“Orientation to prioritize the use of ODA capital and preferential loans for the agriculture and rural development sector in the period 2026-2030”

Binh Dinh Bridge

The ISG Plenary Conference is a high-level event held annually between the Ministry of Agriculture and Rural Development and foreign partners to exchange and share policy orientations and priorities of both sides to promote cooperation and enhance coordination of resources to contribute to the development of Vietnamese agriculture.

Sharing at the Conference, Minister Le Minh Hoan stated the reality that Vietnam has become a middle-income country and no longer enjoys low interest rates, the number of projects and the value of ODA capital and preferential loans for the agricultural sector have decreased significantly, along with the reduction of technical assistance and non-refundable capital.

 “In order to continue to mobilize and promote the advantages of international knowledge, experience, initiatives and resources to support the industry in implementing the approved goals in Decision No. 150/QD-TTg dated January 28, 2022 on the Strategy for Sustainable Agricultural and Rural Development for the 2021-2030 period, with a vision to 2050, the Ministry of Agriculture and Rural Development organized the Conference today with the participation of many sponsors, development partners, and international organizations to share the orientations and needs of the industry and the Ministry and grasp the orientations and priorities of partners, on that basis to identify and coordinate specific cooperation plans in the coming time”, said Minister Le Minh Hoan.

Minister of Agriculture and Rural Development Le Minh Hoan spoke at the conference.

 According to the report at the conference, in the period of 2016-2020, the Ministry of Agriculture and Rural Development approved and signed 5 loan programs and projects with a total value of 826 million USD, including 662 million USD in loans. Meanwhile, in the period of 2021-2025, the Ministry mainly proposed and prepared new projects, and no loan agreements have been signed. The total expected loan capital for new projects under preparation is about 2 billion USD, non-refundable capital is about 58 million USD, and counterpart capital is about 478 million USD. Of which, 5 projects have been approved by competent authorities with a total loan capital of about 750 million USD. Regarding non-refundable aid, the Ministry of Agriculture and Rural Development currently has 112 projects under implementation (approved from 2016 to present) with a total non-refundable capital of about 300 million USD.  Currently, the approval procedures for 32 more projects with aid capital of about 9 million USD are in progress. The partners providing non-refundable capital are very diverse, including key partners including Germany, the Netherlands, Japan, Korea, the UK, the US, New Zealand, Canada, Australia, Ireland, Belgium, France, United Nations agencies, GEF, GCF, non-governmental organizations, etc.

The conference assessed that the proportion of ODA capital in the total development investment capital of the Ministry of Agriculture and Rural Development was at one point approximately 50%. Most of the ODA loans have been used for investment projects to develop infrastructure, support production promotion, hunger eradication, poverty reduction, livelihood improvement, climate change response, natural disaster and epidemic prevention, ensuring hygiene and food safety, etc. At the same time, ODA capital and preferential loans have effectively supported the development and completion of policy institutions, and capacity building for the sector from the central to local levels.

Ms. Mariam Sherman - Country Director of the World Bank in Vietnam, Cambodia and Laos assessed that in the past time, the WB and the Ministry of Agriculture and Rural Development have closely coordinated in mobilizing and using ODA capital and preferential loans and achieved many positive results.

Currently, the demand for ODA capital and preferential loans in Vietnam is still very large.  The WB wishes to continue to accompany Vietnam in addressing the limitations of attracting and using ODA capital in the agricultural sector; providing comprehensive support packages (finance, technology, policy advice, etc.); building an effective ODA program, bringing long-term benefits to the Vietnamese people.

The WB Country Director proposed to coordinate with the Government and ministries, sectors, localities, associations, and industries to build a network of development partners in Vietnam, to more effectively implement upcoming projects.

 Based on the Strategy for Sustainable Agricultural and Rural Development for the period 2021-2030, with a vision to 2050, the conference clearly defined the orientation for attracting, managing and using ODA capital and preferential loans for the period 2026-2030 as follows: Changing the mindset from "agricultural production" to "agricultural economy" thinking, focusing on improving value, efficiency and diversification along the value chain in accordance with market requirements. Shifting from single-sector development to multi-sector and multi-sector integration, from "single value" to "integration of multiple values". Orienting "green" development towards ecology, organic, circular, low carbon emissions to improve growth quality, added value, competitiveness and sustainable development. ODA loans and preferential loans are prioritized for the following areas: Rural infrastructure; Irrigation infrastructure, natural disaster prevention;  Aquaculture infrastructure: aquaculture, marine resource protection; Environmental sanitation and rural water supply; Forest regeneration, sustainable forest management, reducing emissions from deforestation; Infrastructure serving key agricultural, forestry and fishery value chains associated with green growth, low emissions; Support for high-tech agriculture. Prioritize the use of technical support and non-refundable aid for cooperation in implementing the application of management science and technology in all fields (livestock, cultivation, varieties, forestry, agriculture, irrigation, aquaculture, etc.); support for capacity building, especially improving capacity in policy making; Support in responding to natural disasters, climate change, disease prevention; support for value chain development associated with digital transformation, green transformation, emission reduction, multi-value integration; support for programs and projects to conserve and develop forests; protect the environment and ecosystems; support for clean water and sanitation;  support livelihood development, community development in disadvantaged areas./.