Special incentives in pipeline for agricultural investors
Special incentives in pipeline for agricultural investors
In a move to attract more private investment to the agriculture sector, Vietnam is mulling over offering a series of special incentives in terms of land-use fees and favourable loans for such projects.
Yesterday afternoon, the Ministry of Agriculture and Rural Development (MARD) held a seminar to collect comments for the latest version of a draft decree on incentives for the farming sector, which will replace Decree No.210/2013/ND-CP.
"Decree 210 has proved problematic. There remain many problems in the agriculture sector due to reliance on small and retail households, thus having low productivity, market access difficulties, and low added value," admitted Nguyen Xuan Cuong, Minister of Agriculture and Rural Development.
“The two key tasks will focus on agriculture restructuring towards increasing added value chains and dealing with the weaknesses of the sector, mainly processing and market access. We will also promote sci-tech applications amid the increasing global integration," he added.
Under this draft decree, a firm that has a project with special investment incentives will be exempt from land-use fees, while those having a project with investment incentives will enjoy a 70 per cent reduction in land-use fees.
This draft also includes financial support for agricultural businesses. Accordingly, a firm investing in an agriculture project with special investment incentives and investment incentives, and accepting land-use rights of households and individuals as capital contribution to develop a material area will get a financial support of VND50 million ($2,270) per hectare to develop infrastructure for the area.
In terms of credit policies, a business investing in an agriculture and rural development project will get local support for the interest rate for their commercial loans, once the project is completed.
Specifically, local support for interest rate payments will have a maximum term of eight years for agriculture projects with special investment incentives and six years for projects with investment incentives.
The borrowing cap with interest rate support is not higher than 70 per cent of the project's total investment.
This draft also includes big support for startups in the sector. Accordingly, they will be exempted from water surface and land rental fees from the moment their projects are put into operation. Startups will also be exempt from import duty for machinery and equipment for their project.
There are also many other special financial supports for research, transfer, and application of high-technology in agriculture, for human resources training and market development, for investments in dairy cow and high-yielding cow projects, for investments in slaughter houses, for grown-forest processing projects, for investment in agro-forestry-fishery processing and preservation facilities, and for investments in agriculture and rural development infrastructure.
Both local and foreign firms can benefit from the special incentives, according to the draft.
MARD expects to submit the draft decree to the government for approval in September, contributing to making the sector more attractive to private investors.
According to the ministry, the number of businesses investing in agriculture remains modest. As of September 2016, the country had 4,424 businesses in the sector, making up less than 1 per cent of the country's total.
