Experts welcome shift in credit policy for hi-tech agriculture
Hanoi (VNA) - Experts have welcomed a shift in credit policy for hi-tech agriculture to include farmers and enterprises instead of focusing on hi-tech agricultural parks.
However, they warn that without detailed implementation instructions, the move will not be effective.
Prime
Minister Nguyen Xuan Phuc has set aside a credit package of 50-60 trillion VND
(2.2-2.6 billion USD) to encourage local farmers and enterprises to develop hi-tech
agriculture.
Several
experts and representatives of enterprises spoke to the Nong Thon Ngay
Nay (Today Countryside) newspaper this week about the new policy.
Do Ha Nam, General Director of Intimex Import-Export Joint Stock Company in HCM
City, said agriculture firms need significant working capital, but accessing
this has proved difficult.
“There
must be large credit packages with easy, simple borrowing conditions so that
agriculture firms like Intimex are able to use them,” he said.
“Vietnamese
agriculture must be treated on par with other industries,” he said.
To ensure efficiency, performance conditions can be set, he said.
For instance, individuals or units should be able to create production values
of at least 50 million VND per hectare to get permission to invest in the
sector, he added.
Tran Ba Duong, Chairman of the Management Board and CEO of the Truong Hai
Automobile Company, which is interested in agriculture, said the sector cannot
grow without applying the “industry in agriculture” model.
Capital access, organizational and management skills are needed for hi-tech
agriculture to grow, he said.
“Harvesting, transportation and post-harvest processes currently suffer huge
losses and low quality of Vietnamese farm produce,” Duong said, suggesting that
a post-harvest industrial complex be set for rice production.
Vo Quan Huy, Director of the Huy Long An Company in Long An Province, said one
of the biggest difficulties faced by the Vietnamese farmer is mortgage. They
are unable to mortgage their produce, factories and farms as collateral,
according to the regulation, he said, adding that the amount of money they can
borrow is a fraction of real demand.
“In terms of the 50 trillion VND credit package for agriculture, the State Bank
of Vietnam must ‘open its arms’ to enterprises and help them with easier access
to larger loans.”
Role
of banks
The
State Bank of Vietnam has lowered interest rates for agriculture loans over the
past several years.
Accordingly, the rate dropped from 20 percent per year in 2011, to 12 percent
per year in 2013. This year the rate stands at the lowest ever - 6.5 to 8 percent per year.
Since last month, the Agriculture and Rural Development Bank (Agribank) has
been preparing 50 trillion VND to serve individuals, households, collectives
and enterprises producing hygienic, safe food.
Such individuals and other entities can get loans at interest rates of zero to
1.5 per cent per year.
The aim is to develop a green agriculture sector that provides consumers with
high-quality, safe farm produce for consumers.
Three years ago, the State Bank of Vietnam assigned Agribank to lend loans on a
pilot basis to enterprises applying advanced technology in agriculture. So far
28 enterprises with 31 projects in more than 22 provinces and cities have been
selected to participate in the programme.
Agribank general director Tiet Van Thanh said that the bank has implemented
seven credit policies and one national programme for developing new rural
areas. Farmers get priority for loans at lower interest rates, he said.
A representative of the Bac A Joint Stock Commercial Bank said that hi-tech
agriculture projects need huge capital over prolonged implementation periods,
recouping investment takes a long time, profits can be low and there are various
risks involved.
“Very few enterprises will be ready to invest in agriculture if there are no
supportive mechanisms like more flexible capital policies,” he said.
He said that banks should raise lending to agriculture from the current 18-20
percent to over 30 percent of their credit portfolio.
He also suggested stepping up co-operation among commercial banks in offering
loans for big agriculture projects, especially hi-tech ones.-VNA