Workshop on credit investment in hi-tech farming held

Workshop on credit investment in hi-tech farming held

The event featured the participation of managers, economists and representatives of enterprises, which have invested in hi-tech agriculture.

Hi-tech farming is considered one of the driving factors for sustainable agricultural development in line with the government's policy. Since the beginning of 2017, Prime Minister Nguyen Xuan Phuc has signed a resolution providing a credit package worth VND100 trillion (US$4.4 billion) to invest in the development of high-tech agriculture at lower than market rates. The resolution aims to encourage, support and promote the development of hi-tech farming applications.

Following the Prime Minister’s instruction on supporting high-tech agriculture development late last year, SBV has instructed banks to apply preferential loans to high-tech and clean agricultural projects.

Interest rates of the loans will be 0.5-1.5% per year lower than other average lending rates. Meanwhile, lending interest rate for short-term loans averages at 6-9% per year and 9-11% for medium- and long-term loans.

Speaking at the seminar, Chairman of VFA Lai Xuan Mon affirmed that the government resolution has brought about opportunities for businesses as well as farmers working in hi-tech agriculture to develop modern and sustainable agriculture in Vietnam.

According to the SBV, total outstanding loans for hi-tech agriculture have reached nearly VND 32.34 trillion. The loans have been granted to 4,125 customers, 3,957 individuals and 168 enterprises.

Nearly VND 27.74 trillion (about 86 percent) of these loans were granted to high-tech agricultural projects and the remaining VND 4.602 trillion to clean agriculture projects. There was no bad debt, the central bank said. A number of large-scale high-tech projects have commenced operations, involving the breeding of cows, horticulture and fruit and vegetable exports.

However, the reality is that encouraging high-tech and clean agriculture is fraught with a number of risks, especially without stable consumption markets, the experts said. They added that there were not enough policies to distinguish and protect high-tech and clean agriculture projects from normal ones. There was also a lack of guidance on the granting of ownership certificates to assets on agricultural land, including greenhouses and other facilities, the seminar heard.

In addition, hi-tech agriculture was often associated with high production costs and there was not enough consumer confidence in clean farming products.

According to economists, the market would eventually promote high-tech agricultural production, but the initial development phases would carry risks and instability.