The Government hoped to attract greater foreign investment in agriculture, the director of the Ministry of Agriculture and Rural Development’s External Affairs Department, Le Van Minh, told Viet Nam News.

Foreign investment in farming and forestry had remained low and mainly focused in key economic zones, said Phan Huu Thang from the Ministry of Planning and Investment’s Foreign Investment Agency.

Though the farming sector had attracted investors from 42 countries and territories, it had remained unattractive to investors with great potential and experience in the sector, including the US, Thang said.

Most foreign investment in the sector has come from Asia, with Taiwan taking the lead, accounting for 19 per cent of total foreign direct investment, followed by Thailand at 12 per cent, and Singapore at eight per cent.

By improving the legal system and providing more preferential conditions and greater transparency and openness in the agricultural sector, Minh said, Viet Nam would attempt to minimise risks in a sector viewed by economists as high risk due to unpredictable natural conditions, low profit margins, and seasonal production.

Minh said measures to minimise risks included foreign exchange controls, allowing investors to operate through foreign bank accounts, allowing mortgages of agricultural land use rights, and providing compensation for site clearance.

State budget and official development assistance (ODA) funds would be allocated to develop infrastructure in rural areas, train farmers, and invest in research and technology transfer, he said.

Prioritised sectors would include food and forestry products, processing industries, reforestation projects, and livestock, each aimed at boosting farm export value, reducing the export of unprocessed produce, and creating jobs for workers in Viet Nam, Minh said.

In 2007, 61 new foreign-invested projects were licensed, accounting for $180 million of new foreign investment in the sector.

Overall, about 700 foreign-invested projects were operating in agriculture at the end of 2007, channeling a total of US$3.78 billion into the farming sector. These projects, however, accounted for only 3 per cent of total foreign direct investment.

In the 1990s, most focused in timber and forestry production and processing, but cultivation, livestock, sugar, and food processing have seen substantial growth in FDI this decade.

Foreign projects employ more than 75,000 workers, not to mention those working on a seasonal basis or in support industries.

Source: VietnamNews