DECREE OF THE GOVERNMENT

On the reorganization, renovation, and development of state-owned agricultural farms

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Land Law dated November 26, 2003;

Pursuant to the State Enterprise Law dated November 26, 2003;            

At the request of the Minister of Agriculture and Rural Development,

DECREE

PART I

 GENERAL PROVISIONS

Article 1. Scope of regulation and applicable subjects

1. This Decree stipulates the reorganization, renovation of organizational structure, management mechanisms, and policies for state-owned agricultural farms.

2. The objects subject to this Decree include state-owned agricultural farms and state-owned agricultural enterprises (referred to collectively as state-owned agricultural farms in this Decree) that have been assigned land or leased land by competent state authorities for the primary purpose of agricultural production.

Article 2. Objectives of reorganizing and renovating state-owned agricultural farms

1. To sustainably and effectively utilize the land and existing infrastructure and technical facilities of state-owned agricultural farms.

2. Enhance the efficiency of production, business operations, and competitive capacity of state-owned agricultural farms; form concentrated agricultural product production areas linked with processing and consumption markets.

3. Create additional job opportunities, increase income for workers, contribute to economic and social development, eradicate poverty, and ensure security and defense in the region.

Article 3. Principles of reorganizing and renovating state-owned agricultural farms.

1. Reorganizing and renovating state-owned agricultural farms must be aligned with regional socio-economic development plans and agricultural development plans.

2. Reorganizing and renovating state-owned agricultural farms must ensure clear distinctions between business production and operation tasks and public service tasks.

a) State-owned agricultural farms primarily engaged in business operations shall fully transition to market-based production, business operations, and accounting.

b)  For state-owned agricultural farms transitioning to business operations but still required to undertake certain social and security functions, the State will provide appropriate support policies.

c) State-owned agricultural farms mainly tasked with public services shall operate in accordance with Article 19 of the Law on State-Owned Enterprises.

Chapter II

 REORGANIZATION  STATE-OWNED AGRICULTURAL FARMS

Article 4. Conversion of state-owned agricultural farms

1. State-owned agricultural farms specializing in perennial crop production with relatively complete infrastructure, generating profits or covering costs, shall continue to consolidate and enhance their effectiveness through intensive cultivation of planted areas, investment in improving, upgrading, and expanding existing processing facilities or constructing new ones, attracting participation from organizations and individuals inside and outside the farm through shareholding; expansion of new planting areas should only occur when there is a truly effective project. Unused or inefficiently used land areas shall be reclaimed by local authorities for use according to laws on land.

2. State-owned agricultural farms engaged in annual crop production and livestock farming, which have been stably and long-term contracted to workers, shall form large-scale concentrated commercial production areas supplying raw materials for processing and exportable agricultural products; if profitable or covering costs, they shall continue to consolidate and reorganize production, serve as centers for providing seeds and livestock breeds, establish models for applying and transferring advanced technologies, develop processing and marketing of agricultural products for farmers in the region.

3. State-owned agricultural farms producing annual crops and livestock with poor processing facilities, ineffective business operations, and white contracting of land to workers shall retain only part of the area for seed production and technology application models for farmers in the region, while the remaining land shall be reclaimed by local authorities for leasing or other more efficient uses according to laws on land.

4. Dissolve state-owned agricultural farms with weak management, continuous losses for three consecutive years, or whose current income mainly depends on land rental revenues.

5. Continue to maintain or newly establish state-owned agricultural farms in remote, border, and island regions with significant ethnic minority populations and special security needs. These farms shall manage only suitable areas for seed production, technology application models, and construction of processing facilities to serve the local population; closely integrate economic and social development with security and defense.

Article 5. Operational Mechanism of State-Owned Agricultural Farms

1. State-owned agricultural farms with 100% state capital shall operate under the Law on State-Owned Enterprises; upon conversion to joint-stock companies, they shall operate under the Enterprise Law.

2. For state-owned agricultural farms performing public service tasks: products and services of these farms shall be ordered, planned, or tendered by the State at prices or fees set by the State.

3. State-owned agricultural farms engaged in production and business operations but also required to undertake certain social and security functions in remote, border, strategic defense, and particularly difficult socio-economic conditions, the State shall implement appropriate policies as prescribed by the Prime Minister.

Chapter III

 IMPLEMENTATION MEASURES

Article 6. Regarding Land

1. State-owned agricultural farms shall self-inspect and declare land usage, reporting to provincial people's committees and superior agencies such as ministries, ministerial-level agencies, government agencies, and state-owned holding companies according to guidelines provided by the Ministry of Natural Resources and Environment.

2. Provincial people's committees shall lead and coordinate with ministries, ministerial-level agencies, government agencies, and state-owned holding companies to guide state-owned agricultural farms to develop or adjust detailed land use plans consistent with approved local land use plans, industry development plans, socio-economic development plans, reorganization, renovation, and development plans for state-owned agricultural farms, and results of land fund reviews of state-owned agricultural farms.

Detailed land use plans must clearly define the area of each type of land retained for use, land use plans, land use periods, and land handed over to localities.

3. Provincial people's committees shall review and approve detailed land use plans for state-owned agricultural farms within their jurisdiction.

4. Based on the restructuring, reform, and development plan for state-owned farms approved by the Prime Minister, the provincial people's committees under the central government shall carry out the transfer of land and leasing of land to state-owned farms.

5. Forms of land transfer and leasing:

a) The State shall transfer land without collecting land use fees to state-owned farms as stipulated in Clauses 2 and 3 of Article 5 of this Decree.

b) The State shall lease land or transfer land with collection of land use fees to state-owned farms engaged in production and business activities.

6. For areas of land that have been allocated to households of workers and employees who comply with contracts and use the land for its intended purpose, the allocating households may continue to use the land according to the signed contract and make appropriate adjustments and supplements in line with the farm’s land management responsibilities. Areas of land leased outright to the allocating households (in essence, land leasing), must go through procedures to recover the land and convert to land transfer or leasing forms as prescribed by the law on land.

7. For areas of land of state-owned farms that have been encroached upon, disputed, or violated, the provincial people's committees under the central government shall direct the resolution of each specific case according to the provisions of the law.

8. The provincial people's committees under the central government shall direct the implementation of the specific demarcation of land boundaries, land markers, measurement, establishment of land records, and issuance of certificates of land use rights for state-owned farms using land.

9. The provincial people's committees under the central government shall recover areas of state-owned farms that are not being used, used for purposes other than intended, used inefficiently; areas of land that have been leased, transferred, or lent; areas of land where orchards have been sold; areas of land that must be dissolved; and areas of land that must be adjusted due to reduced production and business tasks approved by competent authorities for management and use in accordance with the law on land.

State-owned farms must hand over all files on land funds that have been recovered to the provincial people's committees under the central government where the land is located.

10. Recovered land areas shall be transferred or leased according to the following provisions:

a) priority shall be given to transferring land to households and individuals who are cadres, workers, and staff of state-owned farms whose land has been recovered and who no longer work at those farms or whose farms have been dissolved for agricultural production, salt making, or aquaculture.

b) priority shall be given to transferring land to ethnic minority groups and farming households currently living in the locality but lacking production land or having insufficient production land.

The term of land transfer and the limit of agricultural land transfer to the subjects specified in points a and b of this clause shall be implemented according to the current regulations of the law on land.

c) For areas of state-owned farms that have been allocated to households and individuals, these households and individuals shall be granted land or lease land. The limit of land allocation shall be implemented according to the current regulations of the law on land. The term of land use shall be calculated from the date of allocation.

d) Continue leasing land to organizations, households, and individuals currently leasing land. The term of land use shall be calculated from the date of leasing.

đ) For areas of land that state-owned farms have cooperated or associated with other economic sectors, land shall be transferred with collection of land use fees or leased to partners who have cooperated or associated. The term of land use shall be calculated from the date of signing the contract.

e) For agricultural land with orchards that have been sold or livestock pens that have been sold, land shall be leased to organizations, households, and individuals who have purchased the orchards or livestock. The term of land use shall be calculated from the date of purchasing the orchard or livestock pen.

g) Remaining areas of land after allocation and leasing as provided in points a, b, c, d, đ, and e of this clause shall be allocated or leased to other eligible subjects in accordance with the local land use planning and plans that have been reviewed.

h) Organizations, households, and individuals using land as stipulated herein shall be issued certificates of land use rights after completing the procedures for land transfer and leasing and fulfilling financial obligations as prescribed by the law.

11. Residential land shall be handed over to the district, urban district, town, or city people's committees under the province where the land is managed; if the land user is consistent with the approved land use planning and plans, they shall be issued certificates of land use rights and must fulfill financial obligations as prescribed by the law.

Article 7. Regarding capital, assets, and finance

1. State-owned farms are responsible for inventorying, classifying, and determining various types of capital, assets, and debts currently held; preparing financial reports up to the point of restructuring and reform.

2. State-owned farms implementing restructuring, dissolution, or ownership conversion according to approved plans shall be considered and resolved regarding financial, asset, and debt issues as with state-owned enterprises.

3. State-owned farms shall hand over assets including roads, irrigation works, schools, health stations built and currently managed and used by the farms to serve common needs in the area to the provincial people's committees under the central government or units authorized to manage and use them; hand over  the power system managed and used by the farms to the Vietnam Electricity Corporation for management. These assets shall be handed over in their original condition both in terms of assets and capital as reflected in accounting books at the time of handover. The deadline for completion is before December 31 2004. 4. The Ministry of Finance shall provide detailed guidance on the financial mechanism when handing over between state-owned farms and related parties.

6. For state-owned farms in remote, border, island, strategic defense areas, and areas with extremely difficult socio-economic conditions, investment plans, maintenance, and repair of infrastructure

5. shall be arranged. shall leave funds for liquidating orchards, planted forests, livestock herds, depreciation reserves, to invest in intensive cultivation, replanting orchards, purchasing equipment, modernizing technology, constructing infrastructure according to approved planning and plans by competent authorities.

6. For state farms located in remote areas, border regions, islands, strategic national defense zones, and areas with particularly difficult socio-economic conditions, investment plans, maintenance, and repair of infrastructure shall be arranged.  to support the socio-economic development through the state budget.

7. Privatize factories and processing facilities according to current laws on privatization. Conduct pilot privatization of orchards linked with processing facilities of state farms. Implement preferential share sales to raw material producers.

Article 8. Labor policy.

1. State farms shall review the number of officials, employees, and workers at the time of restructuring and modernization; develop plans for staff deployment of officials, workers, and employees of state farms in a manner suitable to their capabilities and specialties, and report to the competent authority. For workers during the process of restructuring and reorganizing production in state farms who cannot be reassigned, they will be handled according to the provisions of Decree No. 41/2002/NĐ-CP dated April 11, 2002

2. and Decree No. 155/2004/NĐ-CP dated August 11, 2004 of the Government regarding policies for surplus labor due to enterprise restructuring. 3. For workers who have been allocated land by state farms, if the employment relationship between the employer and employee is terminated, they will not be handled according to the provisions of Decree No. 41/2002/NĐ-CP dated April 11, 2002 and Decree No. 155/2004/NĐ-CP dated August 11, 2004 of the Government but will be provided with termination benefits according to Article 42 of the Labor Code.

4. For officials such as Directors, Deputy Directors, Chief Accountants, and members of the Board of Management (if any), who are surplus due to restructuring, they will enjoy policies as stipulated in Resolution No. 09/2003/NQ-CP dated July 28, 2003 of the Government amending and supplementing Resolution No. 16/2000/NQ-CP dated October 18, 2000 of the Government on streamlining the staffing of administrative agencies and public service units. The funding source will be from the Labor Surplus Support Fund according to Decree No. 41/2002/NĐ-CP dated April 11, 2002 and Decree No. 155/2004/NĐ-CP dated August 11, 2004 of the Government. Officials and workers who have been allocated land for farming, orchards, livestock until retirement age may continue to fulfill the lease contracts until the end of the contract period. Upon expiration of the lease contract, if there is a need, they will be given priority for continued leasing. 6. Officials and workers of state farms who lease land, orchards, and livestock herds and earn income based on the results of leasing land, orchards, and livestock herds must fully comply with the regulations on labor contracts; wages, social insurance, health insurance, and labor protection costs are included in production expenses and reflected in the lease contracts.

If workers still receive salaries based on rank and position while leasing, the leased work

5. must be reflected in the content of the labor contract according to current regulations. Wages of workers whose earnings are included in the lease results must clearly specify the wage payment method in the labor

contract. 8. Workers currently employed in state farm facilities, when transferred to local management according to Clause 3, Article 7 of this Decree, the locality shall be responsible for receiving, arranging, and handling worker benefits according to current regulations.

7. On science and technology  1. State farms shall actively implement the application of new scientific and technological advancements and high technologies in production, processing, and post-harvest product preservation. 2. Implement cooperation and collaboration forms between state farms and central, regional, and local research institutes, schools, centers, and scientific research facilities in protecting genetic resources, selecting, breeding, and producing high-yield, quality crop and livestock varieties with strong market competitiveness. động.

3. State farms must become centers for transferring and applying scientific and technological advancements, providing agricultural extension services, forestry promotion, and market information to workers within the state farms and farmers in the region; the State will provide partial funding from the annual agricultural extension budget of the Ministry and localities to carry out these tasks.

Article 9. The Ministry of Agriculture and Rural Development shall take the lead, coordinate with the Ministry of Finance, the Ministry of Natural Resources and Environment, the Ministry of Home Affairs, the Ministry of Labor, Invalids, and Social Affairs, and related ministries to guide the implementation of this Decree.

2. The Ministry of Natural Resources and Environment shall take the lead, coordinate with relevant ministries and sectors to guide the review, planning, management, and utilization of land in state farms.

3. The Ministry of Finance shall take the lead, coordinate with the State Bank of Vietnam, the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, provincial people's committees, and centrally-administered city people's committees to guide the management and utilization of capital, assets, finance, related policies, and support funds for the restructuring and modernization of state farms.

4. The Ministry of Agriculture and Rural Development shall review the restructuring and modernization proposals of state farms submitted by localities and state-owned corporations for approval by the Prime Minister.

Chapter IV

IMPLEMENTATION

Article 10. Responsibilities of Ministries and Sectors

1. 5. Ministries of Defense and Public Security shall review the restructuring and modernization proposals and development plans of state farms and state-owned corporations under their jurisdiction for approval by the Prime Minister.

6. Enterprise Reform, Restructuring, and Development Committees of ministries and localities shall undertake the tasks of restructuring, modernizing, and developing state farms under ministries, provincial people's committees, and centrally-administered city people's committees.

Responsibilities of provincial and centrally-administered city people's committees

Develop restructuring, modernization, and development plans for state farms to submit to the Prime Minister for approval before June 2005 and organize their implementation.

2. Based on the results of land reviews and adjustments, determine boundaries and issue decisions on land allocation or leasing and issue certificates of land use rights to state farms.

3. Direct relevant departments to guide and inspect state farms in developing land use plans, modernization, and restructuring plans.

Article 11. Responsibilities of state-owned corporations

1. Develop a Scheme on the reorganization, renovation, and development of state farms to be submitted to the Prime Minister for approval before June 2005 and organize its implementation.

2. Based on the results of the review, adjust land use, determine boundaries, and issue decisions on land allocation or leasing and issue certificates of land use rights to state farms.

3. Direct relevant sectors to guide and inspect state-owned farms in developing land use plans and schemes for renovation and reorganization.

Article 12. Responsibilities of State-Owned Corporations

1. Draft a restructuring plan for existing state-owned farms to be submitted to the Prime Minister for approval (for State Corporation 91); submit to the relevant ministry for review before submission to the Prime Minister for approval (for State Corporation 90) by June 2005. The restructuring plan  for state-owned farms of the State Corporations must have the agreement of the provincial people's committee or the municipal people's committee under the central government. For State Corporations located in provinces or municipalities directly under the central government, submit to the provincial people's committee or the municipal people's committee under the central government for submission to the Prime Minister for approval.

2. Coordinate with the people's committees of provinces and municipalities directly under the central government to review the land fund currently managed and used, and to develop or adjust the land use planning of the farm for approval by the provincial people's committee or the municipal people's committee under the central government.

3. Direct the state-owned farms to implement restructuring, renovation, and development according to the approved plan.

Article 13. Responsibilities of state-owned farms

1. Conduct a review of the land fund currently managed and used, and develop or adjust the land use planning of the farm for approval by the provincial people's committee or the municipal people's committee under the central government.

2. Prepare reports on production and business operations over the years, profit and loss situations, labor conditions, assets, materials, capital, management work of the farm; production and business plans, renovation plans to be submitted to the competent authority for approval.

3. Implement the restructuring plan for the farm after it has been approved.

Chapter V

IMPLEMENTING PROVISIONS

Article 14. Effectiveness and Responsibility for Implementation

1. This Decree takes effect fifteen days after its publication in the Official Gazette.

2. All previous regulations that conflict with this Decree are abolished.

3. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairmen of the people's committees of provinces and municipalities directly under the central government are responsible  for implementing this Decree  This concludes the Decision./.