Hanoi (VNA) - Athorough audit of all State-owned agricultural businesses will be carried outin 2019 following next year’s concentrated restructuring efforts, so as toidentify underperforming firms and other issues facing the sector.

The findings will bereported to the National Assembly, Deputy Prime Minister Vuong Dinh Hue said ata conference last weekend.

The conference aimed toreview the progress of restructuring, renewing, and improving the operationaleffectiveness of State-owned agribusinesses in the 2015-2017 period.

Ha Cong Tuan, DeputyMinister of the Ministry of Agriculture and Rural Development (MARD), said that40 out of 41 restructuring plans for the agriculture sector in cities,provinces, and enterprises had been approved by the Prime Minister.

Hanoi’s agriculturerestructuring plan was still being reviewed and adjusted by the municipalPeople’s Committee following feedback from the assessment council, he said.

Leaders of provincesincluding Lao Cai in the north, and Khanh Hoa and Binh Dinh on thesouth-central coast reported positive outcomes such as the streamlining ofstaff following new business plans directed by the Prime Minister.

More encouragingly,post-equitisation, previously 100 percent state-owned companies have seenincreased revenues and profits.

For example, annualrevenues of the Binh Duong Province Rubber Co Ltd have jumped nearly three-foldpost-equitisation, from 49 billion VND (2.16 million USD) to 133 billion VND (5.86million USD). Many forestry companies under the Vietnam Forest Corporation(Vinafor) or the Vietnam Rubber Group (VRG) also reported better earnings.

However, it was alsopointed out the overall progress over the last three years in implementingGovernment’s 2014 Decree No. 118 on restructuring agro-forestry businesses hadnot been satisfactory.

For example, in HCM City,only 20 of 102 State-owned agriculture businesses have been equitised, and 28companies that were supposed to be dissolved still remain operational.

Provincial agricultureofficials mentioned many obstacles and challenges that they face.

Lo Minh Hung, Vice Chairmanof the People’s Committee of northern mountainous province of Lao Cai, saidtransforming SOEs into two-member limited liability companies was a totally newconcept with many implementation bottlenecks.

“The ‘second member’ of thecompany is supposed to be a private entity, which poses very difficultquestions about capital ownership, investment direction and landmanagement.  The land these companies are currently managing are reallyfavourable to agriculture. When a private company comes into the picture, therepurposing of land could be a problem in our province,” he said.

Hung urged the SteeringCommittee on Renovation and Development of Enterprises (under the Ministry ofFinance) to issue guidance on implementing this particular company model toavoid losses and enable better management of capital and land resources.

Other provinces alsoreported that many farms and forestry units which have converted to totallyState-owned companies or companies with majority State-ownership are facingdifficulties in sourcing capital, delays in granting charter capital additionsand lack of assets to use as collateral for bank loans.

A lot of companiesundergoing restructuring are also struggling with issues like land measurementand mapping, brand valuation or resolving its bad debts, the conference heard.

For instance, the VietnamNational Coffee Corporation is facing trouble collecting 380 billion VND (16.76billion USD) of outstanding debt from coffee-planting households as there’s noclear authority to handle this.

On the issue of landmeasurement and mapping related to all restructuring agricultural enterprises,which could end up costing 1,100 billion VND (48.44 million USD), DeputyFinance Minister Tran Van Hieu said the problem was not the cost, as thegovernment will shoulder 70 per cent of it, but that local governments need totake stock of existing land through field trips, not just gathering figuresfrom books.

Deputy Prime Minister VuongDinh Hue said there were several reasons for the slow progress in restructuring.

Objectively speaking, thisis a complex matter as it involves financial problems and land issues lastingdecades, but the main cause remains a lack of commitment from some localgovernments, according to Hue.

Other provinces that wantto finish the restructuring quickly lack practical plans, eventually slowingthe whole process because it takes time to adjust the plans.

Hue stressed that the caseof agricultural enterprises was different from the general restructuring effortbecause it involved the livelihoods of millions of people, with social orderand security implications in many localities.

Underscoring that 2018 willbe “the year of restructuring,” he directed that all restructuring plans mustbe completed and approved by the government in the final quarter of this year.

The Finance Ministry wastasked with issuing guidelines encouraging private businesses to join thetwo-member limited liability company model; and the Ministry of Environment andNatural Resources was asked to quickly update its land and forest database.-VNA