A view of the forum (Photo: VNA)

HCM City (VNA) - The Government needs new policies on land pooling and accumulation, as well as credit to develop the farm economy, delegates said at a forum held in HCM City on June 15.

The country has 31,717 farms, of which 16,523 are animal breeding ones. Farmland covers a total of 133,826ha, accounting for 0.6 percent of the country’s total agricultural land.

Nguyen Van Tien, head of the Central Economic Committee’s Agriculture and Rural Department, said although there has been a rapid increase in the number of farms, they are mainly household farms, with an average scale of just 4.54ha.

According to the Ministry of Agriculture and Rural Development, the farm economy is an advanced form of the household economy, bringing higher economic efficiency since farms are applying new technologies and expanding markets for their products.

Vu Trong Khai, an agricultural expert, said the shift from smallholder production to large-scale and modern agricultural production would ensure a safe and sustainable agriculture.

The Government in the past issued many policies to develop farms, but few farmers and businesses benefited from these policies, he said.

Farm owners have encountered difficulties in accumulating land as well as accessing credit to expand their scale, he said at a forum held by the Vietnam Farms and Agricultural Enterprises Association and the Department for Economic Cooperation and Rural Development.

Vo Mai, vice chairwoman of the Vietnam Gardening Association, said capital sources for the agricultural sector remained low compared to actual demand.

As of June 2016, total outstanding loans in the agricultural sector reached an estimate of 886 trillion VND, accounting for 18 percent of total outstanding loans in the economy.

Customers in the agricultural sector have faced difficulties in accessing bank loans due to credit regulations, she said.

For instance, the Government’s Decree 55 stipulates that customers involved in the agriculture and rural development sector can obtain loans at credit institutions without mortgaged assets, but the decree also stipulates that customers must submit their land use certificates to credit institutions when they apply for loans.

They still had to guarantee assets when applying for loans, she said.

Khai said that domestic agriculture was still small-scale and underdeveloped, which does not ensure efficiency, so banks are anxious to offer unsecured loans.

Vo Quan Huy, director of Huy Long An Co Ltd, who has a large banana farm in the southern province of Long An, said his company had to mortgage assets to obtain a loan, but he said the assets were priced by the banks at a level which is too low compared to the market price.

Similarly, Doan Minh Chien, owner of a general farm in the southern province of Binh Duong, said “Each hectare of my farm is valued at 7-8 billion VND at the market price, but the bank values it at just 300 million VND”.

Huy and Chien suggested that the Government and central bank reconsider amending the asset valuation policy.

Tien said household and farm economies would continue to be the base of the country’s agricultural production.

The Government should develop policies to encourage pooling and accumulating land to expand production scale, and develop linkages in agricultural production.

Delegates at the forum said the Government should complete financial and credit policies in the agricultural sector that support individuals and organisations in pooling land. Developing insurance models in agricultural production is also important, they said.-VNA