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Agricultural sector FDI still lagging

2013-06-14 11:40:18

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Foreign direct investment in the agriculture, forestry and seafood sectors has fallen in recent years, according to the Ministry of Agriculture and Rural Development.

In the last 25 years, the three sectors have seen only 496 foreign-invested projects, with a combined registered capital of US$3.3 billion, which is only 1.5 per cent of total registered capital in the country.

The number of projects in the three sectors represent a mere 3.3 per cent of the country's total FDI projects.

During this period, the FDI projects in the three sectors dispersed a total capital of $1.7 billion, accounting for 2.2 per cent of the total dispersed capital of the country's FDI projects.

High risks from natural disasters, small-scale production and low profits were the major reasons for lack of interest from investors, according to the ministry.

Most of the recent projects have focused on importing, exporting and distributing agricultural produce, rather than cultivation. Economic expert Pham Chi Lan said domestic investors were also reluctant to pour money into the three sectors.

"The profits are always lower than that of the industrial and services sectors," she said.

Although many preferential policies for investors have been issued, they have not been implemented well, she added.

Poor infrastructure is another problem facing the agricultural sector.

Although the sector provides jobs for more than 50 per cent of the country's labour force, it accounts for only 10 per cent of the country's total investment capital.

To attract investors, the ministry said it planned to develop new policies that will call for investment in high-tech agriculture, forestry and seafood production. A new plan to 2020 will be drawn up as well.

More than 30 countries and territories, mostly from Asia, have invested in the country's agriculture, seafood and forestry sectors.