VietNamNet Bridge – Although agriculture is touted as a competitive advantage of Vietnam, complicated administrative procedures have held back the development of the sector.

Nearly 80% of agricultural enterprises complained about procedural problems and want administrative reform to create favorable conditions for them to grow, according to a new survey conducted by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).

The report pointed out administrative procedures and regulations applicable to agro-aqua-forestry enterprises are among the hindrances.

A World Bank (WB) report on facilitating agribusiness in 2016 based on the survey of 40 countries worldwide showed that Vietnam’s agribusiness environment is below the overall average. In Southeast Asia, Vietnam only ranks above Laos, Cambodia and Myanmar.

According to the report, Vietnam has low scores for management of plant seeds, agricultural machinery and transport. The business environment of plant seeds is rated at 62.5 out of 100 points, lower than Cambodia with 68.8 points, Bangladesh with 70.8 points and the Philippines with 83 points.

It takes 901 days in Vietnam to register new varieties of plants compared to 571 and 306 days in the Philippines and Myanmar respectively.

Import procedures are a headache for new flower varieties. Exporters must provide a pest risk analysis, complete business data, output, and exporting countries. These are refused by foreign partners as they are relating to their business secrets.

Procedural problems have been pointed out by enterprises in the sector at many conferences but have remained unresolved. A representative of a foreign direct investment (FDI) company specializing in plant varieties bemoaned at a workshop last year that the approval process is time-consuming and some varieties could become obsolete when they are approved for cultivation in Vietnam.

The WB report indicated that Vietnam ranks 37th among 40 nations surveyed on the business environment for agricultural machinery with only 24.4 out of 100 pointes, only above Laos, Nepal and Myanmar. A weakness in the country’s machinery business management is a lack of strict regulations on the quality of agricultural machine import as well as quality control prior to export.

Vietnam ranks 35th among 40 regional and international countries in terms of business environment for agriculture transport, reaching only 54.8 out of 100 points. Although the licensing of transport activities is done quite well (81 points at 8th ranking), Vietnam still has many tight regulations of cross-border transport (28.6 points at 38th ranking) while Laos and the Philippines scored high in this category with 71.4 points. In addition, Vietnam also lacks electronic processing systems for licensing and renewing transport licenses.

Besides, procedures and regulations allowing firms to enjoy tax and fee incentives are inadequate. For example, coffee exporters are exempt from value-added tax (VAT) but the procedures for tax refunds are slowly implemented, affecting corporate cash flow.

The refund of corporate income tax, if overpaid, is not immediately done in cash but is only gradually deducted. Suppliers of agricultural products, for example rice, with brand and quality on the domestic market have to pay a 5% VAT, while normal rice exporters or traders are not subject to this tax.

Thuy Dung

SGT