For sustainable farm economy development

(Baonghean) - Farm economy contributes significantly to economic growth and development in localities, creating many jobs for rural workers. However, to overcome difficulties and challenges, farm owners need active support from authorities at all levels and the companionship of businesses...

One of the solutions to develop the economy of Thanh Chuong district is to encourage and replicate farm models. After land conversion, the district mobilized households to bid for ineffective land, move livestock farms to the fields and hills to achieve high economic efficiency and not cause environmental pollution; provide loans to buy commercial buffaloes and cows; open technical classes on raising pigs, buffaloes, cows, poultry, aquaculture, intensive cultivation of crops, etc. After 4 years of implementing the farm economic development project, the whole district has 272 farms, 27 farms meet the new criteria, of which 13 farms are granted Farm Economic Certificates. The total value of goods output in 2014 of the farms was 108,304 million VND, an average of 362.2 million VND/year/farm.

Harvesting elephant grass at Mr. Nguyen's farm (Bao Thanh commune, Yen Thanh)

Along with Thanh Chuong, most districts in the province focus on developing farm economy. Up to now, the whole province has 3,185 farms (both according to new and old criteria), of which 420 farms meet the criteria prescribed in Circular 27/2011/TT-BNN dated April 13, 2011 of the Ministry of Agriculture and Rural Development, and have been granted farm economy certificates. The average area is 8.4 hectares/farm and the average output value of goods reaches over 1,052 million VND/year/farm. The number of farms in all fields is increasing rapidly. However, the proportion of farms in the field of crop cultivation tends to decrease sharply, while the number of farms in the fields of livestock, aquaculture, and general farming increases. This trend shows that farmers focus on investing in farm models with high economic efficiency and the ability to quickly recover capital.

However, the current difficulty is that many farm owners are still confused in determining the direction of production and business transformation, product consumption is difficult, unstable, and easily forced by traders, leading to losses or no profit. The association of "4 houses" to support farmers in developing commodity economy has been proposed but has not really come into life. Scientists and businesses have not really joined hands to support farm development, increase competitiveness in the market mechanism... In particular, the majority of farm owners lack capital to invest in expanding production.

Mr. Nguyen Kim Chien's pig farm in Nam Anh, Nam Dan

In Yen Thanh district, the farm of Mr. Nguyen Trong Nguyen's family (in Tay Yen hamlet, Long Thanh commune) is well-known for his bold subcontracting of more than 10 hectares of land along the hillside of Dong Ro in hamlet 1, Bao Thanh commune and Dong Nuong Dua, in hamlet 2, Son Thanh commune, to grow VA06 elephant grass imported for the Australian cattle farm in Nghi Lam commune (Nghi Loc). Mr. Nguyen said that initially he planted nearly 2 hectares of grass seeds and 4.5 hectares of commercial grass, costing about 40 million VND. Currently, the farm is planting 7 hectares of grass in Nghi Van.

The farm provides regular jobs for 7 workers, and during new planting or harvesting times, the family hires 20 more workers. The initial results are promising, but the farm owner is still worried about the difficulties that are arising. Mr. Nguyen said: “The farm has invested and operated effectively for 3 years now, but has not been granted a farm certificate; the farm land is also under a lease contract with the commune. I am currently borrowing 250 million VND from the Central Credit Fund by mortgaging the red book of my family's residential land to buy a truck to transport products. I am planning to expand the grass growing area and raise dairy cows with about 100 cows, but because the leased land does not have a certificate, securing the loan application is difficult. My wish is to be contracted for more land, and the bank has a mechanism to support loans for farm owners according to regulations so that we can boost production...”.

Mr. Pham Van Dung's farm is in Lien Hong hamlet, Thanh Lien, Thanh Chuong

In reality, many farm owners are facing similar situations to Mr. Nguyen's farm. Discussing this issue, Mr. Phan Dinh Thong, Director of the Yen Thanh District Agricultural Bank branch, said: There are currently 175 farms in the area, but only 85 farms have been lent money with a total outstanding debt of VND 7,638 billion. The current difficulty is the small scale of farms and limited efficiency. Unstable agricultural production, risky livestock farming due to epidemics, and difficult product output, so some banks are hesitant to appraise loans. In addition, currently, new farms have been allocated land but have not been granted a Land Use Right Certificate (LURC), and have not been granted a Farm Licence. Meanwhile, if a farm is granted a Licence, it will be eligible for a credit loan according to Decree 41; if it does not have a Farm Licence, it must take out a mortgage loan. We are conducting a survey of the quantity and loan needs of farms in the area to find solutions to help farms meet their development loan needs...”.

Regarding the issue of borrowing capital, the current difficulty for farms is the issuance of land use right certificates and farm certificates. Regarding the issuance of land use right certificates, most farms currently borrow 5% of the reserve land managed by the commune (not the land granted under Decree 64), so they can only rent it, not mortgage it for loans. The leased land is unstable, the term is short (maximum 5 years for the commune level and 30 years for the district level), so it cannot be mortgaged for bank loans, and the farm owner is not really confident to invest in development. Regarding the issue of granting farm certificates, according to regulations, farms must ensure both area and scale. Specifically, according to Circular 27, to meet the economic standards of farms, the following conditions must be satisfied: For cultivation, aquaculture, and integrated production facilities, the area must be 2.1 hectares or more, with a value of output of 700 million VND/year. For livestock farms, the output value of goods must be at least 1 billion VND/year. Therefore, through appraisal in localities, many stable farm models have difficulty meeting the conditions under Circular 27...

Regarding the issue of granting farm certificates, Mr. Hoang Duc An, Deputy Head of the Department of Agriculture of Hung Nguyen district, said: “Currently, Hung Nguyen has 330 households and 47 farms. These farms are being reviewed to grant farm certificates. With a farm certificate, the farm owner will be considered for a loan without collateral of up to 500 million VND (according to Decree No. 41). However, in reality, the conditions stipulated in the Circular are not close to reality. If the Circular is rigidly followed, very few farms will be granted certificates, and as a result, the rights to borrow from banks will also be difficult to meet. According to the leader of the Provincial Agricultural Bank, currently the source of capital for agricultural and rural development loans is abundant, with low interest rates (about 8%/year), but because most farms have not met the standards, when applying for unsecured loans according to Decree 41 at a very low rate, to borrow more, they must borrow with collateral... 2015 is forecast to be a year with many difficulties, the State continues to Continuing to tighten public investment, slow recovery of enterprises, many commercial banks and credit institutions "march" to rural areas, prioritizing capital for investment in production costs, business in the fields of agriculture, forestry, fishery, salt industry, farm economy, family farms, agricultural and rural mechanization. This is a new opportunity for family farms to access capital, expand production and livestock farming.

Prioritizing agricultural and rural development is a major policy of the Party, the State and authorities at all levels. The most important of these is the adjustment of land policies such as the 1993 Land Law, considering households as autonomous economic units, from which households can confidently invest and develop farm economic production. However, in reality, many farms that want to upgrade to farms with land use right certificates encounter many difficulties in expanding area and increasing production and livestock value. One of the feasible directions is that farms can join together to become large farms with sufficient area and income value according to the new standards, thereby continuing to be granted land use right certificates and borrowing capital for development. This requires the joint participation of all levels, sectors and localities to help overcome difficulties so that the farm economy can truly develop and stand firm in a market economy with many unpredictable fluctuations.

Thu Huyen