Attracting FDI to the agricultural sector

It is not difficult to recognise causes leading to the recent reduction of FDI in agriculture. Poor structuring of the system for agricultural investment has discouraged investors while the number of skilled agricultural workers is still low. In addition, there are too many steps in licensing investment, production and general business among the MPI, the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Industry and Trade.

In the above-mentioned situation, FDI attraction to agriculture is still assumed to be positive and able to increase sharply in the future. When negotiating the Trans-Pacific Partnership, Vietnam saw many countries looking to become its crucial agricultural partner. However, it is not easy to accomplish this task.

To find appropriate solutions to revive the agricultural sector's attraction of FDI, a series of macro-level policies and actions have been taken. The MARD has boosted the implementation of a scheme on agricultural restructuring. Notably, the scheme on improving the attraction and management of FDI in agro-forestry-fisheries in the 2015-2020 period with a vision to 2030, has drawn great attention from international organisations and foreign enterprises and groups. Many countries consider Vietnam as a new destination for agricultural investment and this opportunity should be grasped with proper preparations.

Seeking the gold key to FDI

FDI in agriculture has seen positive developments with numerous new projects in agriculture in the north, the south and the Mekong Delta region in particular. Agriculture has become attractive to many businesses from Japan, a country with a green economy and sustainable environmental protection, appropriate for Vietnam. After a meeting between leaders of the State and the MARD with Japanese leaders in June, Japanese Minister of Agriculture, Forestry and Fisheries Yoshimasa Hayashi visited the country and met with Minister of Agriculture and Rural Development Cao Duc Phat to discuss agricultural co-operation between the two countries. Numeous business delegations from Japanese localities have also visited Vietnam to seek investment opportunities in agriculture.

Explaining Japanese enterprises' recent great attention to Vietnam's agriculture and food sectors, economic experts said that Japan's policy on local agriculture has seen fundamental changes as the country has joined trade agreements with other countries, including Vietnam. Natural conditions for agricultural production make Vietnam an ideal choice for them. Nearly 70% of Vietnam's population, including the young labour force, is in rural areas but the country's agriculture system is outdated - including cultivation, harvesting, processing, preservation and product distribution meathods. Vietnam and Japan clearly have the conditions to benefit each other.

Meanwhile, the Korea Rural Community Corporation (KRC) of the Republic of Korea and the Dong Thap provincial People's Committee have recently signed a public-private partnership agreement on agriculture, in which the KRC is responsible to mobilise the RoK's official development assistance sources and multilateral funds to provide equipment to mechanise rice production on a 20,000ha area in Dong Thap province.

According to Vice Chairman of the Ben Tre provincial People's Committee Cao Van Trong, among 47 effective FDI projects in the province were two projects of Thailand and one of France, investing in agricultural product processing.

Ben Tre province has improved the quality of administrative reforms to attract foreign investors while actively contacting each investor in certain projects without organising promotion activities such as general workshops and conferences, keeping in touch with investors and providing necessary information promptly. Promotional activites are only conducted for feasible projects.

Drastic restructuring in agriculture and flexible solutions for localities are expected to be the golden key to the flow of FDI into the country's agriculture.

Master Dang Kim Son from the Institute of Policy and Strategy for Agriculture and Rural Development said reduntdant capital around the world is a golden chance for Vietnam to attract investment in agriculture. Large groups have paid great attention to Vietnam's agriculture, noticing the sector's potential. Despite limited investment, many agricultural products of Vietnam have held leading position on the world's export list. If further changes are made to investment encouraging policies, more foreign investor will be attracted to the country's agriculture.

(Source: Nhandan Online)