Foreign investment starts pouring into Vietnam's agriculture
Updated at Wednesday, 06 Jun 2018, 07:45
The Hanoitimes - Many foreign firms are exploring investment opportunities in Vietnam’s agriculture, fueled by the country’s innovation desire and commitments to streamline red tape in the sector.
Australia’s AgUnity - a mobile blockchain platform that helps farmers, cooperatives and companies to build trust and enables farmers to get better access to share resources - is piloting a project on the rice value chain in Vietnam.
AgUnity is just one of many foreign developers of blockchain-based technological platforms who are greatly interested in investing in Vietnam’s agricultural sector, which has great potential for development.
Enterprises invest in agriculture receive a wide range of State support.
Interested foreign firms come from many countries and territories, such as Enzootic Ltd. (Israel and Hong Kong), GoodHout BV, SmartFarm Co Ltd, and Verifik8/FairAgora Asia (Thailand), GAGO Ltd (China), Intello Labs Pvt. Ltd. (India), Pycno Industries (Australia), Gintel (Taiwan), and Fluence corporation-NIROBOX (Israel).
Industry insiders attributed the rising interest of foreign investors in Vietnam’s agriculture to the government’s policies on considering the sector a key contributor to the nation’s economic development.
In addition to changes in land and capital policies, the government has so far approved plans to build ten agricultural zones applying high-tech methods by 2020. The number is expected to more than double to 22 zones by 2030. In the meantime, several high-tech agricultural centers at a municipal level have started popping up across the country.
Notably, the government has recently also issued new regulations on incentives for agricultural and rural investments, which has been awaited for five years.
Under Decree 57/2018/ND-CP issued in May, enterprises, which are established and operate in line with the Law on Enterprises and have agricultural projects encouraged by the State, will be entitled to a wide range of State support in terms of land, credit access, high-tech application, workforce training and market development.
Specifically, projects eligible for investment incentives will be exempted from land and water surface rents in the first 15 years since the State allocates land/water surface to the owners of the projects. The rents will be reduced by 50 percent in the following seven years.
Projects eligible for incentives will be exempted from land and water surface rents in the first 11 years and shall be offered 50 percent reduction of the rents in the following five years.
To ease the credit access, agriculture and rural investment projects will also receive preferential interest rates.
The State also supports 80 percent of the cost (but not more than VND300 million or US$13,200 per case) of implementing scientific research projects as well as purchase of technology rights, technology or results of scientific research and technological development to create new products, improve technologies, reduce environmental pollution, and save materials and energy.
The decree also stipulates enterprises that have investment projects on milk and beef production will get an aid of VND5 billion per project to build infrastructure for waste treatment, transport, electricity, water, facility and equipment.
Besides, the government has also constantly called and aggressively pushed relevant ministries and agencies to engage more in the agriculture sector’s reform in a move to easing investment in the sector.
After being required to review administrative procedures, business and investment conditions under its management this year, the Ministry of Agriculture and Rural Development (MARD) proposed simplifying or removing 287 out of 508 administrative procedures in the agriculture sector.
MARD also reviewed 345 business and investment conditions and proposed that 118 of those be amended and eliminated, equal to 34.2%.
Moreover, 18 out of 40 specialized inspection procedures will be reviewed, while quarantine and clearance time will be cut from 24 hours to about four hours for goods transported by land or air, and about 10 hours for those transported by sea.