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Investments shifting to agriculture

Major businesses have been shifting their investments to agriculture in recent years though the sector is full of risks and promises little profit.

The shift of capital flows to agriculture has been seen in recent years at many enterprises like Hoang Anh Gia Lai, TH Milk, Thanh Thanh Cong and Thu Duc House which are traditionally active in the property and banking sectors.

Vietnam Seedling Association chairman Tran Dinh Long said these enterprises have gained success thanks to the large scale of their investment in the right things at the right locations; and the establishment of a value chain.

Commenting on foreign enterprises’ plans to invest in Vietnam’s agriculture like Japanese firms in catching and processing tuna, Long said Vietnam has diverse natural resources and typical tropical climate conditions not found elsewhere.

Vietnam has a wide range of plants, animals and fish. Besides, nearly 70% of the country’s population is in rural areas, which supplies abundant labor for the sector, according to Long.

However, Vietnam’s agriculture is facing huge challenges as it focuses too much on quantity but little on quality, while technology is outdated, production is poorly organized, input materials depend much on imports and agricultural investments are small.

Long noted foreign firms still see investment opportunities in Vietnam’s agriculture.

Nevertheless, Vietnam needs to formulate an appropriate agricultural development strategy. The strategy should identify what the country needs, and detailed information about pros and cons of the country’s agriculture should be provided for investors, according to Long.

Other difficulties which enterprises may encounter in agriculture are small production scale, too many categories of products, a lack of skilled labor and a loose linkage between enterprises, farmers and producers.

Meanwhile, supporting policies of the State are no longer appropriate and there is no specific preferential policy for those investing in agriculture.

As a result, Long said there should be policies in terms of credit, infrastructure development, technology and human resource training to develop high-quality and environmentally friendly products.

 

Source: theSaigontimes