Facilitating FDI flows into agriculture

14:03 | 28/05/2014 Economy

(VEN) - In recent years, foreign direct investment (FDI) in the field of agriculture was below the desired level despite many advantages in this economic sector. To bring into play agricultural advantages and attract more FDI in this field, the Ministry of Agriculture and Rural Development (MARD) is collecting consultative opinions on an FDI attraction and management project in the fields of agriculture, forestry and fisheries during the 2015-2020 period with an orientation towards 2030.

At a consultation workshop on the FDI attraction scheme for agriculture and rural sector, held by the MARD in Hanoi on May 19, Nguyen Ba Cuong, Deputy Director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that by the end of April 2014, some 520 FDI projects in the field of agriculture and forestry were ongoing in Vietnam with total capital of about US$3.3 billion.

Most FDI projects in the field of agriculture are based in the Red River Delta and the Mekong Delta while provinces in remote areas have attracted almost no FDI project. FDI in agriculture concentrates on fields where invested capital can be quickly recovered.

According to Nguyen Ba Cuong, many localities prefer to attract investment in the field of industry rather than agriculture, so investment promotion activities in the field of agriculture remain limited. Meanwhile, although it has applied policies which offer investors preferences, the agricultural sector has attracted FDI from countries with a medium level of development but still fails to attract FDI from developed countries such as Japan, the US, Australia and EU countries.

The main reason, in the opinion of Tran Van Cong, Deputy Director of the MARD’s International Cooperation Department, is that agricultural production remains at a small scale and lacks specialization, so it is highly risky. Moreover, he said, the domestic agricultural sector still lacked cooperation with foreign countries and was yet to deal thoroughly with problems facing FDI businesses. “FDI promotion activities in the field of agriculture have been ineffective. FDI attraction policies and strategies in this field remain unclear and unattractive to foreign investors,” Tran Van Cong added.

Regarding the FDI attraction and management scheme for agriculture, forestry and fisheries in the 2015-2020 period with an orientation towards 2030, Tran Van Cong said that it was necessary to identify difficulties which were facing FDI businesses and apply suitable policies to assist them.

According to the MARD and the Ministry of Planning and Investment, the agricultural sector has great potential to attract investment and FDI is considered as an important resource helping the sector develop its restructuring project with the aim to improve product quality, increase added value and promote sustainable development. The project will help the sector attract more FDI to achieve its growth targets in the coming period.

To intensify the attraction of FDI in the fields of agriculture, forestry and fisheries, in the opinion of Nguyen Ba Cuong, the governments of localities must re-plan the use of land in areas where FDI projects are based and work out long-term land use plans for each FDI project in the field of agriculture. At the same time, they must set up flexible mechanisms to raise capital for site clearance.

Tran Van Cong said that Vietnam must upgrade the infrastructure to encourage FDI businesses in the field of agriculture to expand operations and apply new technologies to increase the added value of products. At the same time, it is necessary to ensure the equality between domestic and foreign investors in the field of agriculture. /.

Nguyen Tien Dung

Theo ven.vn