Firms ignore rural potential

Update: August, 26/2015 - 09:01
Farmers in Thanh Dong Commune, Vinh Long Province tend to sweet potatoes imported from Japan. Authorities in the commune expect to increase income per capita to VND26 million a year. — VNA/VNS Photo Dinh Hue

HCM CITY (VNS) — Despite being seen as the decisive factor in achieving sustainable rural development, the business sector still remained largely an untapped power, experts said at a conference yesterday to discuss the subject.

In fact, the number of businesses investing in rural development actually went down from 1.6 per cent in 2007 to less than one per cent in 2014.

Almost five years after the implementation of a national target programme on new rural development, total investment now amounts to VND851.8 trillion (about US$38 billion).

Of this, only 4.9 per cent came from the business sector, failing to reflect the sector's potential by a long shot, said the Central Coordination Office on New Rural Development.

A report by the General Statistics Office indicated only 0.96 per cent of the country's businesses operated in agriculture, forestry and aquaculture last year.

At the conference, organised by the General Council of Agriculture and Rural Development, experts said that factors such as climate change, inadequate infrastructure and the lack of incentives to encourage businesses to invest were hindering rural development

Truong Cong Ngan, head of Quang Ninh's provincial rural development committee, said it was absolutely essential for business that the country's policies and legal mechanisms remained stable in the long term.

Fear of frequently-changing regulations and Government policies had been a major roadblock for many businesses wanting to invest in rural development. This was especially true for agriculture as it often required a large amount of investment over an extended period of time, Ngan said.

Deputy head of the Central Committee for Business Reform and Development, Pham Quoc Doanh, said both central Government and local authorities had not provided sufficient incentives for private businesses to invest in agriculture. The country also lacked an agricultural insurance scheme, which according to Doanh, was a big hindrance to businesses. Other experts said it could be impossible to penetrate the global market with just 10 million farmers,

Truong Van Hien, chairman and director general of a company specialising in agricultural production, recommended that businesses participate in the national target programme by helping farmers set up large-scale production.

Hien said that not only would this create more jobs for farmers, businesses would also purchase their products, creating a sustainable model for development.

Representatives from localities also recommended that other investment methods should also be considered such as public-private partnership and build-operate-transfer.

Experts also urged the Government to create incentives to attract more investment from the business sector as well as implementing support policies for businesses. — VNS