Tuesday, November 21 2017

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Land bank: good for farmers and firms

Update: April, 17/2017 - 10:19
NA Economic Committee Deputy Chairman Nguyễn Đức Kiên. — Photo tienphong.vn

NA Economic Committee Deputy Chairman Nguyễn Đức Kiên tells Tiền Phong (Vanguard) that a land bank can help avoid difficulties and risks relating to land accumulation.

Agricultural land accumulation appears to have become a trend now. Can you tell us something about this?

Agricultural land accumulation is actually taking place in many places, mainly in three ways: the first one is where farmers gather their land together and plant the same crops, use the same inputs (like fertilizers); the second way is for firms to negotiate with each household individually to rent or buy their land; and the third is for authorities to rent land from farmers and lend it to firms.

Each way has its own advantages and risks. If farmers gather land together and can work well with each other, that’s good, but not good enough. If they can’t find markets for their output and don’t apply new technologies in their production process, they’ll be vulnerable to market fluctuations.

On the other hand, if firms rent farmers’ lands directly, they may be doing good because they have financial resources and output markets. But if firm’s don’t do well, they won’t be able to pay their rent to farmers.

So the land bank is where farmers can deposit their land and earn interest from lending them to enterprises.

Can you elaborate? How exactly would this work?

A Land Bank would be set by the Government. Farmers can deposit their land in it, like they would deposit money in normal banks. So, the land would be “money” deposited in the bank for a certain period of time, on which they would earn interest no matter what the bank does with it.

Enterprises can borrow land from this bank to do business, with the condition that they have to use on-the-spot workers, in this case, the farmers. So, even if the firms don’t do well and go bankrupt, farmers won’t lose their land.

According to the Constitution, once a land lot that is allocated to an individual remains unused, it can be taken back and allocated to another person. But this would not happen if that individual deposits the land in a land bank.

Farmers can then have two income sources: one from land rent and the other from working for enterprises.

What do you think about proposals to expand land limits?

It would be difficult to make changes to the Land Law to expand land limits.

Let’s take a look at the option where firms buy land from farmers to accumulate land. If a firm buys up to 30 hectares of agriculture land from 3,000 families, it means roughly 15,000 people would have to find another way to earn their living instead of doing farm work. A firm can recruit at the most 3,000 people. What about the rest?

The Government needs to look at this matter and think of a way to harmonise the interest of firms and farmers, a solution that accumulate agriculture land for large-scale production, but does not create other troubles.

Regarding the adjustment of land limit, as a National Assembly deputy, I would consider voting for it, but there needs to be a calculation and comparision of benefits created by expanding land limits and the socio-economic risks this entails.

The number of enterprises investing in agriculture is still modest. Do you think policy incentives are needed to increase this number?

We can’t force enterprises to invest in the agriculture sector. In a market economy, once an industry can generate profits, investors wouldn’t hesitate to invest in it.

It’s been a custom that when talking about agriculture, we are usually talking about rice, while there many other things to talk about. For instance, in Sơn La Province, farmers raise cows, plant oranges and earn billions of đồng each year. Do they need to expand land limits? So there is a certain mindset about farming when we talk about land limits or expanding them.

We have to admit that, without enterprises, farmers can still survive. But without farmers, enterprises can’t. Enterprises need to understand that farmers are their source, and if they want to thrive, they need to share their benefits with farmers. They can contribute money and technology, and farmers can contribute their land and labour.--VNS

 

 

 

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