Tax and capital incentives would be offered to agro-forestry and sea food enterprises to promote their production and export during the global economic recession, according to Minister of Agriculture and Rural Development Cao Duc Phat.

In an on-line dialogue last Friday, Phat shared this and other Ministry of Agricultural and Rural Development (MARD) news with concerned enterprises and readers.

To help export enterprises, Phat said MARD asked the Ministry of Finance to exempt or reduce taxes for certain products provided that the policy is in compliance with World Trade Organisation (WTO) committments.

The MARD also requested the Government to exempt export tax imposed on rice and fertilisers and not to apply tax on imported materials used for animal feed production in order to lower prices.

Another proposal was submitted to the Government to offer loans for enterprises to purchase catfish (tra and basa) from farmers in the Cuu Long (Mekong) Delta.

In addition, MARD asked for a budget increase for trade promotion equal to 0.05 per cent of the total annual export values of agro-forestry and fisheries products.

Phat also answered a lot of queries on measures that would help enterprises seek market outlets, which is also an important question for material producers.

In addition to tax and fund incentives, Phat said the ministry had stepped up guidance on trade promotion to maintain traditional markets and expand to new ones.

MARD has also taken heed on the marketing of fisheries products in domestic and international markets.

The ministry’s authorised bodies have instructed many enterprises to take out preferential loans, Phat said.

Nguyen Phi Long from HCM City raised a question regarding slow response to a proposal from the Viet Nam Rubber Industry Group to borrow VND1.5 trillion (US$85.7 million) for the purchase of 100,000 tonnes of rubber to hold in reserves, which is expected to keep farmers from selling latex at a low cost.

Deputy Minister of Agriculture and Rural Development Luong Le Phuong said the ministry sent an official letter to the Ministry of Industry and Trade to report the issue to Prime Minister Nguyen Tan Dung.

Phuong said there would be some help for farmers to lower production costs and improve their product’s quality. Assistance includes investment aid for the drying network and warehouse for storage of produce.

He also said the ministry agreed with the plan to buy 100,000 tonnes of rubber for reserves, but noted that it should be done when the selling price is lower than the actual cost. At that time the Viet Nam Rubber Industry Group should work directly with commercial banks, Phuong said.

Looking ahead

In addition to immediate measures, MARD also revealed methods to help enterprises prepare for unexpected economic difficulties.

Minister Phat said the ministry had proposed to the Government and relevant bodies to adopt policies focused on increasing the competitiveness of agro-forestry and fisheries products. It would be done by reducing production and trade costs, and increasing product quality.

To that end, relevant agencies would need to control the price of production materials, particularly those used for farm production such as fertilisers, veterinary medicines and seeds.

MARD also ordered other agencies to apply the advanced quality management system into areas such as raising tra fish and growing vegetables and fruit to meet the growing demand for food safety and hygiene. As a result, enterprises would be able to better deal with trade barriers.

To prepare for product export at the most beneficial time, deputy minister Phuong said MARD asked the Agro-Forestry Product Processing and Salt Production Department to work out plans to build warehouses with 4 million tonnes of capacity for rice and to build frozen food storage.

The on-line dialogue, which received 600 questions from 390 people, also covered other matters of concern such as food safety and sluggish investment into the agricultural sector.