Following the equitization of agricultural and forestry farms in Nghe An, there has yet to be a breakthrough.

Sugarcane cultivation at Song Con Agricultural Joint Stock Company (Tan Ky). Photo: Van Truong

Positive results

From August 8, 2018, Song Con Agricultural Joint Stock Company, located in Tan Phu commune, district...Tan KyOfficially privatized, the company was previously known as Song Con Agricultural Company Limited. After privatization, the company reorganized its management structure, becoming more dynamic and flexible in its operations, proactive in land use, and organizing production according to the company's direction.

As a result, the land use of over 2,100 hectares has been effective, specifically with the main production tasks of 1,000 hectares of rubber and 500 hectares of sugarcane. In addition, other industries such as rubber processing, agricultural supplies, and technical services for plant and animal breeding have been developed.

The company has boldly invested in land improvement, increasing crop yields, and investing funds in renovating and constructing warehouses, material supply facilities, and rubber processing plants, while strengthening its service network. It coordinates and procures products such as sugarcane and rubber promptly, eliminating the previous problem of product stagnation. The company's annual revenue consistently exceeds 21 billion VND (compared to only 12 billion VND when it was first privatized). The company currently provides employment for 28 staff and workers, and stable employment and income for over 549 farming households under contract farming arrangements.

However, even after equitization, some difficulties remain, such as: The company has not yet been granted a land use right certificate; therefore, it cannot consolidate land plots to create a rational land use plan, and some cultivated land areas are still fragmented. At the same time, this creates difficulties in converting land use contracts from subcontracting to long-term lease agreements for farmers, preventing them from investing in production with peace of mind.

Rubber tree cultivation at Nghe An Coffee and Rubber Company Limited in Nghia Dan district. Photo: Van Truong

The 3/2 Agricultural and Industrial Joint Stock Company in Minh Hop commune, Quy Hop district, was also equitized in October 2018. This equitization has created a new impetus. The company is profitable, and its dividends, as well as the size of its workforce and the living standards of its employees, are steadily increasing. Tax contributions to the state budget are higher each year than the previous year. Specifically, in 2018, revenue reached 18 billion VND, and in 2021, it increased to 34 billion VND. The company provides stable employment for 21 staff and workers and 470 contracted farming households.

A representative from the 3/2 Agricultural and Industrial Joint Stock Company added: The total land area managed by the company is 1,700 hectares, primarily focused on three main crops: tea, rubber, and sugarcane. In addition to emphasizing the application of scientific and technical advancements, the company invests heavily in intensive cultivation of both short-term and long-term industrial crops.

The company has improved its management in product sales. Before the privatization, there was a problem of rubber "bleeding," with some areas selling rubber at low prices... Now, the company directly and promptly purchases rubber and tea, while simultaneously expanding production facilities and planting new trees...

Resolving obstacles promptly

To date, the Nghe An Coffee and Rubber Company Limited has not yet completed its equitization process. The company currently employs 1,861 staff and workers, and has leased land to over 3,400 households. The company's main business is investing in and developing industrial crops (rubber, coffee), fruit trees, sugarcane, etc. The company has completed the land fund review, boundary demarcation, and finalized boundary and landmark documentation, and is expected to soon complete the land use plan. A plan for the arrangement and handling of houses and land according to Decree 167/CP (completed March 2018) has been submitted to the Department of Natural Resources and Environment and the Department of Finance for appraisal, and to the Provincial People's Committee for approval.

A representative from Nghe An Coffee and Rubber Company Limited further stated: The delay in the equitization of management is due to the fact that the company manages a large area of ​​land (4,015 hectares), making it difficult to prepare boundary confirmation tables and complete boundary documents. Signing confirmations on boundary documents from organizations, individuals, and localities with land bordering the company's land takes a considerable amount of time to complete.

Even after equitization, the infrastructure of the 3/2 Agricultural and Industrial Joint Stock Company (Quỳ Hợp) remains inadequate. Photo: Văn Trường

To overcome these difficulties, the company is proposing that the Provincial People's Committee and relevant departments and agencies direct the consulting unit to prepare a land use plan, conduct surveys, create detailed cadastral maps for each land parcel for each contracted household, and hand over the documents for the preparation of land use boundary records, cadastral maps, etc., and issue land use right certificates to the company in accordance with regulations. Currently, the company is focusing on completing the enterprise valuation plan, the labor utilization plan, and the equitization plan, striving to complete the equitization process in 2022.

Based on Government Decree No. 118/2014/ND-CP dated December 17, 2014, on the restructuring, reform, development, and improvement of the operational efficiency of agricultural and forestry companies, Nghe An province has privatized 3 out of 4 enterprises in the agricultural sector: Song Con Agricultural Joint Stock Company (Tan Ky district), 3/2 Agricultural and Industrial Joint Stock Company (Quy Hop district), and Nghe An Tea Investment and Development Company Limited. The Nghe An Coffee and Rubber Company Limited is currently undergoing privatization, but the process is facing difficulties.

The rubber processing plant of Nghe An Coffee and Rubber Company Limited is currently in need of upgrading. Photo: Van Truong.

Mr. Hoang Trong Ky, Deputy Head of the Organization Department of the Department of Agriculture and Rural Development, said: "Implementation..."privatization of agricultural and forestry farms.Shareholders contribute capital in the form of shares, benefiting from and bearing the risks associated with their contributed shares. These companies operate under market mechanisms and the Enterprise Law. The business results of agricultural and forestry enterprises after converting to joint-stock companies have been quite positive.

However, only revenue has increased; profits and tax contributions have not grown as expected. After the transformation, businesses have not been bold enough to invest in production and business, production models have not been innovative, and they have not been able to attract skilled labor. In particular, the agricultural sector is often vulnerable to climate and weather risks, market price fluctuations, etc., making it difficult to find capital for reinvestment.