Although investment in agriculture and rural areas has improved remarkably in recent years, the number of projects and the volume of investment capital in this sector is still less than in other economic sectors.
According to the Foreign Investment Agency under the Ministry of Planning and Investment (MPI), in 2008, the agro-forestry-fisheries sector attracted 45 new projects with combined investment of over 252 million USD; accounting for 3.8 percent of all projects and 0.42 percent of newly registered investment. The respective percentages for the first eight months of the year were 2.57 percent and 0.46 percent.
The sector now has 480 valid investment projects with total registered capital of over 2.98 billion USD, making up 4.5 percent of all total projects and nearly 1.8 percent of the total investment capital.
The majority of the projects are small-sized, except for a number of sugar, animal feed, afforestation and wood pulp projects that have cost tens of millions of USD. Many countries with modern agricultural industries have yet to invest in Vietnam.
Many domestic businesses have also invested in agriculture and rural areas. According to the Central Institute for Economic Management, more than 39,400 businesses are registered to invest in agriculture and rural areas but most of them are small or medium sized.
In addition, there are around 2,000 craft villages in rural areas. However, due to their small scale, the contributions craft villages make to their local economies are still humble.
A survey conducted by the Agricultural and Rural Development Information Centre shows that , the average size of rural businesses has increased by only 1.7 percent since 2000. The proportion of agricultural businesses operating in rural areas has also decreased from 5.2 percent to 1.2 percent while the rate of industrial enterprises has climbed from 67.5 percent to 70 percent.
To lure more investment into agriculture and rural areas, the Ministry of Agriculture and Rural Development has recently put together an action programme to attract FDI into the agricultural sector. It also provides a list of projects that are looking for investment and has put forward plans to raise more domestic and foreign investment.
The MPI is also drafting a plan to encourage businesses to invest in agriculture and rural development with a wide range of preferential policies, including land rental exemption and reduction./.