+ Goods exported for the first time at a loss due to mobilizing new investment;
+ Export to new markets;
+ World prices suddenly decrease or due to fluctuations in foreign exchange rates.
- Partial support of loan interest for temporary storage awaiting export.
- Support part of the Association's expenses in market expansion and trade promotion activities.
- Partial support for members in the process of producing export goods facing risks.
Because this decision was issued at a time when the prices of most of Vietnam's key agricultural products were too low, most businesses suffered losses. Therefore, to date, no industry fund has been established.
According to WTO regulations, this form of fund establishment does not distort trade, so it can be applied. In the future, this form should be promoted.
(2) Decision No. 195/1999/QD-TTg dated September 27, 1999 of the Prime Minister on the establishment of the Export Support Fund. The subjects of support are import-export businesses (mainly agricultural products), businesses producing goods for direct export and other businesses according to the Prime Minister's decision. Forms of support include: Support for bank loan interest rates (part or all of the loan interest rate); support for interest rate differences; financial support; export rewards.
Phase 2001 - 2002: The main measure is to focus on export rewards for products facing market difficulties and prices falling too low, greatly affecting farmers' lives.
In 2001, export rewards were given to four agricultural products: rice, coffee, pork and canned vegetables.
In 2002, expanded to 10 product groups, bonus levels for each item, each year as follows:
Export bonus level 2001 - 2002
Unit: VND/USD
Item
Bonus level | ||
Year 2001 | 2002 | |
1 - Rice | 180 | 180 |
2 - Coffee | 220 | 220 |
3 - Meat | ||
Including: - Suckling pigs | 280 | 280 |
- Pork pieces | 900 | 900 |
- Other meat | - | 100 |
4 - Vegetables | ||
Including: - Canned vegetables | 400 | 400 |
- Boxed fruit | 500 | 500 |
- Other vegetables | - | 100 |
5 - Tea | - | 400 |
6 - Peanuts | - | 120 |
7 - Pepper | - | 100 |
8 - Cashews | - | 100 |
10 - Bamboo and rattan | - | 100 |
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2003 - 2004: The world agricultural market situation has gradually improved, and export has become less difficult. On the other hand, it is also necessary to minimize the mentality of relying on and waiting for support from the State. Export rewards have been replaced by encouraging competition. Decision 1116/2003/QD-BTM dated September 9, 2003 on export reward regulations for the export turnover in 2003 exceeding that in 2002. Of the 12 items eligible for rewards, agricultural products account for 8 items.
The regulations are as follows:
The turnover in 2003 must be higher than in 2002.
As for rice, coffee, pepper, and cashew nuts (processed), this only applies to cases where the export turnover of these groups in 2002 must reach the following levels:
Rice: 1 million USD or more. Coffee: 0.5 million USD
Pepper, cashew nuts (processed): 0.1 million USD.
Bonus in 2003 for excess turnover
STT
Item | Bonus level (VND/USD) | |
1 | Meat of all kinds | 1000 |
2 | Vegetables and fruits of all kinds | 1000 |
3 | Tea of all kinds | 1000 |
4 | Rice | 300 |
5 | Coffee | 300 |
6 | peanuts | 300 |
7 | Pepper | 300 |
8 | Cashew nuts (processed) | 300 |
10 | Bamboo and rattan | 300 |
Export support in 2003 decreased significantly compared to 2002 because only the excess turnover was rewarded.
Calculating the actual amount of support is very difficult. Because in addition to the above policy factors, it also depends on other factors such as: Whether businesses have completed all procedures or not; Small-scale trade not through bank accounts, rice export activities under the Government Agreement, export to repay the Government's debt, etc. are not rewarded; The review and distribution also lasts from the previous year to the following year.
(3) Regarding export performance bonuses, each year about 11 - 15 billion VND is spent to encourage growth in turnover, new products, and new markets. In fact, this bonus policy is mainly for competition encouragement, and cannot be considered a form of export subsidy.
In addition to the above program of export rewards, there are also some specific decisions for some specific products as follows:
+ For rice products : Abolish the rice export hub (since 2001), do not compensate for losses for rice exporting enterprises. Only during this period, the Government supported the sale of rice on deferred payment to Cuba in 2005 in Decision No. 1125/QD-TTg dated October 22, 2004 of the Prime Minister. Accordingly, the Export Support Fund subsidizes commercial bank loan interest rates for enterprises implementing rice export contracts to Cuba.
+ For pork products : No compensation for pork export losses.
+ For coffee : No support for businesses to buy coffee for temporary storage for export.
+ For fruits and vegetables : Eliminate export subsidies for canned pineapple to the US market. Do not support the export of processed fruits and vegetables to Russia.
In fact, the Agreement on Agriculture allows developing countries to apply two forms of export subsidies: subsidies to reduce export marketing costs for agricultural products (except for normal export promotion and advisory services), including costs of handling, upgrading and other processing costs, and subsidies for domestic and international transportation costs for exports. However, Vietnam has not applied this form of support.
Recently, the Prime Minister has approved the export market development strategy for 2004-2005. According to Decision 266/2003/QD-TTg dated December 17, 2003, in order to increase the competitiveness of export products, various policies on finance, credit, investment, fees and charges have been revised or expanded, with a focus on long-term investment credit to increase
production capacity, especially for industries processing raw materials for export production. In addition, trade credit guarantees are also expanded with a focus on new technology investment projects for export goods, and on highly effective export contracts. Credit will also be gradually provided to entities that regularly import large volumes of Vietnamese goods for the regional market. According to Decision No. 226, the number of items enjoying export incentives will be reduced, and accordingly, bonuses will focus on key goods with high competitiveness and items using raw materials, with large local supplies. Direct financial support is also limited and instead, support for raw material suppliers, scientific, technical and technological solutions to improve the production situation for export goods.
In addition to the activities of the Export Support Fund, the State is also considering early completion of the operating regulations of the Export Support Credit Fund as a basis for lending and guaranteeing export credit. In addition, agricultural product export activities also receive support from the Development Support Fund in the form of investment loans with preferential interest rates for production, processing and trading projects of export goods of enterprises in industries that are preferential under the Law on Domestic Investment Promotion with an export proportion of 30% or more (Decision 02/QD-TTg dated January 2, 2001 on investment support policies from the Development Support Fund).
3.2.3.3. Trade promotion policy group
The Ministry of Finance issued Circular 86/2002/TT-BTC dated September 27, 2002 on guidelines for expenditures to support trade promotion activities to boost exports under the national key trade promotion program. The Ministry of Trade issued Decision No. 104/2003/QD-BTM dated January 24, 2003 on regulations for building and managing national key trade promotion programs.
Support content for activities: trade information, propaganda, promotion, database building; export consulting; advanced training
capacity, skills in export business, fairs, exhibitions; market survey, search; brand and product promotion; initial costs for building bonded warehouses, trade promotion centers, product introduction centers at home and abroad; research on e-commerce applications for export. Support level from 50 - 70% depending on the type. Industry associations, large corporations are the focal agencies to organize trade promotion programs of their industry.
Approved agricultural products in this program are rice; tea; coffee; pepper; vegetables; wood products; pork, processed foods;
In 2003, the first year of implementing this policy, a number of corporations and industry associations in the agricultural sector were approved for this program such as rice, tea, coffee, vegetables, pepper. The main activities were market surveys, information support, exhibitions, etc. Due to slow implementation (plans were only available at the end of the year) and complicated disbursement procedures, businesses were only able to disburse about 10-15% of the assigned plan.
In 2004, 15 associations and corporations in the agricultural sector were approved for this program with a total program cost of 86 billion VND, of which the budget support was 56 billion VND. However, according to reports from the units, the disbursement rate was very slow due to strict financial procedures, so it is possible that only 30-50% of the approved budget can be implemented.
3.3. SOLUTIONS FOR DEVELOPING AGRICULTURAL LAW AND POLICY
3.3.1. Viewpoints on protecting domestic production and supporting agriculture The 9th Party Congress affirmed the policy of "highly promoting
internal strength, at the same time taking advantage of external resources and proactively integrating for rapid, effective and sustainable development".
One of the requirements of international economic integration is to gradually remove barriers in trade of goods, services and investment, and to implement trade liberalization. Some measures to protect and support production in
Water, including agriculture, is still maintained, but must follow certain rules.
Vietnam is a developing country, the protection and support for agricultural production and trade in the process of international economic integration is necessary, however, the issue of support and protection for production and trade is a very sensitive issue in trade policy. In the process of economic development towards proactive international economic integration, Vietnam has affirmed that it does not take protectionism as the foundation and trend for its trade policy. Although it clearly understands the role of integration in the process of economic growth, in the process of industrialization and modernization, including the great role of product flows participating in the input of production, the import of technology and commercial science, but in the conditions of domestic agriculture, it is impossible not to set out the need for protection for each product, each period in order to create a healthy trade environment and enhance the competitiveness of domestically produced goods in the domestic market. It should be noted that protectionist policies in general and agricultural protection in the process of economic integration must have the effect of supporting domestic products to rise up in competition; at the same time, we must not forget the interests of consumers because of production protection. Here, protection of domestic production is considered as positive protection in the trend of trade liberalization. It is completely different from protection in the conditions of a closed economy, import substitution production.
Protection must create competitive advantages for Vietnamese agricultural products in domestic and international markets:
Export-oriented production and import substitution of domestically produced products with efficiency are the strategies that Vietnam pursues in the process of Vietnam's integration into the global economy. Implementing this strategy requires our country to implement a system of free trade policies as the main trend, protectionism is only a temporary policy and must aim to improve competitiveness including international competitiveness.
of the family, of the business and of the product in the market. Today's market is more global than ever, therefore, global competition is a prominent feature of the world economy today.
Looking back at the current globalization process, we can see that the emergence of so many global markets and companies, in the past the size of the company was very important, but today the size of the aggregation, that is, the network and infrastructure, is important. Today's globalization model increasingly puts specialization in making specific products in different specific locations in the world first. Therefore, a new model of competition appears. It is a model based on specialization, meaning that countries will prosper in the fields in which they achieve specific specialization.
On the part of manufacturers, it is necessary to build a competitive strategy that adapts to the new model of competition in the conditions of globalization. It is necessary to create an environment in which they themselves expect progressive change, not against it. An environment in which manufacturers actively destroy their products instead of competitors doing so, an environment in which manufacturers determine the appropriate scale for themselves rather than letting others do it.
Protection policies and regulations must be implemented selectively:
Our country has favorable natural conditions, climate and human resources to produce a variety of agricultural products, especially tropical agricultural products. Finding agricultural products with comparative advantages and competitive advantages is of particular importance in the process of our country's agriculture participating in the international division of labor. In this process, state support is needed. However, the state should not and cannot provide widespread protection, and must carefully select protected industries. The principle here is to protect only products whose domestic production meets the needs of economic growth, has development potential, attracts a lot of labor and has advantages.