Minister of Agriculture and Rural Development Nguyễn Xuân Cường spoke to local media about measures to boost agricultural restructuring to further develop the sector

Việt Nam has implemented an agricultural restructuring master plan for three years but in the first six months of this year, the sector recorded a negative growth for the first time. Why do you think that is?

In the first six months of the year, the agricultural sector for the first time recorded a negative GDP growth rate of 0.18 per cent. The agricultural sector still plays a very important part in the country’s economic development, with 70 per cent of the population living in agricultural areas and 46 per cent of the country’s workers being employed there. Therefore, the negative growth is a great concern  because it will affect farmers, particularly in disadvantaged areas.

The key reason for the problems is the consequences of climate change that was more serious than our forecast, negatively affecting all agricultural production. Moreover, as Việt Nam has integrated deeper into the world economy, we have more opportunities to export farm produce but we have to face fiercer competition from other countries.

To deal with that, the agricultural sector must be restructured toward the production of commodities and sustainable value chains.

How has the agricultural sector changed after three years of implementing the agricultural restructuring master plan?

Initial results show as improvement in the awareness of business, society and people about agricultural restructuring as reflected in the fact that all 63 localities have specific action plans and programmes.

For example, the Central Highlands province of Lâm Đồng applied high technology in agricultural production on 25 per cent of its farm land, bringing in an average income of VNĐ243 million (US$10,800) per hectare. The Mekong Delta province of Đồng Tháp focused its development policies and planning on five key products, including flowers, rice, ducks, fruits and seafood. Or the northern mountainous province of Hà Giang focuses on exploiting its strengths in vegetables, herbal medicine and in reorganising the husbandry sector.

Besides, a number of sectors have recorded positive results in the restructuring process, such as the dairy and husbandry sectors. Pig raising produces an average of 4-4.5 million tonnes of meat each year.

However, agricultural restructuring takes time. After three years, according to our general assessment, positive changes have been recorded in some sectors and localities, while the remaining ones still need to carry out the restructuring plan more resolutely.

Some people say businesses should invest in agriculture in order to carry out restructuring. What do you think?

In order to restructure agricultural production towards modernity, businesses will be a key factor, serving as a foundation for all commodity production. About 3,600 businesses have invested in agriculture, out of nearly 500,000 businesses in the whole economy,  equivalent to nearly 1 per cent. That figure is still too small.  

In recent years, related policies and mechanisms are encouraging businesses to invest in agriculture. However, there are still a number of issues that make these policies and mechanisms hard to adopt. For example, Government Decree 210 on incentives for enterprises investing in the farming industry and rural areas targets all regions of the country, but the development conditions at each locality and region are different. Also, the post-investment support policy provides financial support worth a maximum of VNĐ2.5 billion ($111,000) for businesses, but investment in agriculture carries a high risk and a number of sectors require huge investment capital, so many localities lack funds to support businesses.

Besides, shortcomings remain in various types of credit supply or access to land funding. Therefore, the Prime Minister has entrusted the Ministry of Agriculture and Rural Development and relevant ministries and agencies to study, assess and recommend changes to Decree 210. This is meant to encourage businesses to invest in agriculture and to provide conditions to develop large-scale production. — VNS