Head of Research Department for Rural Development under the CentralInstitute of Economic Management (CIEM) Luu Duc Khai spoke with Nongthon ngay nay (Countryside Today) newspaper about the support industryfor building agricultural machines.
*What are the realities of agricultural machine production in Vietnam?
Vietnammanufactures 30-40 percent of the agricultural machines used in thecountry. The rest are imported, mostly from China and Japan. We have notdeveloped agricultural machinery production largely because thecountry's support industry is at zero. Our support industry meets about20 percent of the country's demand, leading to difficulties inattracting investment.
We mainly import ploughs, pesticide sprayers, and harvesting machines.
*Can Vietnam develop a support industry for agriculture machine manufacturing?
Oneof the weaknesses in the support industry for agricultural machines wasthat demand was low, so the support industry could not attractinvestment.
Preferential policies have been developed forsupport of certain industries - such as computer electronics, andgarment and automotive manufacturing - but not to agricultural machineproduction.
In addition, state management of the support industrywas weak; the state was neither gathering statistics for norstandardising that area of agriculture.
Vietnam also has hadinsufficient policies for the industry development, and has beenespecially lacking in policies to encourage small and medium-sizedsupport industry enterprises (SMEs).
Those businesses, mainlySMEs, have had a hard time accessing capital – a problem made evengreater because support industry development required a capital amount4-10 times greater than that of the assembly industry.
Expertsestimate that the Cuu Long Delta region has suffered an average loss oftens of billions of dong yearly due to the lack of rice harvest andpreservation machines.
*What are your thoughts on the country's policies to support agricultural machine building?
In localities, support industry policies haven't "reached" enterprises in that field.
TheGovernment's Decision 12 on developing certain support industries in2011 failed to attract certain support industry enterprises becausethose enterprises, under the new decision, would be treated like manyother SMEs. And as such, those companies would have a difficult timeaccessing the loans they needed.
Therefore, it is necessary tohave concrete and practical policies for support industry enterprises,such as land policy and tax incentives. Farmers also needed directsupport, including loans with preferential interest rates or policiesfor farmers to borrow loans at banks.
*The Government recentlyadopted an action plan for development of the agriculture machineindustry. How will that plan improve the current situation?
Weplan to increase the country's mechanisation rate in agriculture fields.We have implemented programmes building and maintaining agriculturemachines, and we have encouraged farmers to use those machines.
Withthe current internal weaknesses, Vietnam needs foreign support for thefield, especially from Japan, in an effort to improve research andproduction capabilities.
As far as I know, the Government willdraft a decision to promote agricultural mechanisation, in which anecessary fund from the state budget would be used to support localitiestowards implementing their mechanisation plans.
The Governmentwill also set up criteria and technical regulations for farming andproduction machines, and better tax policies for manufacturers. However,we still needed more basic measures.
*What are those specific measures?
Themost urgent measure now is to rapidly modernise technology and to trainskilled workers in an efforts to provide as soon as possible productsthat meet required standards.
The Ministry of Finance and theState Bank should develop a financial mechanism that provides favourableconditions for enterprises to access long-term loans with preferentialinterest rates.
I think that it is necessary to encourage alleconomic sectors to invest in agriculture machine manufacturing. All ofthose individuals and organisations field should be treated equally asenterprises investing in rural area.
The Government should alsocreate favourable conditions for local enterprises to form jointventures with foreign firms in order to manufacture and assemble highlyspecialised tractors, as well as machines for harvesting rice andsugarcane. The Government also should encourage the importation ofequipment that hasn't been produced in the country.-VNA
*What are the realities of agricultural machine production in Vietnam?
Vietnammanufactures 30-40 percent of the agricultural machines used in thecountry. The rest are imported, mostly from China and Japan. We have notdeveloped agricultural machinery production largely because thecountry's support industry is at zero. Our support industry meets about20 percent of the country's demand, leading to difficulties inattracting investment.
We mainly import ploughs, pesticide sprayers, and harvesting machines.
*Can Vietnam develop a support industry for agriculture machine manufacturing?
Oneof the weaknesses in the support industry for agricultural machines wasthat demand was low, so the support industry could not attractinvestment.
Preferential policies have been developed forsupport of certain industries - such as computer electronics, andgarment and automotive manufacturing - but not to agricultural machineproduction.
In addition, state management of the support industrywas weak; the state was neither gathering statistics for norstandardising that area of agriculture.
Vietnam also has hadinsufficient policies for the industry development, and has beenespecially lacking in policies to encourage small and medium-sizedsupport industry enterprises (SMEs).
Those businesses, mainlySMEs, have had a hard time accessing capital – a problem made evengreater because support industry development required a capital amount4-10 times greater than that of the assembly industry.
Expertsestimate that the Cuu Long Delta region has suffered an average loss oftens of billions of dong yearly due to the lack of rice harvest andpreservation machines.
*What are your thoughts on the country's policies to support agricultural machine building?
In localities, support industry policies haven't "reached" enterprises in that field.
TheGovernment's Decision 12 on developing certain support industries in2011 failed to attract certain support industry enterprises becausethose enterprises, under the new decision, would be treated like manyother SMEs. And as such, those companies would have a difficult timeaccessing the loans they needed.
Therefore, it is necessary tohave concrete and practical policies for support industry enterprises,such as land policy and tax incentives. Farmers also needed directsupport, including loans with preferential interest rates or policiesfor farmers to borrow loans at banks.
*The Government recentlyadopted an action plan for development of the agriculture machineindustry. How will that plan improve the current situation?
Weplan to increase the country's mechanisation rate in agriculture fields.We have implemented programmes building and maintaining agriculturemachines, and we have encouraged farmers to use those machines.
Withthe current internal weaknesses, Vietnam needs foreign support for thefield, especially from Japan, in an effort to improve research andproduction capabilities.
As far as I know, the Government willdraft a decision to promote agricultural mechanisation, in which anecessary fund from the state budget would be used to support localitiestowards implementing their mechanisation plans.
The Governmentwill also set up criteria and technical regulations for farming andproduction machines, and better tax policies for manufacturers. However,we still needed more basic measures.
*What are those specific measures?
Themost urgent measure now is to rapidly modernise technology and to trainskilled workers in an efforts to provide as soon as possible productsthat meet required standards.
The Ministry of Finance and theState Bank should develop a financial mechanism that provides favourableconditions for enterprises to access long-term loans with preferentialinterest rates.
I think that it is necessary to encourage alleconomic sectors to invest in agriculture machine manufacturing. All ofthose individuals and organisations field should be treated equally asenterprises investing in rural area.
The Government should alsocreate favourable conditions for local enterprises to form jointventures with foreign firms in order to manufacture and assemble highlyspecialised tractors, as well as machines for harvesting rice andsugarcane. The Government also should encourage the importation ofequipment that hasn't been produced in the country.-VNA
