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FDI in Vietnam's agriculture on its downtrend

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HO CHI MINH CITY, Oct. 8 (Xinhua) -- Foreign direct investment (FDI) in Vietnam's agricultural sector witnessed a sharp decline in the past 15 years and is on its downtrend, according to figures from the Foreign Investment Agency under the Ministry of Planning and Investment.

FDI in Vietnam's agriculture accounted for 15 percent of the country's total registered FDI 15 years ago, but in the past three years it declined to 0.5 percent, local Vietnam News daily reported Wednesday, quoting data from the foreign investment agency.

Figures from the agency revealed that as of August 2014, there are 512 on-going FDI projects in the agricultural, forestry and fishery sector with a total registered capital of 3.4 billion U.S. dollars, accounting for 3.03 percent of the total FDI projects and 1.4 percent of the total registered capital, and ranking 10th among 18 economic sectors attracting the FDI.

To date, the country has a total of 16,910 FDI projects involving a total registered capital of 243 billion U.S. dollars.

On the average, each year about 20 FDI projects worth 130 million U.S. dollars are launched in Vietnam's agriculture sector.

Most of the FDI agriculture projects are small in scale, each worth about 6.6 million U.S. dollars, compared with 14.7 million U. S. dollars in other sectors. In addition, 78 percent of the foreign investment in the agriculture sector goes to forest plantation and wood processing projects.

Foreign investors in Vietnam's agriculture projects mainly come from other Asian countries and regions, including Thailand, China' s Taiwan and Indonesia with general technologies. There also a few investors from developed countries with advanced agriculture such as the United States, Japan and European countries.

The agency attributed the reduction of foreign investment in Vietnam's agriculture sector to the country's heavy dependence on natural conditions, small-scale and dispersed production, and the shortage of infrastructure.

According to the agency, the country also lacks a long-term strategy to attract FDI into agriculture, and its current regulations, policies and incentives for investments in agriculture still remain vague.

Agriculture has been the primary economic sector in Vietnam, contributing 20 percent of the country's gross domestic product per year and 70 percent of the total employment, said the agency.

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