Investors fuel hi-tech agricultural revolution

Influx of investment

On the first working day after Lunar New Year, Prime Minister Nguyen Xuan Phuc pressed the button to launch production at hi-tech VinEco farm in Ha Nam, which was invested by Vingroup Joint Stock Company. This demonstrates the government’s support of hi-tech agricultural development in Vietnam.

In Ha Nam, many big enterprises have invested billions in hi-tech agriculture. One example is Vingroup’s VinEco farm with a total investment of about VND300 billion ($13.24 million). The farm has total acreage of 180 hectares, 130 hectares of which is used as a large-scale field model, five hectares as a greenhouse area using Israeli technology, and the rest houses manufacturing support facilities. It is anticipated that at the end of 2017, VinEco Ha Nam will complete all facilities and start to produce in all areas.

Not only Vingroup, but many other giants have also been investing in hi-tech agriculture, such as Hoa Phat Group Joint Stock Company, Truong Hai Auto Corporation, and FPT. It is hoped that these leading investors can affect radical change and improve traditional agricultural methods.

After the successes of Ha Nam, numerous locations also called for agricultural investment. Minister of Agriculture and Rural Development Nguyen Xuan Cuong expressed his excitement: “Never have so many people paid attention to agriculture, when many companies invest in agriculture. We hope to see a breakthrough in Vietnamese agriculture thanks to the investments in science and technology.”

Tran Ba Duong, chairman of Truong Hai Auto Corporation, a new investor in the agricultural sector, has shared plans of a hi-tech rice paddy field model in a northern province. Duong explained that without agricultural industrialisation and sufficient government financing, it is very hard for farmers to successfully apply science and technology. Therefore, he thinks that Thaco has a responsibility to help.

Nguyen Xuan Cuong stated that agricultural investments are not only a means of helping the economy but are a sensible financial decision. In fact, in the Netherlands, GDP per capita is $58,000/year and farmer makes $55,000/year. In the case of Vietnam, experts believe that farmers can earn up to $5,000 a year if the agricultural value chain is built up correctly.

Government solutions in 2017

Hi-tech agricultural development can solve the problems of climate change and improve the quality of the produce at the same time. However, the Minister of Agriculture and Rural Development admitted that there are many shortcomings in the Vietnamese land policy, the biggest of which is the limited area available for individuals and companies to cultivate on, as restricted by the Land Law 2013.

To remedy this, the PM said the government will report to the National Assembly about the adjustment of the Land Law 2013, based on proposals submitted by many localities. He also requested the related agencies to finish adjusting the decree encouraging agricultural and rural investment by March.

The PM said he would allow increasing the credit package for agriculture from VND60 trillion ($2.65 trillion) to VND100 trillion ($4.41 trillion), and assigned the State bank of Vietnam to mobilise banks to do this together. At the present, LienVietPostBank has joined the programme by announcing its credit package of VND10 trillion ($441.4 million) and offering preferential interest rates for those wishing to develop agriculture.

The VND100 trillion credit package and legal adjustments are expected to may be the catalyst for a lot of agricultural investment in 2017.

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