New Plans To Modernize Farm Produce Processing
The Department of Agro-Forestry-Fishery Product Processing, Trading and Salt Industry of the Ministry of Agriculture and Rural Development recently opened a consultation to attract suggestions for improving a plan to promote investment in agricultural and forest product and seafood processing from businesses, occupational associations and agriculture management agencies’ leaders in southern Vietnam. Most of the asked organizations and individuals support the plan while giving suggestions based on their experiences.
Achievements
Doan Xuan Hoa, the deputy head of the Department of Agro-Forestry-Fishery Product Processing, Trading and Salt Industry, said that along with agricultural and forest product and seafood production development, agricultural and forest product and seafood processing grew 14-15 percent per year, contributing to helping Vietnam reach an agricultural and forest product and seafood export revenue of US$16.475 billion in 2008 , double that of 2005. Many products have improved value after being processed. Rice, coffee, seafood and wood products are exports that yielded more than US$1 million each per year. Many agricultural and forest product and seafood processing facilities now have modern equipment and technology and a central raw material production area. They make products in accordance with market demand and are contributing greatly to transforming the agricultural and rural economic structure towards industry and services.
But, what the agricultural and forest product and seafood processing industry has achieved is disproportional with potential. Planning and planning management remains ineffective, while technology renovation is still tardy, product added value and competitiveness modest, production remains unsustainable and food safety and hygienic standards are not well observed in a number of businesses. A close relation between the processing industry and raw material production and the market has not been developed. A reason of this is that the processing industry is still influenced by small-scale, scattered agricultural production, some sectors and authorities’ awareness of the processing industry’s importance in unilateral, proper investment in the processing industry does not exist, and policies on encouraging investment in the industry remain problematic and therefore do not work well in attracting investment from different economic sectors.
To solve the problems, the Ministry of Agriculture and Rural Development assigned the Department of Agro-Forestry-Fishery Product Processing, Trading and Salt Industry to construct a plan for encouraging investment in the agricultural and forest product and seafood processing industry. After improvements following suggestions of businesses, occupational associations, experts and relevant sectors and ministries, the plan will be submitted to the Ministry of Agriculture and Rural Development for approval in the first quarter of 2010. Increasing the rate of processed goods to 70 percent of all products of the same kind in 2020, improving processed product quality and reducing the rate of preliminary processed goods are major objectives of the plan.
New policies
Agricultural and forest product and seafood processing development should relate to raw material production and market development.
Under the plan, organizations and individuals, which have a project to construct a central raw material production area in accordance with an approved plan and where the project has been licensed by the relevant authority, would be permitted to buy land use rights from farmers to produce raw materials on the related land.
The plan encourages farmers to purchase shares of a processing business with their own land use rights and cooperate with the business in raw material production.
The plan says that organizations and individuals investing in developing a central raw material production area could access preferential loans from credit institutions. Specifically, they could have to pay no interest in the first two years of the project and benefit from a 50 percent reduction in the loan interest rate from the third year to purchase soil excavators, and sowing, cultivating, nursing and harvesting machines, and buy materials needed to prepare a drying yard of 1,000 square meters or less. After that the investors could be assisted in accordance with Government Resolution 48/NQ-CP dated September 23, 2009.
Under the plan, the State could invest in developing infrastructure in and around a central raw material production area, including roads, irrigation projects, canals, power networks and aquaculture infrastructure with capital that could represent up to 60 percent of an investment project’s total capital.
The plan says that processing businesses from different economic sectors, which realize intensive investment, expand production, renovate technology and create products with a high added value, could have access to preferential credit in compliance with Government Decree 151/2006/ND-CP dated December 20, 2006 and Government Decree 106/2008/ND-CP dated September 19, 2008. In addition, they might be prioritized in receiving land for environmental pollution treatment and have access to a loan from an environmental fund to construct environmental pollution treatment projects. These businesses could be freed from tax applied to equipment and machinery that cannot be made in Vietnam and comprise fixed assets.
If the businesses have a project to procure a new production line and increase production scale and capability, including activities that help improve the ecological environment, they could be freed from tax related to the income to be earned from their new investments.
According to the plan, occupational sectors could be allowed to establish a development fund and a risk control fund using part of their business pre-tax income, while plans for establishing, managing and using those funds would be approved by the Prime Minister. /.
Tags: Vietnam agriculture
Posted by VBN on Jan 19 2010. Filed under Agriculture. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
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