Deputy Director of the Central Institute for Economic Research and Management Vo Tri Thanh spoke with Nong thon ngay nay (Countryside Today) newspaper about obstacles to high-tech agriculture.
Many real estate, finance and banking investors have recently invested hundreds of millions of dollars in high-tech agriculture. What are your views on this?
I think it is sending a positive signal to the country's agriculture sector. By applying new technology that improves the productivity and quality of production, companies have been able to attain higher profits, create valuable products and generate income for farmers.
Typically, agriculture, and especially high-tech agriculture, has not been an attractive field for investors to make big investments. This is because the limited supply of skilled workers and infrastructure was not conducive to nurturing the development of high-tech agriculture.
As well as the risks being unpredictable, especially in regards to weather patterns and pestilent insects, the returns on investment are not as high as in other fields with a lower or equivalent level of risk.
To counter this, enterprises have had to research the opportunities to invest in new technologies that help increase the value of their products.
For example, Hoang Anh Gia Lai Group has invested a lot of money in modern technology from Israel to cultivate sugar-cane and rubber in Laos. This advanced technology has allowed sugar-cane discards to be used to run the plant's power station, with ashes from the power station used for fertilizer production. The ultimate impact has been that it has allowed the group to lower the price of its sugar-cane to about VND4,500 per kilo, compared with competing products on the market priced between VND12,000-13,000 per kilo.
How would the involvement of more large investors affect the agriculture sector's future?
Statistics have showed that around 29 high-tech agriculture areas have been established in Viet Nam. While this symbolises progress, these activities are still relatively modest. In some areas, there are only a few pilot projects that could not be expanded due to a shortage of investment.
There have been high-tech agriculture models that have been successful in bringing in higher profits in localities like Lam Dong Province. Here, the proprietors of these models have been normal farmers or small-to-medium sized companies.
For me, the way we see value-added agriculture has changed remarkably.
Firstly, the era of low-value agricultural products has gone. Thanks to high-tech investments, people can create higher value-added agricultural products to sell on the market place.
Secondly, many enterprises have begun seeing agriculture as a value chain that incorporates processing, consumption or product diversification. I think that it is a very good sign for the agriculture sector: that with more investment there is significant potential to create competitive, high-value agricultural products.
Many enterprises have said that they have faced difficulties. For you, what measures need to be implemented to improve the situation?
Big lessons have been learnt from the history of the country's agricultural sector, including the advantages of scaling production and cultivation, and making the process of cultivation more productive.
This was seen clearly through measures to mass land together to minimise spending and apply the developments of scientific and technological research.
We also need to prioritise the construction of infrastructure and development of price policies that are transparent. The above lessons are not enough in the context of an open market. The gains in value from agriculture have stagnated. That's why we need to reform.
What areas do you think are in need of reform?
For me, there are three things that need to be done to build momentum in this area.
Firstly, we need to improve the scale of land in cultivation to reduce production costs. Secondly, we need to improve what's being done in the areas of scientific research and technological application.
Finally, we need better co-ordination between agents in the agricultural production chain, including the farmers, enterprises, distribution agents, finance and banking institutions, technology firms, research institutions and market information bodies. These elements must operate as a seamless ecosystem to develop the industry as a whole and prevent monopolies.
It is also necessary to have organisations specialising in agriculture to help farmers acquire the right technology and the funds to help them better fulfill their role in the agricultural production chain. — VNS