October 27, 2010

 

Vietnam government to offer loans to lessen post-harvest losses

The Vietnamese government will offer preferential loans to organisations and individuals for the purchase of machines and equipment to trim down post-harvest losses in the agriculture and aquaculture sectors.

 

Under a decision approved by Prime Minister Nguyen Tan Dung, the State budget will subsidise the total interest rates for these loans in the first two years, and 50% from the third year onward.

 

Borrowers may take out loans equal to the value of the equipment they wish to purchase from the Vietnam Agriculture and Rural Development Bank.

 

Direct producers, including co-operatives, households and individuals, and businesses who sign contracts with farmers will be eligible for the support.

 

The decision also stipulates a list of eligible machines and equipment including those used for aquatic production and cold storage. In addition, domestic production must account for 60% of the value of the loan and conform to trade standards, including registered trademarks.

 

Investment projects for the construction of storehouses with capacity totalling four million tonnes will benefit from the low interest rate as well as a land lease exemption and 20% of land clearance costs.

 

The decision stipulates that enterprises will be exempt from paying business income tax in the first three years and reduced to half for the next two years.

 

The State budget will also cover 100% of the expenses for organisations, households and individuals to experiment with high quality rice and corn breeds for the first time.

 

People who buy patents or register intellectual property rights for farmers' products will receive the support. Scientific applications to reduce post-harvest losses will be added to a list of beneficiaries for support from the national technology renewal fund.

 

Standing Deputy Prime Minister Nguyen Sinh Hung has instructed the Southern Food Corporation to complete its plans for construction of a food warehouse system in the Cuu Long (Mekong) Delta Region before June 31, 2012.

 

The Ministry of Finance will review the land use rights exemption for the project and submit the proposal to the PM for approval.

 

The corporation will ask investors to complete investment credit loan applications from the Vietnam Development Bank as well as commercial banks to determine their interest in medium-and-long-term loans.

 

Statistics from the Ministry of Agriculture and Rural Development show that the region has annual productivity of around 20 million tonnes, accounting for 90% of the country's rice exports.

 

However, it says the total capacity in the region's warehouses is only 1.5 million tonnes, meeting just 30% of demand. The plan is expected to be an important solution to improve quality and reduce post-harvest losses for the key export item.