Minister points out three big challenges of Vietnam’s agriculture

Minister of Agriculture and Rural Development Bui Xuan Cuong yesterday pointed out three big challenges of the agriculture industry, including small scale production, climate change and stronger competition from free trade agreements (FTAs).

The filed photo shows a farmer harvesting rice in a large scale paddy field in the Mekong Delta (Photo: SGGP)

He was quoting speaking at a seminar co-organized by the ministry, the Economic Commission of the Central Party Committee and the Vietnam Chamber of Commerce and Industry (VCCI).

The first challenge, according to the minister, is small scale and scattered faming production, raising difficulties in science and technology application to increase output and value chain development.

At present, the country has 13 millions of households attending in agricultural production. Farming area averages 0.3 hectare a household.

The second challenge, he said, is climate change which has changed worse than forecast in 2012.

Disadvantageous weather conditions have caused rice output reduction of 1.3 million tons in the Mekong Delta, the largest rice farming zone of the country, during the first six months this year.

If there is no production reorganization, the agricultural industry will see more damage rather than only growth slowdown.

The third challenge is severe competition from FTAs which have opened the door to foreign firms to enter the local market. If Vietnam doesn’t reorganize farming production and speed up modernization, it might lose in the domestic market, Mr. Cuong believed.

Head of the Central Economic Committee Nguyen Van Binh said that Vietnam’s agricultural growth rate has been lower than other nations’ of the same production level in the region.

That is because of small scale production by households scattered across the country, slow development of cooperatives, businesses’ small investment in agriculture and rural development.

Only 3,800 out of the total of 420,000 businesses invested in the field in 2014. It reduced to 3,600 ones in the following year.

VCCI chairman Hoang Quang Phong said that although the number of businesses invested in agriculture increased from 2,400 in 2007 to 3,600 in 2013, the ratio reduced from 1.6 percent to 1 percent.

The rate of loss-making agro-aqua-forestry firms quickly increased from 12.6 percent in 2007 to 16.4 percent in 2008 and 35.1 percent in 2013.

Businesses have not interested in agriculture because problems and barriers in policies to attract and assist investors, he added.

Sharing the same view, economic expert Vo Tri Thanh attributed the situation to issues in business environment, property rights, ownership, capital and land markets and high costs.

Dr. Nguyen Viet Loi, head of the Financial Strategy and Policy Institute under the Ministry of Finance, proposed to focus on luring investors from various economic sectors, especially foreign direct investment, to agriculture and rural development.

In addition, priorities should be given to processing industry and rural infrastructure developers.

By Ngoc Quang – Translated by Hai Mien

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