Investment in the agro-forestry-fishery sector was put at VND390 trillion during the 2013-2017 period, making up some 5.7% of the total investment in all sectors, as stated at a review conference in Hanoi on November 10 on the restructuring of the agriculture sector.

At the conference

Speaking at the conference, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said that the ministry had adjusted public investment capital for restructuring and potential projects which bring in high added value, including irrigation systems in the fishery sector.

Investment capital from the State budget allocated for agriculture and rural development in the 2013-2017 period was VND712 trillion, 1.54 times as high as that for the previous five-year period. The figure was lower than the average increase in the country’s budget capital, with a 1.66-fold rise.

Yet, capital for the agriculture sector during the 2013-2017 period only rose 1.3-fold, if price escalation was included.

“Investment in agriculture and rural development remains limited, at a small proportion of 6% of the total,” according to a report released by the ministry, highlighting a bottleneck faced by the project for the restructuring of the agriculture sector, as approved by the Prime Minister on June 10, 2013.

Tuan said that some 2,000 enterprises operating in agriculture were newly established in 2017, up 20% compared to the average of the 2014-2016 period, bringing the total number of firms investing in the agriculture sector to 7,000.

As of September, the country had had 49,600 enterprises operating in the agricultural product chains, accounting for 8% of the total number of firms nationwide. Of the 49,000 firms, 8,600 directly manufactured farm produce.

Despite the strong hike, the number of enterprises operating in the agriculture sector made up a mere 1% of the country’s firms.

It was noted that very small agricultural firms accounted for over 95% of all businesses, with labor productivity being 38% lower than that throughout the country, which partially hampers capital flows in the sector.

Addressing the conference, a representative from the State Bank of Vietnam said that spending on the development of the agriculture sector has reached VND1,600 trillion to date, up 9% against the end of 2017 and increasing 2.3-fold compared with when the restructuring project began.

However, the representative said that the agriculture sector was facing numerous difficulties and challenges, and failed to meet the requirements of such restructuring, causing a negative influence on credit investment in the banking sector.

Agricultural manufacturing remains spontaneous and scattered, with no efficient product manufacturing chains. Statistics from the ministry show that some 300 out of 700 chains in the country operate effectively.

Such failure in the performance of the agriculture sector was attributed to unstable consumption markets and weak applications of advanced technologies and international standards.

Also, the procedures for granting certificates of property ownership on agricultural land, in line with the ministry’s Circular 33, remain time-consuming and lengthy. As such, it is necessary to address difficulties and remove complicated business conditions to smooth the path for farmers and agricultural enterprises.

SGT