Risk-sharing key to agro growth

The success of agricultural restructuring, including the establishment of new rural areas, depends on greater co-operation and risk sharing between different stakeholders, experts say.



An expert tests sugar cane seedlings at the Lam Son hi-tech farming research centre in the central province of Thanh Hoa. The application of new technologies is crucial to agricultural restructuring.


The application of new technologies was also crucial, they said at a forum on enterprise development in the agriculture industry held in Ha Noi on September 8.

Nguyen Van Binh, head of the Party Central Committee's Economic Commission, who chaired the forum, said Viet Nam had a lot of ideal conditions to develop its agriculture industry, but for several decades, the sector's growth had been based on overuse of production inputs, human resources and natural resources.

Furthermore, production was mostly on a small scale, and the development of agricultural enterprises had been slow. These factors compromised sustainable development and safety, led to low-added-value of agricultural produce as well as lower profits, Binh said.

Many experts at the forum agreed with Binh. They noted that households continued to be the main unit of agricultural production, and the development of cooperatives had been sluggish. The lack of co-operation between farmers and enterprises also undermined the sector's growth, they said.

They also noted that 90 per cent of farming, forestry and fisheries enterprises were small and medium sized units.

Disproportionate investment

While agriculture accounts for 17.7 per cent of the national GDP (2014), it receives just five per cent of total investment, according to experts.

To redress this imbalance, agricultural enterprises should actively co-operate with partners in the supply chain and promote application of advanced technology in production and business, they added.

Vo Tri Thanh, former deputy director of the Central Institute for Economic Management (CIEM), said agricultural production and business was constrained by many factors including dependence on weather conditions, short shelf-life of farming produce and low agricultural insurance cover. The application of advanced technologies would help reduce these constraints, he said.

 "The state should create favourable conditions for investment in infrastructure as well as technology development for agriculture, and support enterprises in the sector on the principle of sharing risks with them," Thanh said.

Agriculture and Rural Development Minister Nguyen Xuan Cuong assured the forum that his ministry would help attract more private investment into the sector by helping enterprises solve existing difficulties in production and business, especially enterprises that: have production greements with farmers, process farming produce, make a variety of agricultural materials, and employ people in rural areas.

Cuong said his ministry would increase interactions with enterprises towards solving their difficulties and completing policies on attracting investment into agriculture and rural areas.

The ministry would also improve quality of planning for agricultural, forestry and fisheries production. It would also enhance the management of agricultural land use plans.

Besides attracting more investment from enterprises and large economic groups to value chains in production, the State should develop areas specialized production areas, said Dang Kim Son, former director of the Strategic Institute of Agriculture and Rural Development.

He called for a "breakthrough" in land policies that would help obtain land for enterprises to invest in. This should be done in way that does not affect food security, he added.

Several speakers at the forum called for Government help in the application of advanced technologies by farmers as well as enterprises, shifting away from traditional farming methods.

To add value to agricultural produce and products, increase capacity as well as incomes, the State should expand investment in infrastructure and establish areas that specialise in hi-tech agriculture.

The Government should also provide financial and technical support for organic farming, they said. 

VNS

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