VietNamNet Bridge – Nong Thon Ngay Nay (Countryside Today) newspaper talked with Nguyen Hoang Dung, Director for Research and Development of HCMC's Economics and Management Institute on financial aid.
Why have you proposed an aid package of VND100 trillion (US$4.5 billion) for the agricultural production sector?
Joining the Trans-Pacific Partnership (TPP) agreement is a turning point for Viet Nam's economy. However, the country's agricultural sector will face many challenges because the standards and qualification of Vietnamese farmers are lowest among the 12 TPP countries.
Lessons drawn since we joined the World Trade Organisation (WTO) eight years ago have helped Vietnamese farmers become aware of the market economy, but the change has been slow and basic.
For example, rice and coffee are key products for the agricultural sector, but the quality is low so they are unable to access hi-end markets to make more profits.
I think the Government should restructure and invest more in the sector. Farmers need to be invested in to raise their status during the process of international integration.
Do you have any ideas for restructuring the agricultural sector?
Among the 12 TPP nations, Viet Nam and Malaysia are expected to gain a lot from the agreement.
In the "big playground", farmers will benefit from new sustainable values such as increased export turnover, capacity, incomes and living standards. These will also help improve the reputation of Vietnamese farmers.
However, these benefits will only be realised when the following issues are solved.
First, the farmers have to thoroughly understand supply and demand in a market economy. It means farmers should pick key products for export. In my opinion, rice, coffee and catfish are key agricultural products for Viet Nam. If these products get the necessary investment, they will be more competitive than other TPP nations.
Second, farmers should be aware of fair competition. This requires proper investment to reach quality standards and price transparency. Fair competition means the farmers should learn international rules and standards, as well as the import-export process in other countries.
Third, branding for agricultural products is very important.
Finally, farmers need assistance from the whole of society in the supply chain through production co-operation and the consumption of Vietnamese agricultural products.
It is time for the Government to offer a financial aid package worth about VND100 trillion to help farmers overcome the current difficulties and prepare for international integration.
If the Government does provide the aid package, how should it be allocated to help farmers and ensure it does not violate commitments to trade agreements on eliminating subsidies in agricultural production?
If the aid package is offered, I think it should be divided into two parts. One will be used for infrastructure, technical equipment and technology. The other will be for rotating capital and spending on branding and advertising for local agricultural products.
The aid could be offered to key enterprises in the supply chain, from input materials, production and distribution.
The money will also help to train farmers in preparation for integration.