Hanoi (VNS/VNA) - Vietnam was in urgent need ofpolicies to develop a transparent and sustainable agricultural land market toattract more investment in the farming sector, according to the Vietnam RealEstate Association.

Do Viet Chien, the association’s general secretary, said at aconference on December 26 that the definition of the agricultural land marketin Vietnam remained vague and lacked consistency, which was hinderingagricultural development and discouraging investment in the sector.

“We need to introduce policies to build a transparent andconsistent agricultural land market to fully exploit land resources,” Chiensaid.

According to Tran Dinh Thien, former director of the CentralInstitute of Economics, Vietnam was seeing an increasing number of large,modern firms in the agricultural sector, instead of individual farmers andfarming households.

Thien cited statistics that 2,750 new firms operating inagricultural production were founded in 2019, up by 25 percent over theprevious year, bringing the total number of agricultural firms to 12,600, or1.8 percent of the total.

Many invested in high-tech agriculture, such as Vinamilk, TH,Đồng Giao, Nafoods, Dabaco, Masan, Thaco, Lavifood, Ba Huan and Bien Dong.

Forming agricultural value chains also required large-scaleland for production, Thien said.

He said the sector was an advantage for Vietnam, so it wasnecessary to develop the agricultural land market.

Policies should be developed to create favourable conditionsfor firms to invest in hi-tech agricultural production, Thien said.

Le Xuan Nghia, former chairman of the National FinancialSupervisory Committee, said Vietnam’s agricultural land market lackedtransparency and stability.

Nghia pointed out that unclear land planning, coupled withrapid urbanisation which required the conversion of agricultural land into landfor other purposes, often triggered speculation.

In addition, most transactions involving agricultural landwere not conducted via brokerages, making the market less transparent.

Vietnam did not have insurance policies for agricultural landownership, Nghia said.

In Vietnam, it's difficult for farmers to use agriculturalland as a guarantee to borrow money from banks, reflecting that agriculturalland is not regarded as an true asset.

Agricultural land transactions in Vietnam are mainly betweenfarmers or between farmers and enterprises.

Transactions between farmers and farmers are often smallscale while transactions between farmers and enterprises are relativelyunpopular because of a number of difficulties such as disagreements in landprices and unclear land ownershiprights.                 

Nghia said agricultural land should be recognised as anasset, which could be used for a mortgage. In addition, Vietnam should havepolicies that insured ownership rights – an important factor to implementingtransactions.

According to senior economic expert Can Van Luc, Vietnamshould review the way it managed agricultural land with regard to the country’sfood security strategy and rice export policy.

Price frames for agricultural land should also be adjusted toapproach market value, Luc said, adding that the amount time permitted toexploit agricultural land should be extended from the current 50 years to 70 oreven 99 years.

Enriching the national database on land in general andagricultural land in particular was also of critical importance to ensuring theeffective management and exploitation of land resources, Luc said.

The country also needed to clear tax policies foragricultural land, he said. For example, tax breaks for agricultural landtransactions should be offered to encourage the development of the market.

Most importantly, Vietnam should encourage land accumulation,in which farmers contributed their land as a type of capital contribution, Lucsaid.

Agricultural land accounts for 39.5 percent of the country’stotal area./.