After equitization, agricultural and forestry farms in Nghe An still have not made a breakthrough.

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

Positive results

From August 8, 2018, Song Con Agricultural Joint Stock Company in Tan Phu commune, districtTan Kyofficially equitized, previously the company was called Song Con Agricultural Company Limited. After equitization, the company has rearranged the management apparatus, is dynamic and flexible in operation, proactive in land use, and organizes production according to the company's orientation.

Thanks to that, the use of land over 2,100 hectares is effective, specifically with the main production task of 1,000 hectares of rubber, 500 hectares of sugarcane, in addition, developing additional industries such as rubber processing, agricultural materials services, and technical services for plant and animal varieties.

The company has boldly invested in land improvement, increased crop productivity, invested funds to improve and build material warehouses, rubber processing factories, and consolidated the service network. Coordinated and purchased products such as sugarcane and rubber in a timely manner, no longer having product backlogs as before. The company's annual revenue has always reached more than 21 billion VND (when it was first equitized, it only reached 12 billion VND). The company is creating jobs for 28 officers, workers, and over 549 farming households implementing contract farming have jobs and stable incomes.

However, after equitization, there are still difficulties such as: The Company has not been granted a Certificate of Land Use Rights; therefore, it is not possible to consolidate and exchange land plots for reasonable land use planning, some cultivated land areas are still fragmented. At the same time, it causes difficulties in changing the purpose from the contract of allocation for households to long-term land lease contracts, so that households can confidently invest in production.

Developing rubber trees at Nghe An Coffee - Rubber Company Limited in Nghia Dan district. Photo: Van Truong

Minh Hop Commune 3/2 Agricultural Industry Joint Stock Company, Quy Hop District, was also equitized in October 2018. The equitization has created a new vitality. The company is profitable, corporate dividends as well as the scale of labor and the lives of employees of the company are increasing, the budget contribution is higher each year than the previous year. Specifically, in 2018, the revenue reached 18 billion VND, in 2021, the revenue increased to 34 billion VND. The company creates stable jobs for 21 officers, employees and 470 contracted farming households.

A representative of the 3/2 Agricultural Industry Joint Stock Company added: The total land area managed by the company is 1,700 hectares, mainly focusing on 3 main crops including tea, rubber, and sugarcane. In addition to focusing on applying scientific and technical advances, intensive investment is also made for short-term and long-term industrial crops.

The company has improved management in product consumption. Before the management was equitized, there was a situation of rubber “bleeding”, some places sold rubber to the outside at cheap prices... Currently, the company has directly and promptly purchased rubber and tea, combined with expanding the production workshop and planting new ones...

Quickly remove obstacles

Up to this point, Nghe An Coffee - Rubber One Member Co., Ltd. has not yet completed its management. The company currently has 1,861 staff, workers, and more than 3,400 households receiving land contracts. The company's main business is investing in the production and trading of industrial crops (rubber, coffee), fruit trees, sugarcane, etc. The company has completed the land fund review, boundary determination, completed boundary records, boundary markers, and soon completed the construction of a land use plan. Developed a plan to arrange and handle houses and land according to Decree 167 CP (completed in March 2018) submitted to the Department of Natural Resources and Environment, the Department of Finance for appraisal, and the Provincial People's Committee for approval.

The representative of Nghe An Coffee - Rubber Company Limited added: The reason for the slow management of shares is because the unit manages a large area of ​​land (4,015 hectares), so the work of establishing a table confirming the land use boundary and completing the boundary records of the company is facing many difficulties. Signing the confirmation on the boundary records for organizations, individuals and localities whose land is adjacent to the land belonging to the unit takes a long time to complete.

After equitization, the infrastructure of 3/2 Agricultural Industry Joint Stock Company (Quy Hop) is still facing difficulties. Photo: Van Truong

To overcome the difficulties, the company is proposing that the Provincial People's Committee and relevant departments, agencies and branches direct the consulting unit to develop a land use plan, measure and create cadastral maps, detailing each plot of land for each contracted household and hand over documents to prepare land use boundary records, cadastral maps... and issue Land Use Rights Certificates to the company in accordance with regulations. Currently, the company is focusing on completing the enterprise valuation plan, labor use plan and developing an equitization plan, striving to complete the equitization work in 2022.

Pursuant to Decree No. 118/2014/ND-CP dated December 17, 2014 of the Government on arrangement, innovation and development, improving the operational efficiency of agricultural and forestry companies, Nghe An has equitized 3/4 enterprises in the agricultural sector, namely Song Con Agricultural Joint Stock Company (Tan Ky), 3/2 Agricultural Industry Joint Stock Company (Quy Hop), Nghe An Tea Investment and Development Company Limited. Nghe An Coffee - Rubber Company Limited is in the process of equitization, but the implementation process is facing difficulties.

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

Mr. Hoang Trong Ky - Deputy Head of Organization Department of Department of Agriculture and Rural Development said: Implementationequitization of farms and forestry farms, shareholders contribute capital in the form of shares, enjoy benefits as well as bear risks of their contributed shares. Companies operate according to market mechanisms and the Enterprise Law. The business results of agricultural and forestry enterprises after converting to joint stock companies are quite positive.

However, only revenue has increased, while profits and budget contributions have not grown as expected. After the conversion, businesses have not boldly invested in production and business, production models have not been innovated, and have not attracted qualified workers. In particular, the agricultural sector is often subject to risks related to climate, weather, market price fluctuations... so finding capital for reinvestment is difficult...