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HCMC gears towards high-tech agriculture with $114 mln plan

It's a big price to ask for a sector that has previously failed to attract major investment.

Ho Chi Minh City is calling for investment in a high-tech agricultural development program that is expected to cost VND2,6 trillion ($114 million) as the city aims to boost its agricultural output.

Authorities are hoping to draw 53 percent of the investment from the state budget and 47 percent from the private sector for the five-year plan.

In the first year, the city plans to spend VND2,1 trillion ($92 million) on building a high-tech agricultural zone and a biotechnology center, in addition to staff training.

The city will send staff overseas to countries with developed agriculture sectors such as Israel, the Netherlands, the U.S., Japan, Thailand and South Korea for short and long-term training. This part of the project is expected to cost VND28.5 billion ($1.2 million).

The city expects agricultural products cultivated using hi-tech methods to account for at least 60 percent of the southern hub's total agricultural output value by 2020.

Under the plan, up to 50 to 60 percent of farmers and 70 to 80 percent of enterprises are expected to adopt new cultivation techniques and post-harvest technology, along with mechanized and automated livestock breeding and waste treatment methods.

HCMC has already completed the first phase of a high-tech agricultural zone with an 88-hectare park in Pham Van Coi Commune, Cu Chi District.

The city is aiming to expand the area to 570 hectares by 2020 while offering preferential policies to attract investors to the zone’s new facilities.

State leaders and experts have been calling for the application of science and technology in agriculture to tackle low quality, productivity and efficiency to steady the unstable sector, which relies heavily on the Chinese market.

At the same time, the sector is facing the impacts of climate change, especially saltwater intrusion and landslides that have led to the loss of farmland.

Development experts said moving towards a high-tech growth model will improve productivity, quality and competitiveness.

Vietnam’s agriculture sector is dictated by natural conditions and there is a lack of cooperation between local producers as well as the infrastructure to develop, especially in urban areas.

Current investment in science and technology research is VND25,000 (around $1.1) per hectare on average, according to reports from the Ministry of Agriculture. This figure is far lower than other regional countries, highlighting the need for more policies to encourage cooperation models to develop value chains that link production, processing and ultimately sales.

Vietnam's agricultural sector also appears unappealing to foreign investors with the proportion of investment in agriculture remaining modest, though it has increased over the last few years. Data from the Foreign Investment Department show that only 1 percent of foreign funds pouring into the country go towards cultivating its agriculture sector.

As of September this year, there were 518 FDI projects involved in the field, accounting for just 2.4 percent of the total number of projects. Each agricultural project costs $6.7 million on average, while the average investment capital for FDI projects stands at $14.7 million.

Last year, one percent of total FDI was spent on agriculture, up 0.4 percent against 2012.

Source: VnExpress