Vietnam needs more hi-tech farming to boost economy

The number of hi-tech agricultural companies in Vietnam remains modest, slowing down the country's global integration progress, a leader from the Vietnam Chamber of Commerce and Industry (VCCI) has said.

Vietnam only has 46 hi-tech agricultural firms so far.

 The information was revealed by Vu Tien Loc, the Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), at a recent conference discussing measures to develop an ecosystem for hi-tech agricultural companies held in Hanoi this week.

Loc said there are only 46 companies in Vietnam are acknowledged as hi-tech agricultural companies - a modest figure in the agricultural sector, which is seen as a key pillar of the country's economy.

“The rapid advancement of information technology and Vietnam’s efforts in global integration requires higher product quality, while urbanization and climate change are posing major challenges to agricultural production,” Mr. Loc said.

To solve these issues, experts at the conference said the development of hi-tech farming continues to be an inevitable trend and should be the direction going forward for Vietnam’s agricultural sector.

While the government has been providing incentive policies to attract investment into hi-tech farming, including a resolution No.116/2018/ND-CP to help agricultural firms better access credit and loans, there remain major restrictions hindering the development of the sector. These include legal framework, capital, human resources, science-technology, land resources and distribution network. Among them, capital is considered the biggest issue.

Ha Thu Giang, deputy director of Credit Department of Economic Sectors under the State Bank of Vietnam (SBV), said total outstanding loans in the agricultural sector stood at VND2,170 trillion (US$93.87 billion), or 25% of the total loans in the economy. Of the sum, loans for hi-tech farming projects amounted to VND67.5 trillion (US$2.9 billion).

“Lenders have their own issues before providing loans in this area,” she noted, adding hi-tech farming projects require large amount of investment capital but not every project can prove its efficiency and feasibility.

Nguyen Thuy Duong from Vietinbank expected the government to consider the establishment of agricultural insurance funds to support enterprises and farmers committing to hi-tech farming projects.

“ More flexible policies are required to reduce risks for both banks and customers in the lending process,” she noted.