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Many agriculture firms in the red

Update: March, 29/2012 - 10:17


Workers bottle baby cucumbers in an enterprise in Ha Noi's Tu Liem District. — VNA/VNS Photo Minh Dong
HA NOI — Problems in accessing funds and leasing land have forced many Vietnamese agricultural firms into "the red". This prevents them from competing in international markets and maintaining the quality of their products.

These concerns were voiced at a forum for northern agricultural businesses on Tuesday by the Ministry of Agriculture and Rural Development.

According to statistics released at the forum, 90 per cent of agricultural firms have less than VND10 billion (US$470,000) in capital. Only 1 per cent have more than VND200 billion ($9.5 million).

Pham Xuan Hoan, deputy head of the committee for enterprise reform under the Ministry of Agriculture and Rural Development (MARD), said lack of funds at low interest rates prevented many firms from expanding production and finding new markets.

This also prevented them from being able to borrow funds from banks at low interest rates, accessing international markets and meeting international regulations and standards.

Many firms complained about land-leasing policies even though the Government has many regulations aimed at providing preferential conditions for agricultural companies.

Doan Trong Ly, general director of Aprocimex, a feed production company, said many Government policies did not reach those who deserved to benefit. While farm production was considered a priority sector, most agricultural firms had to pay ceiling interest rates of at least 16.5 per cent and even 25 to 27 per cent.

Pham Ngoc Thao, a representative from the Viet Nam Sugar and Sugarcane Association, said not one single business in the sector had been able to borrow funds at low rates. The association predicted that one-third of farm businesses would incur losses this year.

Thao requested that MARD and the Trade Ministry consider buying the current 200,000 tonnes of sugar in stock so that farmers would not be forced to sell at low prices.

Tran Le, general director of Agro-Forest Technology Muong Phang, said companies that invested in agriculture in mountainous and remote areas were even more prone to lose.

"Our company invested in flower and vegetable growing areas in Hoa Binh, but it has cost much more for electricity and training workers," he said.

Le added that his company found it difficult to borrow funds since it was located in Da Lat, the Central Highland province of Lam Dong, and could not use the property as collateral for borrowing funds in Hoa Binh.

There are nearly 9,000 agricultural businesses registered nationwide, 98 per cent of them small to medium in size.

A similar forum will be held in southern Viet Nam today. — VNS

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