A flux of investment waves from Japanese businesses are coming to Vietnam’s agricultural sector, which plays an important role in the national development, according to a top agricultural official.
Illustrative photo (Source: VNA)
Nguyen Do Anh Tuan, Head of the Institute of Policy and Strategy for Agriculture and Rural Development , said that Japanese investors have already started roaming around the country seeking investment opportunities in hi-tech farming.
Some have already implemented projects across Vietnam, such as hi-tech vegetable farming in the Central Highlands province of Lam Dong, growing mangoes for export to Japan in the Mekong Delta province of Dong Thap, a hi-tech agriculture project in the northern province of Vinh Phuc and a fishing project in the central province of Binh Dinh.
The Japan External Trade Organisation ( JETRO ) plans to send more delegations to Vietnam and organise workshops to connect enterprises from the two countries in the field, he revealed.
He underscored that Vietnam and Japan see great opportunities for agricultural cooperation, especially when they join a number of bilateral and multilateral free trade agreements, including the Trans-Pacific Partnership (TPP) – a new generation agreement with intensive and comprehensive commitments.
Once taking effect in 2018, TPP is expected to give a push to Vietnam-Japan agricultural investment and trade as it helps open the market for 38.4 percent of agricultural products, 64.8 percent of aquatic products and 17.2 percent of wooden products.
Under the agreement, Japan pledged to immediately remove tariffs on 78 percent of Vietnamese agricultural export and the figure will be 88.5 percent in the next 5-6 years.
This is a good chance for Vietnam to expand its export market, increase its access to major markets in the world, and join the global supply chains, Tuan said.
TPP also offers opportunities for Japanese firms to invest in Vietnam’s agriculture to take advantage of tariff incentives, abundant natural resources and cheap labour, he added.
According to Tuan, with their advantages in technology and market access, Japanese businesses can invest in material-manufacturing fields such as machinery, fertiliser and pesticides. They can also look into support industries like packaging, preservation equipment, glass and net houses, fine and deep processing and agricultural by-product processing.
They can also pour cash into developing agricultural science and technology such as biotechnology, mechanical engineering, preservation and processing technology.
He suggested Japanese companies join hands with local enterprises to build large-scale fields and develop complete value chains and brands in domestic and international markets.
Agricultural infrastructure is an area that Japanese firms could participate in, he added.
To boost investment flows from Japan, Vietnam needs policies to remove enterprises’ difficulties such as developing land funds for businesses and completing infrastructure, Tuan said, adding that local governments should be more proactive in supporting enterprises.
The country should focus on developing small- and medium-sized enterprises who can cooperate with Japanese companies in production, processing and distribution, he stressed.