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Agriculture yet to majorly benefit from State policies   2008-09-15 - Viet Nam News

The agricultural sector is struggling to reach its full potential under current policies, experts are saying.

"The Government needs to have policies to expand the farmland area, issue policies to develop the rural economy, including large-scale fish farming".

"The policies, mechanisms, and procedures related to land create no favourable conditions for farmers and enterprises at all," said Professor Vo Tong Xuan, rector of An Giang University.

"In addition, agricultural land is split and this makes it difficult for investors to have the desired area."

According to Pham Dinh Thuy, a senior official of the General Statistics Office, the rural labour force accounts for 70 per cent of the national labour force and the agriculture industry thus has a great advantage to develop agricultural enterprises.

There are 40,000 enterprises functioning in rural areas, accounting for 30 per cent of the total in the country. However, only 1,500 enterprises, or just one per cent of the total, operate in agriculture and fishery.

In 2007, foreign direct investment (FDI) in agriculture accounted for just 5.4 per cent of the total investment in all enterprises.

This year, although the FDI inflows have hit record levels, the average capital per project in agriculture is much lower, at US$7.2 million, than the $45.4 million in other industries.

"Poor infrastructure, including the electricity network, irrigation, and transportation, is keeping investors out of the sector," said Dang Kim Son, Director of the National Agriculture and Rural Development Strategy and Policy Institute.

Low productivity and uneven distribution of rural labour also contributes to the problem.

"FDI in agriculture goes down because foreign companies find it much more difficult to collect produce than local companies," said Pham Thi Thu Hang, Director of the Institute for Enterprises Development.

"In addition to agro-product processing companies, raw materials play a decisive role. However, companies are having to collect it from individual households and therefore there is a great variability in material quality, which in turn greatly affects investors’ decision-making," she added.

"The Government needs to have policies to expand the farmland area, issue policies to develop the rural economy, including large-scale fish farming," said Nguyen Lam Vien, Director of Vinamit Viet Nam, a company specialised in desiccated agricultural products.

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