Unclear policies on hi-tech agriculture stifling investment

Encouraged by the government’s promise to give support in land and capital, especially the VND100 trillion credit package announced in early 2017, many investors want to pour money into hi-tech agriculture. 

However, investors have been warned that the path won’t be rosy.

Nguyen Lam Vien, general director of Vinamit, a dried fruit manufacturer, said investors need to have knowledge about the market scale. They need support from state agencies in predicting market demand and prices to avoid overproduction.

He noted that though while the government encourages ‘hi-tech agriculture’, it does not say clearly cultivation by chemical or organic methods is encouraged. 

A representative of VinEco, a clean farm produce supplier, noted that farmers are not aware of high-tech agricultural production so it is difficult for enterprises to guide farmers to use and control pesticides.

Farmers are not aware of high-tech agricultural production so it is difficult for enterprises to guide farmers to use and control pesticides.

Pham Phuong Thao, director of Mua Trade & Service JSC, which owns four organic food shops in HCMC, one organic vegetable farm and one vegetable garden, said though the company has a land fund large enough to cultivate organic vegetables and fruit, it only cultivates half of the land because of difficulties in sales.

“We have to go slowly, just grow and sell, and provide information about safe vegetables to consumers as well,” Thao said.

According to Pham Minh Thien, director of Co May, the biggest bottleneck in hi-tech agriculture production is the lack of capital. 

The Prime Minister earlier this year announced the launch of the VND100 trillion credit package for hi-tech agriculture, under which the lending interest rate is 0.5-1.5 percent lower than the average market rate. 

However, Co May and other businesses still don’t have information about the package.

“It is unclear where the preferential credit package is or how to access it,” he said.

Nguyen Tuan Anh, a National Assembly Deputy from Binh Phuoc province, said a company in the province that grows melon needs investment capital of VND6-15 billion per hectare. 

However, the company still cannot access preferential loans because of the lack of detailed policies.

Also because of the lack of capital, Vo Minh Khai, CEO of Vien Phu Trade & Production JSC last year had to sell his 320 hectare organic agriculture area in Ca Mau after 10 years of owning Hoa Sua, an organic rice brand.

Khai said on Doanh Nhan Sai Gon in late 2016 that with modest capital of VND30 billion Vien Phu had, it was difficult to continue organic agricultural production.