Feeding the future
The Government should have clear policies to attract foreign investment in the livestock industry, a senior official told a conference in HCM City on October 9.
Tong Xuan Chinh, deputy director of the Livestock Production Department, said
FDI in the livestock sector remains modest because of the high risk of diseases and a lack of clear policy.
The sector had attracted only 0.77 percent of total FDI in the 2000-10 period.
The Government should tweak foreign direct investment policies towards the public-private partnership (PPP) model, said Chinh.
The Ministry of Agriculture and Rural Development has worked with multinationals to develop PPP models for five products, including tea, coffee, and vegetables, to improve quality and productivity and develop them in a sustainable manner.
There are no PPP models for livestock, forestry, and fishery processing even though it is an important mechanism for strengthening the involvement of producers in developing the sector.
There are many fields related to the livestock industry that could profitably use the model, including slaughter and processing systems, human resources, and communications systems.
Delegates suggested that the Government should maintain existing incentives like waiver and reduction of corporate and import taxes and land rentals and others, especially to projects using bio-technology. In addition, it should enable FDI firms that invested in priority sectors to get loans from banks.
Support should also be provided to foreign firms that develop sources of raw materials for animal-feed production, delegates said.
Localities and relevant agencies should work to organise more training courses to improve human resources for the industry.
Foreign investment has contributed greatly to the development of the livestock industry in recent years.
Foreign firms have an advantage over their local rivals in many important areas like technology, development of breed stock, and veterinary drugs.
The animal-feed sector is the most attractive to foreign investors in the livestock industry.
They have owned 58 animal-feed production plants out of the country's total of 233 plants, producing 10.6 million tonnes or 60 percent of total output.
But other sectors like raising breed stock and environmental treatment have failed to attract them.
"So, on one hand, we should encourage foreign investors, on the other, we should set aside capital to invest in these sectors.", said delegates.
Development strategy
Hoang Kim Giao, Director of the Livestock Production Department, said the livestock industry has gradually shifted from household-based breeding to industrial farms, improving food safety and reducing pollution.
The industry has grown at 6-7 percent in the last decade to meet the burgeoning demand for meat, eggs, and milk.
Nguyen Xuan Duong, another deputy at the department, said as part of a national strategy the industry would strive to maintain annual growth of 6-7 per cent until 2015 and 5-6 percent in 2015-20, increasing the ratio of livestock production to total agricultural output from 27 per cent now to 42 per cent by 2020.
The industry would focus more on developing poultry in future instead of pigs as in the past, he said.
The strategy encourages investment in industrial farms, slaughterhouses and meat processing factories that use advanced technologies, and diversifying products to add value and organise production following a value chain to cut costs and improve efficiency, he said.
He urged localities to draft clear zoning plans for livestock production and concrete policies so that investment could be mobilised from all sources. For this they should also have favourable land polices in the initial period, he added.