Investment in agricultural sector remains modest

HCM City (VNS/VNA) - The Government and the banking sector are paying more attention in enabling those involved in the agricultural sector to obtain loans from the bank, but the number of farmers and agricultural cooperatives to get access to bank loans remains modest, experts said at a seminar held in HCM City on December 27.

Le Duc Thinh, head of the Agency of Cooperatives and Rural Development, said that the bank loans played an important role in the agricultural sector, helping to modernise processing, preservation and trading facilities and other phases involved in value chains.

The country is home to 10 million hectares of arable land, more than 15 million farmer households, and 15,000 agricultural co-operatives.

According to a representative of the State Bank of Vietnam who declined to be named, bank loans in the agricultural sector account for about 15 percent of the economy’s total outstanding loans.

Credit in agriculture remained limited and had not met demand, he said, adding that the number of enterprises operating in the agricultural sector remained low and most were small scale.

“Less than one per cent of agricultural co-operatives have obtained bank loans,” he added.

Tran Hoai Phuong, director of HDBank's corporate customer division, said the bank had set aside a significant amount of money to provide loans to those involved in the agricultural sector and that it was willing to work with agricultural enterprises and farmers to design credit packages at competitive interest rates.

Besides improving loan access, developing efficient linkages in agricultural value chains was also discussed at the seminar.

Such linkages are essential to guarantee sales as well as ensure sustainable development of the sector, according to participants.

Mai Thanh Phung, vice chairman of the Vietnam Farms and Agricultural Enterprises Association, said that 2,900 cooperatives were linked in the value chain. Of the number, 1,200 value chains contained over 1,400 products, mainly vegetables, fruits, egg, rice, and seafood, that had received certifications.

Many programmes that connect agricultural cooperatives and businesses had had encouraging results, but there had still been obstacles to develop linkages, Phung said.

Violations of contracts between businesses and farmers, for example, had been a problem, he said, adding that successful linkages would be a win-win situation for all involved parties.

Everyone in the agricultural sector should work together more closely, and enterprises should take the lead, Phung added.

"In the linkage chain, enterprises play an important role in providing farmers with market information so they can respond to market demand," he said.

“The number of businesses investing in the agricultural sector remains low, at about 12,000 enterprises so the Government needs to have a policy to attract more businesses to invest in the sector,” Phung said./.