Agricultural land accumulation: Enterprises and farmers meet with difficulties

Many enterprises orient to develop high-tech agriculture so a large area of agricultural land is needed for production. However, at present, the agricultural concentration and accumulation are implicitly agreed by enterprises with farmers without the State's role. Because there are no specific regulations on the concentration and accumulation of land and implicit agreements between enterprises and farmers bring risks to both sides.  

The process of concentration and accumulation of land is still difficult and shortcoming, non-effective. Photo: collected.

Do not allocate all land to farmers?

At the seminar to gather the comments of enterprises on draft decrees on land organised by the Vietnam Chamber of Commerce and Industry in collaboration with the General Department of Land Management (Ministry of Natural Resources and Environment)on November 25, many participants pointed out shortcomings about land accumulation activities for production.

According to a representative of the Ministry of Natural Resources and Environment, the reality shows that the concentration and accumulation of land has not been effective and maximised its potential. Therefore, the Ministry of Natural Resources and Environment is drafting a decree regulating the concentration and accumulation of land for agricultural production and submitting it to the Government in December 2019. This draft stipulates criteria for identifying investors to participate in concentration and accumulation of agricultural land as well as propose some policies to encourage concentration and accumulation of agricultural land.

For example, the draft decree allows investors to change the purpose of a part of agricultural land, but not more than 5 percent of the total project implementation area to build works and infrastructure for agricultural production under an investment project approved by a competent authority, and must not exceed 5,000m2;District and commune People's Committees act as focal point to lease land use right or receive land use authorisation to create agricultural land fund for investors who wish to rent or sub-lease land to organise production. Investors advance the land rent to the district and commune People's Committees to pay to the farmers. The land rent is to be negotiated by the district and commune People's Committees in accordance with the civil law.

In addition, the draft also stipulates that investors must deduct and set up a financial reserve fund to compensate the rest of losses and damage to assets during the business process after being compensated by compensation money of organisations, individuals that caused damage; Investors must pay insurance for investment and development of agricultural land to ensure return of land and land rent.

Assoc. Prof. Dr. Doan Hong Nhung, representative of the Faculty of Law, Vietnam National University, said the policy of land consolidation and exchange to apply hi-tech agriculture required an ethical and visionary investors. Provisions in the draft decree need to be tight to eliminate the enterprise's acquisition of agricultural land. Similarly, Dang Thi Bich Thao, Institute of Economic and Policy Research, Hanoi National University, said that in order to have a strong agricultural sector, it was necessary to encourage farmers to accumulate land and build professional farmers, self-cooperating in the form of cooperatives or cooperating with enterprises for development. Currently, agricultural land was still small, not concentrated so farmers became semi-professional, small ones. “Currently, enterprises have the strength in providing markets, inputs, consumption, factories..., farmers have the strength in working with seedlings. I think that it is necessary to concentrate land for farmers and link up the chain with enterprises, not give all of the farmers' land to enterprises”,. Thao emphasised.

The State must form an agricultural land fund

At present, many enterprises have concentrated on agricultural land accumulation, but all agreements come from enterprises with farmers without the participation of local authorities. Since then, it has created many disadvantages for enterprises and farmers.

Dang Thi Bich Thao mentioned that in reality, a few years ago in Son La province, there was a movement of planting rubber, so an enterprise wishing to produce rubber had called for the people to contribute capital with the agricultural land use right and became workers in the production facility of this enterprise. However, the planting of rubber trees in Son La was not suitable and at that time, the rubber price went down, so the enterprise faced difficulties. After that, the enterprise went bankrupt and the people hardly benefited.

Thao commented: “From here it can be seen that when people contribute land to enterprises for production, the locality must have support and connect enterprises with people. For the people, the government has an important role to play to ensure their rights. The Government needs to provide right and sufficient information and provide legal support to disadvantaged groups so that they can make the right decisions in the process of contributing capital to enterprises with agricultural land use rights”.

In Ha Nam province, Vietnam National Seed Group has also accumulated 20 hectares of agricultural land to build hi-tech agriculture. Currently, the Department of Natural Resources and Environment of Ha Nam Province is implementing a contract on leasing land with enterprises and enterprises must pay land rent once for 20 years. Tran Kim Lien, General Director of Vietnam National Seed Group said: “When building a high-tech agricultural system in Ha Nam province, we have to build entire roads, water supply and drainage systems, warehouse, working place. These infrastructures are entirely on agricultural land and it is illegal activity, so there is no legal basis to ensure the assets invested by the enterprise. Currently, Ha Nam province has to "ignore" the jobs of enterprises, but anytime, the management agencies can sanction enterprises for illegal construction on agricultural land”, Lien said. Currently, the accumulation and concentration of agricultural land are agreed by enterprises and farmers, and the government did not participate in this. Lien proposed that the State should play a role in forming agricultural land fund and have appropriate policies to support enterprises.