New incentives come to agriculture sector

Private investment in agriculture is still very limited, Photo: Le Toan

Prime Minister Nguyen Xuan Phuc told hundreds of firms and farmers at a dialogue with them held last week that to lure more investment into the agricultural sector, the government will enact a new decree on incentives for agricultural and rural investments in April, replacing the existing Decree No.210/2013/ND-CP issued in 2013.

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan told VIR, “This new decree will be comprehensive in favour of agricultural investment, as it offers unique and special incentives to investors and firms, both domestic and foreign.”

Specifically, enterprises with high-tech projects will be supported by the state in terms of infrastructure works like roads, electricity, water, and waste treatment within the projects’ boundaries, as well as simplified administrative procedures. Notably, projects with specially prioritised and/or specially encouraged investments will be exempted from land and water surface rents during the project’s lifespan.

Projects with prioritised investments will be exempt from land and water surface rents for the projects’ first 15 years of operation. These projects will also be given a 50 per cent reduction of the rents for seven subsequent years. Projects with encouraged investment will be exempted from land and water surface rents for the projects’ first 11 years of operation. A 50 per cent reduction of the rents will also be offered to these projects for the five subsequent years.

Besides, firms will be supported with a maximum VND5 billion ($222,000) for piloting new products and applying new technologies in their projects. Businesses will also be supported with 70 per cent of human resources training costs, as well as 50 per cent of advertising and market development. All financial support will come from state coffers.

According to the Vietnam Association of Advanced Technology Enterprise in Agriculture, which represents over 30 high-tech agricultural firms, firms are eager to see such a decree enacted, as there are currently almost no specific incentives for them.

Investors are currently also required to complete at least 12 types of procedures with 16 implementation stages and 40 types of documents before they can implement an agricultural project in Vietnam.

A source from a Swiss-backed agricultural firm in Vietnam suggested that foreign firms be allowed to directly rent land from farmers for pilot plant variety projects.

“In the current Law on Land, foreign firms are not allowed to directly rent land from farmers, only from industrial or export processing zones. But they can’t rent land from the zones because their projects must be cultivated on fields,” the source said.

India’s Ambassador to Vietnam P. Harish told VIR that Vietnam has great potential for agricultural development, and a good policy will help Vietnam lure more foreign agricultural investments. “Under our analysis, 40 per cent of our two countries’ trade is in agriculture. Some Indian agricultural firms have come to Vietnam to find trade and investment partners.”

The new decree, drafted by the ministries of Agriculture and Rural Development and Planning and Investment, will replace the existing Decree No.210/2013/ND-CP issued in 2013, before the laws on Land, Public Investment, Investment, and Construction were revised. Thus, since these laws took effect, it has been very difficult to put Decree No.210 in practice, as many regulations are inconsistent between the decree and the laws, keeping investors from agricultural projects in Vietnam.