December 28, 2007 


Vietnam to lure investments in feed production and animal husbandry



Vietnam is setting out to attract foreign investments in animal feed production and animal husbandry after promising to revamp its policies and infrastructure. 


Poor rural infrastructure, a largely unskilled workforce along with the high risks such projects entailed are often the biggest bugbears foreign investors have about investing in Vietnam's agric-sector, VietnamNet reports. 


As a result, the sector only accounted for 5.6 percent of the US$63.7 billion in foreign direct investments (FDI) so far.

There are currently more than 700 foreign invested projects for agriculture in Vietnam, bringing in a total of US$312 million in earnings. This includes more than US$100 million in exports.


However, agriculture in Vietnam has often been subjected to the whims of weather, an unstable market and low profits.


Three out of four rural investments in plantations, agricultural and animal feed processing projects are now foreign-funded but three out of ten such projects fell through due to poor resources in rural areas, according to VietnamNet.


Access to huge tracts of land, which are de rigor to foreign projects, are often denied as these have been parceled out to farmers. Local governments are often at a loss as to how to compensate farmers for their land and how to attract foreign investments with incentives and lower tariffs.  


State agencies are now looking into the problem by improving planning and policies, identifying key projects requiring foreign investments and defining the role of foreign investors. Animal feed production and animal husbandry are among four areas favoured for foreign investments.


Authorities are now setting aside funds to develop rural infrastructure, furnishing the means to accelerate technology transfer in agriculture and provide vocational training to farmers. Whether this would help remains to be seen.