HÀ NỘI – Additional legal framework is needed to speed up the restructuring of State-owned plantations in Việt Nam, Deputy Minister of Agriculture and Rural Development Hà Công Tuấn has said.

The Politburo of the Communist Party of Việt Nam and the Government issued a resolution and decree on State-owned plantations two years ago as the plantations did not operate as effectively as expected, causing wastage to State-resources, particularly in land and funding use, according to the official.

As many as 150 agriculture companies and 134 forestry companies owned by State are subject to restructuring. However, until the end of last month, 14 of those companies had not completed their restructuring plans or their revised plans had not been approved by the Prime Minister, Tuấn said at a conference held on Thursday.

By the end of last year, State-owned agriculture and forestry companies across Việt Nam had a total asset value of VNĐ40.517 trillion (US$ 1.81 billion), and average pre-tax profit in the period 2012-2014 was VNĐ2.797 trillion ($125.41 million).

Their accumulated losses totalled VNĐ1.071 trillion (US$48 million), accounting for four per cent of equity.

Deputy Minister Tuấn said at the conference reviewing the plantation restructuring that localities across the country were struggling to find direction for future development.

He said that the Government’s decree on restructuring of State-owned plantations – Decree 118/2014/NĐ-CP – should be reviewed and amended.

For example, regulations on the bankruptcy of agriculture and forestry companies, and mergers and acquisitions (M&As) of such companies should be added to the decree.

The shortage of funding for measuring land areas that the State-owned plantation are managing also hindered the restructuring, localities reported.

The Government planned to allocate VNĐ 1 trillion (US$44.84 million) for localities to measure and re-identify boundaries of State-owned farms but until now, just VNĐ450 billion ($20,170) has been disbursed.

Localities revealed they were unable to arrange funding for the measurements as they faced financial difficulties.

Deputy Prime Minister Vương Đình Huệ said that the restructuring was important to avoid the waste of land and forest, as well as to increase the turnover of agriculture and forestry production.

He asked relevant agencies to study and boost reforestation in areas where trees had been chopped down to make room for hydropower plant projects.

In cases where there is no land remaining for reforestation in localities where hydropower plans are located, the plant investors must give the localities money for reforestation in other places, he said.

By June 20, the country had planted 23,622 hectares of forest, 11,338 hectares of which were contributed by hydroelectricity projects. -- VNS