Vietnamese government loans given to aquaculture firms for upgrades

 

 

The Vietnamese Government will subsidise two-year interest-free loans for aquaculture businesses that want to modernise their equipment.

 

The government will then cover 50% of interest payments in the third year of the loan period.

 

Vietnam gains hefty sums of foreign currencies through the fishery sector, which is a of top export earner for the country. The government's incentive seeks to assist fish farmers and processing businesses obtain access to monetary loans and enlarge their production capacity, according to government officials.

 

To be eligible for the subsidies, the aquaculture businesses must purchase 60% or more of the new technology from local companies. The government has assigned the Vietnam Bank for Agriculture and Rural Development to distribute loans to businesses in both the fishery and agriculture industries. The bank now charges a fee of 11% on loans in terms of 3-24 months.

 

In December 2009, those subsidies fell to 2% and then ended in March for companies seeking technology upgrades.

 

The country has produced 3.8 million tonnes of sea products, including 2.87 million tonnes of fish, in the first nine months of 2010. And Vietnam has exported US$3.4 billion worth of seafood products so far this year - a 13% rise compared to the same period in 2009.

 

The Vietnam Association of Seafood Exporters and Processors (VASEP) noted that a poor fish crop and climbing fish feed prices have undermined local companies. Numerous processing businesses are consequently not running at full capacity, as several farms have gone out of business.

 

According to VASEP, Vietnamese aquaculture and processing technology is weak, which incurs profound losses in the post-harvest season.

 

Vietnam's aquatic export turnover has burgeoned this year, but most export businesses have faced hardships due to lacking supplies and a shrinkage of tra spawning areas. Many large firms - such as Hung Vuong, Vinh Hoan and Nam Viet - have had to inject investment capital into spawning areas to find more sources of fish-breeding supplies.

 

Many seafood processing businesses in the Mekong Delta thus have had to import materials.

 

Companies have also struggled with other high input costs, such as those of high interest rates, electricity, water, salaries, transportation, and packaging. Furthermore, the price of shrimp has risen while other aquaculture products have fallen.