Effectiveness of credit policy

(Baonghean) -Recently, thanks to the implementation of agricultural mechanization support policies of the Government and Nghe An province, thousands of farming households in the province have been able to borrow capital through the Agricultural Bank to buy machinery and equipment to serve agricultural and rural development, increase crop productivity, and expand specialized commodity cultivation areas.

In the late 1990s, Nghe An Agricultural Bank began lending to farmers to buy machinery to gradually mechanize agriculture. But lending was only really promoted when the Provincial People's Committee issued Decision No. 5005/QD-UB.NN dated December 12, 1998 on the policy of supporting loans to buy multi-functional small tractors. Accordingly, farmers were allowed to borrow 2/3 of the value of multi-functional small tractors and were supported with interest rates for 3 years... And later decisions on support policies for farmers to buy machinery, as well as in 2009, when the Prime Minister issued Decision No. 497/QD-TTg "on supporting interest rates on loans to buy machinery, equipment, materials for agricultural production and materials for building houses in rural areas". Nghe An Agricultural Bank has implemented capital investment according to the above decisions, directed and guided grassroots banks to prioritize the allocation of sufficient capital to meet the credit investment needs of rural agricultural subjects according to the decisions of the province and the Government. At the same time, regularly inspect and promptly resolve difficulties, ensure loans are made in accordance with business procedures, and ensure the right subjects are entitled to the interest rate support loan policy...

Mr. Phan Duc Tien - Deputy Director of the Provincial Agricultural Bank, said: In the first years of implementing unsecured loans according to the agricultural machinery support policy of 10 million VND, the loans were partially unsecured, so the bank could not help but worry. Moreover, at that time, the fields were still too small and fragmented, limiting investment in machinery for production. The mentality of a part of farmers still wanted to cultivate the land themselves to reduce the cost of renting plowing and harrowing the land. If they bought machines that were not used effectively, they would incur overdue debts, which would be difficult to collect... However, with the belief in the will of the borrowers to buy machines to get rich and the simple farmers' awareness of repaying debts, the bank boldly lent people unsecured loans.

Hung Nguyen farmers use harvesters to harvest rice

Over the past 10 years, Nghe An Agricultural Bank has lent farmers 190.2 billion VND to buy agricultural machines, including loans under the decision of the Provincial People's Committee with a loan turnover of 90.2 billion VND. Of which, loans to buy plows were 78.8 billion VND for 6,986 units; harvesters were 3.2 billion VND/144 units; tea picking machines were 9.2 billion VND/833 units. As of September 30, 2011, there was an outstanding debt of 25.2 billion VND (plows had an outstanding debt of 16.7 billion VND, harvesters had an outstanding debt of 3 billion VND and tea picking machines had an outstanding debt of 5.4 billion VND). Every quarter, Nghe An Department of Finance has promptly compensated for interest, with the amount of compensation from 1999 to June 30, 2011 being 15,070 million VND. In addition, implementing Decision 497/QD-TTg and Decision 2213/QD-TTg of the Prime Minister in 2 years (2009-2010), 100 billion VND was provided with interest rate support loans, of which 84.6 billion VND was provided for loans to buy machinery and mechanical equipment for agricultural production and processing with 1,124 customers receiving loans. The amount of interest supported was 12.5 billion VND. As of June 30, 2011, the outstanding debt was 65 billion VND.

Some localities borrowed to buy many agricultural mechanization machines such as: Do Luong district 190 machines with the amount of more than 2.4 billion VND; Nghi Loc 173 machines with more than 2.1 billion VND; Nam Dan 198 machines with the amount of more than 3.1 billion VND; Yen Thanh 188 machines nearly 3 billion VND; Hung Nguyen 132 machines over 1.8 billion VND; Thanh Chuong 239 tea picking machines nearly 2.5 billion VND; Anh Son 253 tea picking machines over 2.6 billion VND...

Thanks to cheap loans to invest in buying machinery for agricultural mechanization, it has brought great benefits to farmers in the province. Previously, every time entering the production season to work on more than 4 sao of her family's fields, Ms. Vo Thi Ngan - Hamlet 13, Nghi Long Commune, Nghi Loc District had to mobilize all the labor force in the family to participate in plowing and hoeing for several days to complete the land preparation. Since the introduction of the plow, it only takes a few hours to complete the land preparation. The plow is deep, the soil is soft, both increasing the quality of the land preparation and solving the seasonal nature of agricultural production. The cost of land preparation using machinery is lower than that of manual work. At the same time, introducing machinery into land preparation and harvesting reduces labor, reduces time, saves costs, increases productivity and economic efficiency. According to the households who borrowed money to buy multi-function plows and harvesters in Hung Nguyen district, after only 2-3 crops of continuously operating the machines in the fields, they have recovered the investment capital to buy the machines. In addition to serving the family's land preparation, now the households who own machines to plow and harvest for many households in the commune also have a significant income thanks to the machines.

According to data from the bank, households that buy multi-function plows and harvesters, whether they are subsidized for interest rates or not, whether they are subsidized for machine prices or not, they all pay the principal and interest on time, without incurring bad debts. And currently, many farming households still have the need to borrow capital to buy agricultural machinery. This shows that households that borrow capital have used the loan capital effectively, contributing to increasing income and improving the lives of farmers. At the same time, through practical research, we see that people are increasingly interested in investing in mechanization in agricultural production. Because this is considered an important factor for large-scale production, improving labor productivity, and accelerating the process of industrialization and agricultural modernization in rural areas.

Quynh Lan