Businesses have been identified as one of the factors for agricultural restructuring in Vietnam but only 1% of domestic enterprises have invested in this sector, heard a conference in Hanoi on Sunday.

Deputy Prime Minister Hoang Trung Hai (C) speaks at a conference on agriculture investment promotion in Hanoi on Sunday.

Minister of Agriculture and Rural Development Cao Duc Phat told the conference on investment promotion for agriculture that though many supporting policies have been issued to attract investors to agriculture, investments made by private firms in the sector have remained insignificant.

Data of the ministry showed that last year the proportion of corporate investments in agriculture made up only 1.01% of the total number of operational enterprises nationwide. However, these enterprises were mainly of small size and the investors whose capital was smaller than VND5 billion accounted for 55%.

From 2008 to 2013, 3,486 agricultural enterprises were established but nearly 475 of them were dissolved. Besides, most of the exisiting enterprises exploited natural resources and did not invest much in high technology and modern equipment.

Phat bemoaned that loose cooperation among enterprises, scientists and farmers has hindered agricultural development. 

According to delegates at the conference, agriculture has been the only sector to run a trade surplus. However, since 1986 when economic reform was initiated, Vietnam has been able to use natural resources and farmers to compete with other countries.

But agriculture cannot develop sustainably with the old model and technology as customers now demand higher product quality. The pivotal role should be taken by farmers and enterprises.

Enterprises that can help solve the three major problems of the agricultural sector related to consumption markets, investment capital and application of modern technologies. But investors complained about a host of challenges, including lack of vast land lots, credit and tax incentives. 

At the conference, the ministry introduced a club of agricultural investors with the participation of the ministry’s agencies, around 30 big investors in agriculture and eight provinces pioneering agricultural reforms.

The corporate members include Vinaseed, Dabaco, T&T, Hoa Phat, Trung Thanh, TH True Milk, VinaMit, Trung Nguyen, Vingroup, Viettel, FPT, Vinh Hoan and Minh Phu.

The club is seen as a new form of public-private partnership in Vietnam. Activities of the club are connected to the eight provinces determined to restructure agriculture and picked by the ministry to pilot restructuring, including Lao Cai, Nam Dinh, Thanh Hoa, Ha Tinh, Binh Dinh, Lam Dong, Dong Thap and Quang Ninh.

The club also works closely with the steering committee for agricultural restructuring and helps management agencies work out supporting policies for investors.