Experts said obstacles relating to land, administrative reform and taxation needed to be tackled in order to draw more FDI in agriculture. - Photo tintucnongnghiep.vn

HA NOI (Biz Hub) — Measures to deal with problems related to land, infrastructure, taxation and administrative procedures were among the key issues discussed during a conference in Ha Noi on July 13.

The consultative meeting was held to elicit experts' opinions on formulating a draft decree on policies to encourage foreign investment in agriculture.

A representative from Nestle Viet Nam said foreign investors face the first obstacle while investing in agriculture when it comes to issues related to land. Land clearance and compensation procedures, regulated by Land Law, pose difficulties, he said.

Besides, some businesses sign contracts with farmers to take their land on lease, but many farmers breach the contracts, thus discouraging investors, he said.

He proposed that the draft decree clarify the concept of investment in hi-tech agriculture and grant of tax exemptions to such investors.

A representative from Syngenta Viet Nam, a wholly foreign-owned company, said the firm had invested in a rice breeding research centre in the northern province of Nam Dinh and in a plant protection chemical research centre in the Mekong Delta province of Tien Giang.

However, the company could not lease land from farmers to test these centres' products because it did not fulfil current regulations, he said.

He suggested that the draft decree include measures to help foreign companies get better access to land so that the company could acquire land to produce different varieties of rice in Viet Nam.

Tran Thi Thanh Tam from the Viet Nam Chamber of Commerce and Industry said Viet Nam had signed many free trade agreements and would sign more to increase opportunities for exporting Vietnamese farm produce. However, local businesses should prepare to meet product quality standards, which were technical barriers put up by other countries, she said.

The decree should contain policies to encourage businesses to invest in hi-tech agriculture and in technology to process harvested produce, she said.

Preferential policies are also needed to encourage businesses to invest in agricultural infrastructure, she added.

A representative from the Japan International Cooperation Agency said Japanese investors paid great attention to food hygiene and safety, so it was essential to have mechanisms to accord priority to these issues.

Many of the participants pointed to the need for measures to strictly implement contracts between businesses and farmers, and the need to have a system to collect and process feedback from businesses.

According to the Ministry of Agriculture and Rural Development figures, foreign direct investment (FDI) in agro-forestry and fisheries accounts for just 0.6 to one per cent of the investment in the country.

By October last year, there were 516 FDI projects in agriculture, with a total registered investment capital of US$3.6 billion -- equivalent to three per cent of all the FDI projects and 1.5 per cent of the registered FDI capital in the country, according to the Ministry of Planning and Investment's Foreign Investment Agency.

The scale of FDI projects in agriculture is small -- an average of $6.6 million per project. The figure in case of other industries stands at around $15 million on an average. — VNS