Businesses investing in livestock production facilities assisted VND 10 billion per project

The Ministry of Planning and Investment has proposed that the businesses investing in livestock production facilities will be supported a maximum of VND 10 billion per project.

The proposal was mentioned in the Decree on mechanisms and policies to support the development of enterprises investing in agriculture and rural area, which is drafted a timely response to some new emerging issues and factors that influence businesses in the field of agriculture manufacture.

Taking the price of domestic pork is hiking as an example, the idea will help revive hog farming, creating an equal competitive environment and lower the cost of products to match the market.

At a conference on the solutions to develop livestock and fishery industry last month, Deputy Minister of Agriculture and Rural Development Phung Duc Tien said that the trade activities are staggered with the supply chain broking amidst the uncertainties of the Covid-19 pandemic.

Besides, the risks from the pandemic are still on the watch for livestock and fishery industries. Citing the African swine fever was still detected at some small epicenters, or H5N6 flu in poultry, the deputy minister added that it would cause difficulties without timely handle and vaccination. Not to mention diseases on shrimp, pangasius, mollusks... due to the influence of climate change. He also said that the market has witnessed several changes leading to the requirements on technology innovation and adoption among manufacturers.

Tien emphasized difficulties due to the increase in feed prices, currently about 20-30% higher than average, causing the increase in product prices accordingly.

Commenting on this issue, the General Department of Fisheries representative said feeding price accounts for about 50-70%, with an average of 60% in production costs of fisheries. Thereby, the increase in feeding price will leading to the rise of manufacturing expenses, higher the risks in the fishery industry as well as reduce the competitive ability among fishery products.

The reasons that prove it is necessary to build up the draft include: Covid-19 pandemic has staggered the production and processing of agricultural, forestry, and fishery products; the moving trends of domestic and international agricultural markets towards safety and efficiency; investment opportunities from free trade agreements between Vietnam and other countries such as the EVFTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, etc.) among others.

According to the draft, businesses investing in agriculture and rural area will prefer the exemption or reduction of land and water surface rents; partly support of investment funds or provided subsidized loan interest rate gap and simplification of administrative procedures.

Land rent exemption and reduction, investment credit support

The draft stipulated the preferential and supportive policies, including the exemption and reduction of public land and water surface rent.

Agriculture project which is eligible for investment incentives be exempted from land and water rent for the first 15 years from the date on which the State leases land or water surface and enjoy a 50% discount on land and water surface rent for the next 7 years.

Relating to investment credit support policy, businesses projects in agriculture and rural areas are supported by the local budget with interest rates on commercial loans after the project is completed as follows: The level of support equals the difference between the commercial loan interest rate and the State investment credit lending interest rate, calculated on the actual outstanding balance at the time of support consideration.

The interest rate support period is calculated from the date of disbursement under the credit contract with commercial banks: Up to 8 years for agricultural projects with special investment incentives, up to 6 years for agricultural projects investment incentives, up to 4 years for agricultural projects to encourage investment. The maximum interest rate supported loan limit does not exceed 70% of the total investment of the project.

Aquaculture enterprises with a scale of at least 5 hectares or more are supported with VND 200 million VND per hectare for infrastructure construction, water supply, drainage, and environmental treatment. The farming area increased leading to an equivalent increase of support level, which will not exceed 50% of the total project investment, maximum to VND 10 billion per project.

The Ministry of Planning and Investment is collecting people's comments on this draft at the Ministry's web portal.