Mekong Delta finds it hard to attract FDI in agriculture

Many investors from Asia have poured capital into the Mekong Delta region, but the investment in agriculture remains modest. 

According to the Vietnam Chamber of Commerce and Industry (VCCI) Can Tho Branch, the Mekong River Delta in the first six months of 2016 attracted 79 new projects with total registered capital of US$987 million, while 51 operational projects have registered to increase capital by US$412 million.

With US$1.4 billion worth of registered capital in the first half of the year, the Mekong Delta, for the first time in 20 years, saw a sharp increase in FDI and attracted huge capital. 

The investors are mostly from Asia who inject money into farm produce processing, textile & garment, and wind power, according to Nguyen Phuong Lam from VCCI Can Tho.

 

Most of the large-scale projects are in footwear and garment, including the Korean invested sports shoes in Can Tho City (US$171 million), Taiwanese Kintpassion in Long An province (US$68.4 million) and another shoemaking project in Long An worth US$25 million.

Meanwhile, there was only one project in agriculture, capitalized at US$68,000 registered by a Japanese investor. 

In Can Tho City, considered the ‘metropolis’ of the Mekong Delta, only three high-technology agriculture projects have started over many years with total investment capital of US$44.1 million.

Nguyen Ngoc He, director of the Can Tho City Department of Agriculture and Rural Development, admitted that the city had called for investment into agriculture projects in the last two years, but the achievements remained very modest. 

“Some investors came to learn about opportunities and left. Most recently, an investor from Iran came to see us, but has not made any decision. We visited Israel to call for investment, but there has been no reply,” he said.

He said that investors hesitated to invest in agriculture because agricultural production depends heavily on the weather, while farm produce prices are unstable.

According to Prof Vo Tong Xuan, the Vietnamese leading rice expert, 20 years ago, an American investor came to Vietnam and cooperated with Vinafood to set up a rice processing factory for export. 

The factory, located in Tra Noc Industrial Zone in Can Tho City, used the most advanced technology and cooperated with farmers to grow rice in an area of 4,000 hectares.

The project was very successful: farmers grew long-grain rice and sold it to the enterprise at high prices, and the enterprise exported the rice at high prices of US$380-US$480 per ton.

However, the investor later decided to leave because it did not receive necessary support from local authorities.

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