Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu speaks at the workshop. (Photo: laodong.vn)Hanoi (VNA) - Connectivity between banks,businesses, and farmers in value chains is essential for Vietnamese goods toenter the EU market, a workshop in Hanoi on November 20 heard.
The EU-Vietnam Free Trade Agreement (EVFTA), whichcame into force on August 1, has been described as an “expressway” leadingVietnamese goods, especially agricultural and aquatic products, which are amongthe country’s strongest, to the EU.
However, the EU’s strict requirements could bean issue for businesses or farmers seeking to enter the market on their own.
Nguyen Dinh Tung, Chairman and General Directorof Vina T&T Group, said that, in value chains, apart from connectivitybetween farmers and businesses, capital sources also form a very importantlink.
Farmers need capital to make investments but accessingloans is problematic. The engagement of banks in these chains would therefore facilitatefarmers’ access to capital, he noted.
Deputy Governor of the State Bank of Vietnam(SBV) Dao Minh Tu said that as of October 30, credit granted for agricultureand rural area-related activities had increased 6.5 percent against the end of2019. It now stands at about 2.16 quadrillion VND (93.3 billion USD), including27 trillion VND for hi-tech agriculture and 5 trillion VND for enterprisesinvolved in value chains.
Ha Thu Giang, Deputy Director of the SBV’sDepartment of Credit Policies for Economic Sectors, said developingconnectivity in agriculture is viewed as an inexorable trend and one of the keysolutions to improving the effectiveness of agricultural production.
The central bank has adopted many policies tochannel capital into the sector, she noted, adding that more than 80 credit organisationsand 1,181 people’s credit funds have granted loans for agriculture and ruralareas nationwide.
This type of credit grew 19.83 percent between2016 and 2019; higher than the overall growth rate of 16.02 percent, Giangsaid.
She also acknowledged certain challenges, suchas farmers violating contracts, the modest number of hi-tech agriculturalzones, and the lack of effective models.
Of a similar mind, Can Van Luc, Chief Economistat the Bank for Investment and Development of Vietnam (BIDV), pointed out that policieson hi-tech application in agriculture haven’t been conducted consistently,cooperation between farmers, the State, banks, scientists, businesses, andcooperatives/associations remains unsustainable, and some companies haven’tseriously realised their commitments to buy products from farmers.
He recommended that the Party issue a newresolution on agriculture, farmers, and rural areas, and that the Government directministries and sectors to perfect market and price forecasting systems to helpfarmers and businesses develop suitable orientations.
Meanwhile, Luc added, credit institutions shouldreform procedures to enhance farmers’ access to capital./.
VNA
