Enhancing Application of Hi-Tech in Agriculture

According to statistics, total foreign investment (FDI) of valid projects licensed from 1988 to 2012 is valued at over US$210 billion; of total 14,500 projects, 493 projects in the area of agriculture, forestry and fisheries are only capitalized at over US$3.26 billion (accounting for 3.4 percent of total projects and 1.5 percent of total registered capital). By December 31, 2011, total of being-operated businesses in the entire area of agriculture, fisheries and forestry only account for 1 percent of the total number of the enterprises, 2.3 percent of total number of workers and 0.9 percent of total registered capital. Compared with other corresponding figures of 2.2 percent; 4.2 percent and 1.8 percent in 2005, the figure is much lower. Weak institutional system has limited the private investment in agriculture. That explains why the FDI in agriculture is far lower and the domestic investment through the establishment of the business is very poor.

 

Recently, the State Bank of Vietnam (SBV), Ministry of Agriculture and Rural Development (MARD), and the Nhan Dan Newspaper have co-organized the workshop under theme "Solutions to develop a large-scale production model in agriculture and application of high technology." The workshop has come up with practical contributions for policy makers, which helps to create more appropriate policies to develop the agriculture of Vietnam sustainably and effectively; especially, the credit policy is now being given and implemented by the SBV and other ministries.

 

At the workshop, many delegates said that the biggest challenge of the agriculture is the market related issues. The market development requires fulfilment of the needs of the current market and increase of the potential demand for agricultural products. The increase of demand is an important factor for the development of agriculture. Therefore, it is necessary to change the perception of market development by increasing the constant supply to another direction of increasing both of domestic and overseas demands.

 

According to Nguyen Van Binh, Governor of the SBV, the development of agriculture, life improvement of the farmers and construction of rural areas are main goals of the policy of the Party and State. In nearly 30 years of "Doi moi" (renovation), Vietnam’s agriculture has experienced strong growth and achieved great results. The lives of the majority of farmers have been improved and the living standards of the rural area of Vietnam have gradually become more modern. Especially, in the period of crisis and global economic downturn since 2008, the agriculture has indeed become a pillar of the economy before it was impacted negatively by the world economy. This highly requires the application of high technology in agriculture to improve efficiency, competitiveness, and product quality and meet the diverse needs of the consumers, particularly the standard of the exports.

 

Mr Cao Duc Phat, Minister of Agriculture and Rural Development, said after 30 years of "Doi Moi", Vietnam's agriculture has strongly grown. The agriculture of Vietnam has been turning to a period of innovation and in-depth development with larger scale for international economic integration. This highly requires the application of high technology in agriculture to improve efficiency, competitiveness, and product quality and meet the diverse needs of the consumers, particularly the standard of the exports.

 

Regarding credit, representative of the SBV said that at present, the SBV is cooperating with the MARD and Ministry of Science and Technology to conduct a survey and research for making a pilot policy before implementation. The purpose of this pilot programme is to support the pioneering enterprises in the implementation of the models associated with farmers as an inevitable trend of agricultural production in the market economies; the model is developed based on the rule that the businesses will be focal points to cooperate with farmers and help the farmers to gain the practical benefits of this affiliation.

 

This pilot program will help the banking sector not only solve the problem of credit investment for agriculture but also direct the small and fragmented production towards larger scale, more productivity and competitiveness and in accordance with the objectives of the restructuring of agriculture, which has been approved by the Prime Minister, for the purposes of gradually improving the farmers' living standards and achieving the national objectives of building a new countryside.

 

To maximize the efficiency of the high technology applications in agriculture, Vietnam needs to set up a roadmap with specific solutions, one of which promotes the role of the public and private partnership in agriculture.

 

To promote the partnership model among investors, operators and government that is known as “supporters", based on that the businesses themselves invest and select the best models to use and manage their capital to increase effectiveness. The government will act as the third party to give supporting solutions for businesses. The government sets up standards and implement specific policies to encourage enterprises to apply high technology in agriculture. In addition, the government facilitates the regional planning for agricultural production and publicizes the planning and policies to business and people. The local authorities in the area of high technology applications strengthen the collaboration with enterprises in the process of deploying and mobilizing the people's participation and support for businesses. Through the practices and international experiences, the government summarizes the successful models and adopts good models to a larger extent.

In addition, there should be policies to encourage enterprises to participate in high technology applications in agriculture.

 

Vietnam agriculture is facing the huge challenges of negative effects of climate change, high production costs, and low agricultural quality, which make our agriculture less competitive. In addition, the out-of-date processing industry and lack of substitutes results in limited added value in the agricultural value chain.

 

In addition, the growth of agriculture in recent years is mainly due to the policy reform, enhancement of investment, especially in irrigation, and development of science and technology. Therefore, high technology is the most important tool to enhance the added value of agricultural products; it is even more important when land, labour, and incentives from policies are no longer comparative factors.

 

In the future, growth in agriculture will rely heavily on the business development policy and the policies on science and technology, of which the policies for enterprises play key roles.