Private and public partnerships (PPP) are key to attracting FDI, Dr Dang Kim Son, head of the Institute of Policy and Strategy for Agriculture and Rural Development told the Hai quan (Customs) newspaper.
Private and public partnerships have been introduced to six agriculture commodities sectors over the past two years. In your opinion, what lessons have been learned in that time?
The most striking success has been the increase in agro-productivity – which has doubled or in some cases tripled since the PPP model was introduced.
As a result, farmers' incomes have increased 10-15 per cent while their agricultural practices have followed the farm to fork model.
In the past two years, PPP projects have proved successful in six agriculture commodities sectors, including tea, coffee, aqua products, potatoes and maize.
Over the past two years, some 12,000 tonnes of tea were awarded European Certification and roughly 23,700 farmers were direct beneficiaries of the project.
Meanwhile, the PPP coffee group has drawn participation from many multi-national groups like Bayer, Nedcoffee, Coex and Simexc. They are now operating in five provinces with US$3.5 million in capital investment.
Do you think, the PPP model in agriculture is the driving force in luring more foreign direct investment (FDI) in Viet Nam?
At present, FDI investment in agriculture accounts for between 1-3 per cent. I have to concede that both foreign and domestic investment in our primary industry remains very modest.
Examples from many other countries have shown the PPP model is a very effective measure. It is able to draw capital investment from different sectors, particularly from the private sector, to areas where the government wants to develop, including agriculture.
In our country, agriculture has its own comparative advantages and these have been acknowledged by many multi-national corporations. In the past two years, some foreign real estate developers and infrastructure developers have switched their investment flows to agriculture. Furthermore, in the context of climate change, investment in agriculture is seen as a sensible decision. It is forecast that the price of agricultural products will rise and stay high in the coming decades. That's why I think opportunities brought by the PPP model will be very practical for our agriculture industry as well as the rural economy.
There is no doubt that the model also helps leverage more FDI to Viet Nam.
Will you please talk a bit more about the positive signs of PPP projects in the agricultural sector?
Though some initial successes have been recorded, the projects' scale remains small. For example, the demo potato project only piloted in 100 households, while the coffee pilot comprises of several thousand households.
I hope in the near future strong co-ordination between the private and public sector, including the farmers, will usher in a bright future for our agriculture industry.
I should say that among the six sectors I have mentioned, tea and coffee are the most promising. In the northern province of Yen Bai,the PPP model has helped expand networking between farmers and enterprises with other provinces and cities nationwide. It is expected that by 2015, some 30,000 tonnes of environmentally friendly green tea will be harvested through the PPP model in the six provinces of Phu Tho, Tuyen Quang, Yen Bai, Vinh Phuc (in the north) and Lam Dong (in the Central Highlands) and Nghe An (in the central region). Some 23,700 farming households are benfiting from the model.
Meanwhile, Vietnamese coffee has gained a foothold in the international market due to its high quality and environmental credentials. — VNS