Draft agriculture promotion decree below expectations

HANOI – The Ministry of Planning and Investment has not thought out of the box in the process of drafting a new agriculture and rural development promotion decree as this draft is not much different from the 2013 decree that has failed to create a breakthrough for agriculture and rural development.

The draft decree which amends and supplements Government Decree 210/2013/ND-CP issued on December 19, 2013 to promote investment in agriculture and rural development was brought up for discussion at a meeting in Hanoi on Wednesday, which was attended by Deputy Prime Minister Vuong Dinh Hue.

The MPI said at the meeting that the draft focuses on issues such as adding more enterprises and projects to enjoy State incentives; promoting research and development; revising the supporting mechanism for enterprises to expand markets, do the branding, and develop competitive products; boosting administrative reform; and setting up a mechanism for State support funds.

However, Deputy PM Hue said a mere 1% of the nation’s enterprises are involved in agriculture with their capital accounting for a slight 3% of total investments in business and production operations nationwide even though agriculture holds great growth potential and the huge rural market remains largely untapped.

The main reason behind this situation is land, he said. “We have a sense of hesitation when it comes to implementing the land accumulation policy to facilitate the formation of a land transfer market. Thus, businesses have not been able amass enough land for large-scale production.”

The ad hoc nature of land policy change at local level also puts long-term business plans of agri-businesses at stake, he said, while poor agricultural insurance policies discourage banks from lending to farming projects.

Hue noted no enterprises would be willing to run the risk of investing in agriculture if there is no State policy support for them to sell their products.

Attendees at the meeting were of the opinion that Decree 210/2013/ND-CP had failed to bolster private sector investment in agriculture and rural development. Since this decree came out, only 64 projects have been carried out in 23 cities and provinces, said Deputy Minister of Agriculture and Rural Development Ha Cong Tuan.

Worse still, the decree allows for financial aid for enterprises and projects committed to agriculture and rural development. But, Tuan said, this source of funding has gradually declined.

“In 2015, VND168 billion was allocated. In 2016, the figure dropped to VND78 billion. And in 2017, only VND32 billion can be arranged through the pledged amount is VND380 billion,” said Tuan.

But money is not the answer for everything, Deputy PM Hue said, because “Many enterprises said they do not need financial support from the State. A legal corridor and a solid mechanism are more important to attract investors into agriculture and rural development and grow businesses in this sector.”

Explaining the draft decree, Deputy Minister of Planning and Investment Dao Quang Thu said this draft decree cannot be the answer as the above issues involve multiple laws such as the Land Law, the Investment Law and the Enterprise Law.

These laws should be modified or supplemented first, he said, adding a Government decree cannot deal with a big issue like land accumulation, which can be solved when the Land Law is amended.