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VietNamNews

Investment in agricultural sector still low

Update: July, 31/2012 - 10:17

 

Employees of food exporter Vifoco Import Export Joint Stock Company at work. More investment is wanted in the agricultural sector. — VNA/VNS Photo Tran Viet
HCM CITY — Only 55-60 per cent of the agricultural sector has met its investment needs, and if a new policy for the industry is not drawn up by the Government, the sector could be taken over by foreign companies, according to experts.

Although agricultural exports have recorded steady growth over the years, investment in the sector has been scattered and ineffective.

Agriculture contributes 20 per cent of the country's gross domestic product (GDP), providing jobs for half of the workforce and ensuring food security.

Public investment in agro-forestry and fishery production accounts for nearly 36 per cent out of the total agricultural sector's investment, according to a recent report from the National Assembly's economics committee.

Foreign direct investment (FDI) in agriculture fell from 8 per cent in 2001 of the country's total pledged FDI capital to under 1 per cent last year, the Ministry of Agriculture and Rural Development has said.

FDI investment in the agricultural sector in the 1990-2010 period stood at only US$4.3 billion, according to the ministry.

Poor facilities have hindered both local and foreign investment in the sector, experts have said.

The agricultural sector has played a key role in maintaining economic stability amid the global economic crisis, but it is faced with many risks. Many farmers and businesses have incurred major losses due to a drop in prices for farm produce as well as prices for livestock and poultry. Le Van Me, director of Phu Son Breeding Company, said the breeding business can be a gamble because prices are sometimes too high or too low, and there are disease threats.

Experts said that has occurred because investment in the industry has not been structured well.

There main factors of the animal breeding industry, breeders, feed and disease-control, remain problems.

La Van Kinh of the Institute of Agricultural Science for southern Viet Nam said low breeder quality had increased production costs.

According to the Viet Nam Animal Feed Association, the country has to import as much as 80 per cent of materials for animal feed production.

Over-reliance on import materials has also driven up production costs.

Animal feed only accounts for 50-55 per cent of pig-production costs in the US and Canada, but in Viet Nam it is as high as 75 per cent.

According to many experts and pig-farm owners, Viet Nam's animal breeding industry is on the verge of being taken over by foreign firms if the Government does not create a clear development policy for the industry. — VNS

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