In the 2001-2005 period, the total investment capital for agriculture reached approximately VND109,000 billion, of which, around VND29,000 billion came from the State budget, making up between 15-17 percent of annual investment capital from the State budget while real demand needs 25-30 percent.

At National Assembly (NA) sessions, many NA deputies shared the common view that farmers are those who often face least and suffer most.
In comparison to contributions by the agriculture and rural development sector, which account for 20 percent of GDP, the investment level for the sector in previous years was not sufficient.

In addition, effective mechanisms and policies have not yet been issued to encourage and draw investment into upgrading agricultural and rural infrastructure.

Deputy head of the Enterprise Renovation Department under the Ministry of Agriculture and Rural Development Dinh Quang Tuan said agricultural production suffers risks from many sides, particularly natural conditions, market fluctuations, low interest rates, slow capital returns due to the requirement to crop and animal cycles. Therefore, enterprises have focused less investment on agriculture and rural development. Apart from this, soaring market prices in recent times, poor rural infrastructure facilities and expensive services have sent farmers into a tailspin.

The Enterprise Renovation Department said that most agriculture and rural development businesses are small and medium-sized. A worker at an FDI enterprise or State-owned enterprise can generate an average of VND341 million and VND300 million per year, respectively, while the one at an agricultural enterprise generate only VND52 million per year, and only 60 percent of agricultural businesses operate at a profit.

Minister Phat emphasised that it is urgent to find solutions for boosting investment in the agricultural and rural sector to ensure economic growth, highlighting that 70 percent of total investment capital for agriculture has been mobilised from local and foreign enterprises. However, according to statistics from the Ministry of Planning and Investment (MPI), FDI in industrial development accounted for 34 percent while the proportion for agricultural development is just 7 percent. In the 2006-2010 period, the agricultural and rural sector will receive 94 major FDI projects with the total amount of registered capital up to nearly US$26 billion. Director of the Legislation Department under MPI Pham Manh Dung said the agriculture and rural sector is facing three difficulties luring FDI inflows including risks, selection of partners and poor land planning.

Currently, only a few countries are pouring investment into agriculture and rural development in Vietnam. The country’s major investors are mostly from Asia, particularly Thailand, Singapore and Taiwan.

MARD is targeting its own investment and FDI funding toward growing and processing high-quality agro-forestry products. There are three main groups of basic solutions to lure FDI inflow. The groups include improvement of efficiency and quality of development planning for each sector, the perfection of FDI policies and the enhancement of FDI promotion activities.