only 2.5 billion VND. Meanwhile, agricultural investment involves significant risks, some sectors require substantial capital, and many localities are already receiving central government budget support, making it difficult for them to allocate sufficient funds for agricultural support. The central government, on the other hand, focuses its support primarily on large-scale investment projects.

Furthermore, some forms of credit or access to land are still inadequate. Therefore, the Prime Minister has assigned the Ministry of Agriculture and Rural Development and relevant ministries to survey, evaluate, and propose further amendments to Decree 210 to make it more practical and encourage businesses to invest in agriculture. In particular, focus should be placed on removing obstacles to land consolidation to enable businesses to engage in large-scale production; and on developing solutions to promote the collective economy, with cooperatives as the main actors.

According to baotintuc