HA NOI — More than 60 per cent of agricultural machinery in use in the Vietnamese domestic market is from China, largely due to the lack of Government financial support to local manufacturers, according to the Viet Nam Engine and Agricultural Machinery Corporation (VEAM).
|Workers assemble farming machines at the Tractor and Agriculture Machines Company. Chinese products dominate the local agricultural machine market, accounting for some 60 per cent of machinery on sale. — VNA Photo
The corporation estimated that there are about 550,000 agricultural machines currently in use nation-wide, mainly for rice harvesting and which are mostly made-in-China, while some are from Japan or South Korea.
Pham Van Liem, deputy director of the Institute for Strategy and Industrial Policy under the Ministry of Industry and Trade (MoIT), said that the local agricultural machinery market cannot develop because the machine's quality is not high and the production standard is still weak.
Foreign machine import is not controlled and leads to unfair competition. Meanwhile, domestic enterprises have to bear all the taxes, especially import taxes levied on components which account for 70 per cent of their assembled machines.
But according to VEAM's deputy general director Bui Quoc Viet, Chinese products are more competitive because they are cheaper while local manufacturers face difficulties with capital, technology and planning.
Pham Hong Thang, from a company which supplies farm machinery in southern Can Tho City's Thot Not District, told the Nong Thon Ngay nay (Countryside Today) newspaper that his company is among seven enterprises approved to get financial support to produce farm machines according to the Government's decision No.63 issued in 2010. However; up to now, there have been no Government loans as local banks have not received any instruction from the State Bank.
In Cuu Long (Mekong) Delta, farmers need about 70,000 diesel engines at a motor capacity of 6-10hp for shrimp farming each year. Domestic production capacity reached 24,000 machines, but may not sell out because people prefer foreign machines from Japan, the former Soviet Union, South Korea, and China. The reason is that domestic machinery is priced 15 to 30 per cent higher than imported machines but less effective.
Chu Van Thien, deputy director of the Agriculture Electromechanical and Post-harvest Technology Institute, said that 90 per cent of the combine-harvest machines on the market are from foreign countries.
Plan to recapture market
According to the 2015 plan of the Ministry of Industry and Trade, agricultural machinery industry will establish a nationwide network of manufacturing, assembling and industrial support. The focus will be on fundamental processes like casting, forging billet, thremal treatment, quality inspection, and appropriate investment for clean industry. The industry strives to win the majority of the domestic market for mid-sized diesel engines and small gasoline engines, and thus meet the requirements of agricultural production. After 2015, Viet Nam plans to produce high-level products such as oil pumps, high pressure hoses and multi-fuel engines.
Agricultural drying machines only meet about 30 per cent of demand and are technologically substandard, according to Thien.
"The Institute also manufactured a collection of combine tracker machines which can collect, process, pack, and carry straw packing. The machines are proven to be effective, yet producing this machine costs money, so local businesses are afraid of investing in the product," Thien said.
A weakness of industrial support makes Viet Nam-made agriculture machines uncompetitive in the home market, according to the Cuu Long (Mekong) Delta Rice Institute.
Liem suggested that the Government give financial support to help farmers develop agriculture and have more preferential policies to produce farm machines. — VNS