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Increased ODA investment pledged for agriculture sector

Update: February, 12/2014 - 09:13

What do you think about the current situation of ODA loans invested in agriculture?

To date, enterprises have not invested much in rural agriculture, but ODA capital in agriculture is considerable. The amount of non-refundable capital is fairly high compared to total ODA loans, between US$350-400 million yearly.

However, agriculture and rural fields face risks due to natural disasters and the unstable market.

What changes in rural investment are taking place as Viet Nam becomes a middle-income country?

Previously, ODA loans for agriculture were non-refundable and low-interest. Soon, however, high-interest ODA loans will be provided to those involved in agriculture.

It would be very difficult to attract investment from other economic stakeholders if the Government did not invest in the field, as rural areas do not easily draw investors.

In the near future, ODA loans for rural areas will focus on good projects with high refundable capacity. Loans will be given not only to hunger elimination and poverty reduction projects and infrastructure investment but also health care, education, clean water and environmental hygiene.

Donors have also paid attention to poor and ethnic minority areas. The Government will consider increasing ODA loans for agriculture and rural areas in the coming years.

ODA loans have helped Viet Nam with hunger elimination and poverty alleviation in rural areas, even though many localities remain poor and underdeveloped. How can ODA loans be used most effectively in rural areas?

Along with huge funds from the State Budget, Viet Nam has been using preferential and non-refundable ODA loans for hunger elimination and poverty alleviation.

In the new context, we can't provide free of charge loans for these purposes forever. The poor should contribute between 10-15 per cent of funds to the ODA project. Poverty criteria will also be raised.

Viet Nam has become a middle-income country, so hunger elimination and poverty alleviation measures must be adjusted.

What can be done to attract ODA loans for underdeveloped rural areas?

Viet Nam's economy has improved and the nation has become a middle-income country, so donors will gradually reduce preferential and non-refundable ODA loans for Viet Nam.

Thus, Viet Nam should effectively use the sources that it has. ODA loans for agriculture development must conform to the sector's restructuring projects and the country's socio-economic development strategy and plans.

Viet Nam's priority will targer to attract ODA loans for hunger elimination and poverty alleviation and climate change adaptation, especially projects on disaster risk reduction and sustainable development.

The Government is also giving priority to high-tech agriculture projects with an aim to improve the quality of agricultural products and increase the industry's competitiveness.

The Government recently promulgated Decree 210 on preferential investment in agriculture and rural areas, which will serve as an important foundation for attracting investment from all economic stakeholders. — VNS



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