Key Solutions for Innovation in Infrastructure Investment to Serve Agricultural Production Development from State Budget Capital

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+ Regarding Forestry: Investing in developing infrastructure to serve concentrated afforestation of raw materials for industry; increasing the coverage of upstream forests, for national parks, nature reserves,... to complete the targets of major programs and projects such as the 5 million hectare afforestation program. Modernizing scientific research and training facilities, seed production centers; Forestry infrastructure development must be unified with the complete irrigation infrastructure system to serve the needs of agricultural and rural production and services.

+ Investment in developing trade service infrastructure: Investment in developing infrastructure to serve market and trade development such as: markets, wholesale centers for agricultural and forestry products, concentrated warehouses for agricultural and forestry products associated with raw material areas; building exhibitions, systems to update market information on agricultural and forestry products, first of all focusing on investing in tea auction centers, coffee and cashew trading floors, etc.

+ Invest in developing x% level transportation, villages, rural communications, ensuring the circulation of goods in all conditions, especially in concentrated commodity production areas and raw materials for industrial processing; develop communications systems, connect with market information centers in large agricultural and forestry product production areas.

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+ It is necessary to have a policy mechanism to expand the forms of ownership of infrastructure facilities of State origin. The State only plays a management role and does not directly participate in infrastructure development investment. There is a suitable policy mechanism to encourage economic sectors to invest their own capital in infrastructure development investment and then directly manage and operate the works to meet the needs of production and services in the agricultural and rural economic sectors.

- Orientation of infrastructure investment to serve agricultural production and business in each ecological region:

Reorient the focus of infrastructure investment from the state budget for agricultural production and services in inter-regional and inter-provincial areas to exploit potential.

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development potential and strengths of each region and province. In particular, priority should be given to investment in remote areas. Specifically:

+ Sharply reduce irrigation investment in the North Central and Central Coast regions to around 10%, focusing investment capital on repairing and upgrading existing irrigation works, ensuring full exploitation of irrigation potential, drainage, and water regulation during the dry and rainy seasons. Increase infrastructure investment in forestry by 4% to serve the planting of protective forests in the headwaters and coastal areas of this region (priority is given to the South Central Coast region with very low coverage of 38.16%), ensuring prevention of flash floods, flash floods, and natural disasters that frequently occur in the region. Develop ecotourism in coastal forests

+ Developing infrastructure for agriculture (about 6%) on the basis of reducing irrigation investment in the Mekong Delta and Red River Delta to focus on infrastructure investment for industrial crop cultivation and large-scale livestock farming in the Central Highlands, aquaculture in the North Central Coast, associated with marine economy.

+ During the implementation process, if there is still a shortage of infrastructure investment to serve agricultural and forestry production in the above regions, it is possible to consider reducing irrigation investment in the Mekong Delta provinces by about 3-5% (supplementing the shortage from loans, foreign investment capital, etc.). Continue to invest in infrastructure to serve afforestation to accelerate the coverage of upstream and coastal forests in areas that are often at risk of flash floods, flash floods, and weak sea dykes, with forest coverage equivalent to the current Central Highlands forest (in 2005, it was 55.4%).

+ Investment in irrigation infrastructure focuses on water management and regulation of irrigation and drainage water sources in the Red River Delta and the Mekong River Delta. The investment rate in infrastructure can be considered to be reduced by 5 to 10%. The lack of investment capital can be transferred to using government bond capital, or mobilized from other domestic and foreign sources.

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- Orientation in monitoring and evaluating infrastructure development for agricultural and forestry production:

+ Strengthen state management of inspection, supervision, evaluation of investment process and post-project management.

+ Develop a set of criteria to evaluate the correlation between increasing agricultural productivity and investing in infrastructure projects. This set of criteria can also be applied in selecting and prioritizing projects preparing to invest in infrastructure to serve agricultural production and services in the following years.

3.2. Main solutions to innovate infrastructure investment to serve agricultural production development from state budget capital

The reality of investing in building infrastructure raises issues of innovation in management of infrastructure investment and development serving agricultural production, including issues such as: Increasing the amount of capital from the budget for infrastructure investment and development; adjusting investment between initial construction items for industries and regions; focusing on investment

Points, final investment; innovation in preparation and appraisal of investment projects; reasonable decentralization of investment management between central and local levels;… are urgent issues. Below we will focus on these urgent issues:

3.2.1. Innovation in investment capital allocation methods

Research on the current status of investment in infrastructure construction for agriculture shows that: the demand for investment in infrastructure for agriculture and forestry is very large, the capital mobilized from the internal resources of agriculture and forestry has limitations. The capital from the budget for infrastructure investment for agricultural and forestry production plays a very important role. However, investment from the budget is still limited. The total capital for infrastructure investment for agricultural and forestry production only meets about 65% of the planned demand, the negative impacts due to

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Weather and climate conditions are therefore not prevented in time, greatly affecting production. Considering the relationship between social investment in agriculture and social contribution in terms of creating agricultural products to meet essential needs, contributing to GDP for the economy ... there are also shortcomings and disproportionate. Therefore, innovating the allocation of investment capital towards increasing key areas to ensure environmental safety for production development sectors and for social investment is one of the extremely important solutions to create more investment capital for agriculture in general, and agricultural infrastructure development investment in particular.

Comparison of capital mobilization results for agriculture and rural areas in the period

1996-2005 and 2001-2005 periods with capital that can be mobilized for the period

The period 2006-2010 shows that the expected mobilized capital can increase. However, the increase has not met the requirements of agricultural and rural development when entering the stage of industrialization, modernization and international economic integration. The total mobilized capital in the period 2006-2010 is 299,900 billion VND, an increase of 14.73% compared to the period 2001-2005, of which the budget capital is 76,679 billion VND, accounting for 25.5% of the total capital invested in agriculture and rural areas.

It is worth noting that the total investment capital for agricultural production infrastructure from the budget managed by the Ministry of Agriculture and Rural Development is 39,025 billion VND. The capital for investment in agricultural infrastructure construction in the next 5 years will still mainly rely on domestic budget sources, in which investment from government bonds mobilized from capital sources of economic organizations and individuals accounts for over 20% but is mainly still invested in irrigation infrastructure.

In the coming period, in addition to increasing budget capital, the State should have more attractive policies and mechanisms to mobilize more resources from foreign investors for investment in agricultural and rural development in general and infrastructure in particular.

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Special focus on solving problems in infrastructure development investment related to capital allocation methods. Specifically:

In the agricultural infrastructure development investment structure is not balanced and commensurate with the development potential of each agricultural, forestry and irrigation production sector. Irrigation investment is high (accounting for nearly 60% of the sector's investment capital) but still cannot meet the needs of irrigation, drought and flood prevention to

achieve the goal of safe production, rapidly increasing food output. Other areas, such as science and technology, plant varieties, agricultural processing technology, technical infrastructure network serving agricultural production, etc., are invested at a very low rate, not receiving attention commensurate with the development potential; these are the necessary and sufficient factors to rapidly increase productivity, improve quality and efficiency in agriculture.

The policy of focusing on investment in developing the industrialization of agricultural and rural production has been established, but in reality, there has not been proper investment in this direction. That is: The proportion of investment in agriculture is still low (about more than 13% of the total investment in developing economic sectors). The investment structure reflects the slow investment in developing rural industries; there are no effective measures to develop the farm economic sector and build new-style cooperatives. Due to inaccurate forecasts, too much attention has been paid to investment in increasing the production capacity of factories, not to investment in developing raw material areas and product output. Over-investment to rapidly increase the quantity of some product industries, following a trend, leads to supply exceeding demand, poor quality that cannot meet domestic and foreign market demand, no consumer market, causing goods to stagnate, wasting infrastructure investment of the state and people, such as sugar cane processing, dairy farming, fruit trees... All of the above shortcomings need to be quickly overcome.

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The thesis proposes orientations in innovating methods and contents of investment capital allocation with specific recommendations such as: increasing investment in agricultural infrastructure from 3,357 billion to 5,220 billion (from 8% to 13% of total investment in infrastructure managed by the Ministry of Agriculture and Rural Development). Investment in forestry from 4,591 billion to 5,835 billion (from 11.0% to 14%). Investment in irrigation is reduced from 31,078 billion to 27,970 billion (from 76% to 68%). These proposals need to be

carefully researched and appropriately allocated.

3.2.2. Innovation in methods of mobilizing counterpart funds for infrastructure investment

Infrastructure investment for agricultural production from the state budget plays a very important role. However, due to limited capital, it is necessary to establish additional capital sources from foreign capital and counterpart capital from domestic sources.

It is mainly the capital from the people that plays a very important role. In fact, the use of budget capital for large projects and the use of it as seed capital according to the method of "the state and the people do it together" has been effective. However, the mobilization of counterpart capital sources in reality still has many shortcomings. That, on the one hand, limits the capital for infrastructure development investment, on the other hand, makes the budget capital for infrastructure development investment inefficient. Based on the above problems, the thesis proposes solutions to innovate the mobilization method.

Capital mobilization responds to the following basic issues:

3.2.2.1. Innovation in investment policies, attracting foreign investment capital

invest in infrastructure serving agricultural production

In infrastructure development investment serving agricultural production, the issue of attracting investment capital plays a very important role. Because, the amount of capital for infrastructure development investment serving agricultural production is very large. Meanwhile, the internal capital resources of agriculture and rural areas are very limited.

According to the experience of countries in the region, expanding and diversifying ownership forms of rural infrastructure works,

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Marketization of the capital market for infrastructure investment will create an environment to attract investment from domestic and foreign economic sectors, especially in the coming development period, opening the market to integrate with the world economy is a mandatory and irresistible trend. From the issues

Based on the above, it is necessary to focus on the following issues to attract capital, including foreign capital.

(i) Open the investment market and capital market: by promoting policies and continuing to affirm the policy of developing a multi-sector economy, mobilizing all resources to develop production associated with the reorganization of agricultural production and rural economy. Complete the arrangement and innovation of the production organization of the state-owned agricultural and forestry farm system to adapt to the market mechanism. Basically complete the equitization of state-owned enterprises in the industry. Focus on developing the farm economic model, rapidly developing the cooperative sector, continuing to consolidate land and exchange plots. Promote the propaganda of socialization in investment in production infrastructure and agricultural and forestry services to reduce pressure on investment with the state budget only investing in infrastructure in especially difficult and remote areas where other economic sectors are not able to reach.

Furthermore, the priority of opening the market for foreign investors will focus on three main areas: the market for goods, labor and financial and monetary markets. In which, opening the financial and monetary markets is the most necessary for a country lacking capital like Vietnam. In the field that requires large investment capital and high risks such as agriculture, attracting investment is even more difficult. The State needs to have more preferential and open policies so that investors can focus on infrastructure that directly serves agricultural production and rural economy, specifically, policies need to be directed at solving the pressing issues that agricultural production and rural economic development have.

is posing as:

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- Invest in building an international quality product assessment system, strengthen product quality management, build brands for agricultural and forestry products to be able to compete with goods in the world market and even in the domestic market when Vietnam joins the world market.

Develop the market for agricultural and forestry products, as a basis for transforming the structure of agricultural production and rural economy towards achieving sustainable economic efficiency and environmental protection. Strengthen scientific and technical cooperation, transfer advanced scientific and technological achievements of the world to agriculture, support the development of joint ventures of "Three Houses" of farmers, businesses and scientists in the production and consumption of products through contracts.

- Invest in developing a system of research and forecasting market information for farmers and businesses. Organize and effectively implement the market and production information system, including collection, analysis, processing, research and forecasting, and guidance for implementation; develop market strategies for large, long-term markets for traditional products and

Vietnamese specialties.

Organize marketing and sales of agricultural and forestry products, build wholesale and retail markets, and warehouse clusters with special priority for remote areas with poor infrastructure conditions.

- Reorganize the banking system with sufficient financial capacity to compete with foreign banks (increase equity capital, handle financial backlogs, mainly bad debts), operate according to the market mechanism of commercial banks according to international standards and practices on accounting, debt classification and the roadmap for equitization of state-owned commercial banks.

The development goal of the State Bank of Vietnam in the new development stage is to innovate the organization and operation of the bank to form a set of

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