October 25, 2012

 

Vietnam's livestock industry urges government on having clear policies to attract investment

 

 

In order to attract foreign investment in the livestock industry, the Vietnamese government should have clear policies.

 

This is according to Tong Xuan Chinh, deputy director of the Livestock Production Department in a conference in HCM City on Tuesday (Oct.9).

 

Foreign Direct Investment (FDI) in the livestock sector remained modest because of the high risk of diseases and a lack of clear policy. The sector had attracted only 0.77% of total FDI in the 2000-10 period. The Government should tweak FDI policies towards the public-private partnership (PPP) model.

 

The Ministry of Agriculture and Rural Development had worked with multinationals to develop PPP models for five products, including tea, coffee, and vegetables, to improve quality and productivity and develop them in a sustainable manner. There were no PPP models for the livestock, forestry, and fishery sectors even though it was an important mechanism in strengthening the involvement of producers in developing the sector.

 

There were many fields related to the livestock industry that could profitably use the model, including slaughter and processing systems, human resources, and communications systems. The Government should maintain existing incentives like waiver and reduction of corporate and import taxes and land rentals and others, especially to projects employing bio-technology.

 

The Government should enable FDI firms that invested in encouraged sectors to get loans from banks. Support should also be provided to foreign firms developing sources of raw materials for animal-feed production, delegates said. Localities and relevant agencies should work to organise more training courses to improve the human resource served for the industry.

 

The animal-feed sector was the most attractive to foreign investors in the livestock industry. They owned 58 animal-feed production plants out of the country's total of 233 plants, producing 10.6 million tonnes or 60% of total output. But other sectors like raising breed stock and environmental treatment had failed to attract them.

 

Hoang Kim Giao, Director of the Livestock Production Department, said the livestock industry has gradually shifted from household-based breeding to industrial farms, improving food safety and reducing pollution. The industry has grown at 6-7% in the last decade to meet the burgeoning demand for meat, eggs, and milk.

 

Nguyen Xuan Duong, another deputy at the department, said as part of a national strategy the industry would strive to maintain annual growth of 6-7% until 2015 and 5-6% in 2015-20, increasing the ratio of livestock production to total agricultural output from 27% now to 42% by 2020. The industry would focus more on developing poultry in future instead of pigs as in the past, he said.

 

The strategy encourages investment in industrial farms, slaughterhouses and meat processing factories that use advanced technologies, and diversifying products to add value and organise production following a value chain to cut costs and improve efficiency, he said. He urged localities to draft clear zoning plans for livestock production and concrete policies so that investment could be mobilised from all sources. For this they should also have favourable land polices in the initial period, he added.