New policies drafted to encourage investment in agriculture
New policies drafted to encourage investment in agriculture
The Ministry of Planning and Investment (MPI) is drafting a decree to support the development of enterprises investing in agriculture and rural areas in a bid to draw investment into the sector.
According to the MPI, new policies are needed to encourage enterprises to invest in agriculture and rural areas and take advantage of new opportunities for Vietnamese agricultural products under the EU-Viet Nam Free Trade Agreement (EVFTA).
The new decree, which will replace Decree 57/2018 on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas, is also aimed to ensure compliance with recently issued laws like the Law on Public Investment in 2019, the Law on Investment in 2019 and the Enterprise Law in 2020.
In addition, the decree is expected to help respond to emerging problems in agricultural production, including a sharp increase in domestic pork prices (4-5 times higher than the pork price in the US) and serious impacts of the COVID-19 pandemic.
In the draft, the MPI estimates the investment capital demand of the agricultural industry in 2021-25 is VND107 trillion (US$4.6 billion), of which VND8.6 trillion is slated to come from the State budget to implement roughly 800 projects. The investment capital from the State budget is expected to help attract about VND9 trillion from enterprises investing in agriculture and rural areas as a domino effect.
The MPI expects the aid from the State budget to bring many economic, social and environmental effects. If 100 agricultural enterprises with an investment capital of about VND100 billion each are set up yearly, at least 10,000 direct jobs and 30,000 indirect jobs will be generated, the ministry estimated.
The projects are expected to help build processing establishments for agricultural produce with waste treatment technologies in rural areas to protect the environment and create jobs and incomes for rural labourers, towards sustainable rural development.
Under the draft decree, the State aid will focus on farming and processing of agricultural products, forestry and fishery products; planting and protecting forests; making salt; producing plant seeds, livestock breeds and biotechnology products.
The incentive policies will also aim to expand the market for stable consumption of agricultural products, contributing to the speedier restructuring of the agricultural industry.
