Agriculture ministry working on plans to attract FDI

Co-operation between producers and companies is necessary to develop agriculture and to attract more investment in the sector. — Photo thoibaokinhdoanh.vn

Co-operation between producers and companies is necessary to develop agriculture and to attract more investment in the sector, Minister of Agriculture and Rural Development Nguyen Xuan Cuong has said.

Thời Bao Kinh Doanh (Business Times) newspaper quoted him as saying companies are the most active link in the agricultural sector value chain.

They have the financial wherewithal to resolve problems, he explained.

An official from Eurocham said that besides the Government companies are also very important in attracting FDI in agriculture.

The Foreign Investment Agency (FIA) has reported that in many provinces and cities companies have drawn up plans to collaborate with foreign investors.

Many investors from Japan and South Korea have studied agricultural projects in Việt Nam, it said.

FDI attracting strategy

The Ministry of Planning and Investment is drawing up a list of measures to attract more FDI.

The proposals, likely to be approved by the Government in the first quarter, target FDI worth US$5 billion by 2020 and $8 billion by 2030.

They envisage working with the Ministry of Investment and Planning to amend unfeasible regulations in Decree No 210/2013/NĐ-CP issued by the Government on attracting investment in the agricultural sector and rural areas.

The ministry lists four priority categories for FDI: development of new plant and animal strains, production of high value-added inputs for the feed industry and investment in clean farming technologies, agriculture-forestry-fisheries processes using modern technologies, and production of veterinary and plant protection medicines.

The minister also said that public – private partnerships (PPPs) are an important channel for attracting foreign direct investment in agriculture.

Last year was a tough one for the agricultural sector due to the effects of climate change on Viet Nam.

It achieved mere 1.2 per cent growth though exports expanded by 6 per cent to US$32.1 billion.

It failed to meet the FDI target.

The Ministry of Planning and Investment said FDI in the sector remains modest, with the cumulative investment as of last November being less than $4 billion.

The figure represents just 1.2 per cent of overall FDI in the country.

The ministry said the rate of annual FDI growth has been increasing since 2012, going up from 0.6 per cent then to 1.2 per cent last year.

But an FIA official said the investment remains very modest compared with the sector’s potential.

Moreover, foreign investments are not uniform in all areas of agriculture, with the lion’s share going into wood processing industry, animal husbandry and feed production, he said.

FDI in agricultural and fisheries processing is low, he said.

Experts blamed the lack of FDI in the agricultural sector on the failure to spell out priority projects for investment.

This worries investors, they said.