Decision No. 23/2005/QĐ-BCN Approving the Project on Developing Industries until 2010 to Serve Industrialization and Modernization of Agriculture and Rural Areas

Pursuant to …;

Approving the Project on Developing Industries until 2010 to Serve Industrialization and Modernization of Agriculture and Rural Areas 2010 for industrializing and modernizing agriculture and rural areas

THE MINISTER OF INDUSTRY

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to Directive No. 24/2003/CT-TTg dated October 8, 2003 of the Prime Minister on developing processing industries for agriculture, forestry, and fisheries;

Pursuant to Action Program No. 2749/CV-KHĐT dated July 22, 2002 of the Ministry of Industry to implement Resolution of the Fifth Plenary Session of the Ninth Central Committee of the Communist Party of Vietnam;

At the proposal of the Director of the Planning Department.

DECISION:

Article 1. Approving the Project "Developing Industries until 2010 to Serve Industrialization and Modernization of Agriculture and Rural Areas" with the main contents as follows:

Clause 1. Views

Developing rural industry is one of the important tasks aimed at implementing industrialization and modernization (IRH, MRH) of agriculture and rural areas. Developing rural industry is part of sustainable development, ensuring balanced growth among regions; closely linking human resources, technological achievements with the characteristics of each region; leveraging internal strength, seeking external support, creating conditions for various economic entities and organizational forms to develop; linking industrial development with social development, paying due attention to remote and border areas, preserving and promoting cultural traditions. The development of rural industry must be linked with consolidating the whole people's defense, especially in critical areas.

Clause 2. Objectives

The general and long-term goals of IRH and MRH of agriculture and rural areas are to build a large-scale, sustainable agricultural production system that applies scientific and technological achievements; having high productivity, quality, efficiency, meeting domestic consumption and production needs, capable of competing in the market; having a reasonable economic structure, appropriate production relations, socio-economic infrastructure developed and gradually modernized, building new people and new countryside rich, equitable, democratic, and civilized.

The specific objectives of the project are: To increase the proportion of rural industry to about 32% of total industrial output value (GO) by 2010 (currently about 25%); developing rural industry according to approved regional and local industrial development plans. Attracting agricultural labor to industry, laying the groundwork for increasing labor productivity and income in agriculture; reducing the average income disparity between regions and areas to about 3.5 times by 2010 (currently approximately 5 times), creating momentum for sustainable development; participating in solving social issues thoroughly, ensuring equity, and promoting civilized industrial life in rural areas.

3. Orientation for Development

a) Group of industries serving IRH and MRH of agriculture and rural areas

- Electrical industry: Accelerate the implementation of electrification in rural and mountainous areas to create conditions for the people to improve their literacy, develop industrial and small-scale handicraft production. Strive to reach 90% of rural households having electricity by 2010, and 100% by 2020. Improve the quality of electricity supply, ensuring safety for people and equipment.

- Mechanical industry:

Closely link with agricultural production organizations and agricultural production regions. Concentratedly and selectively develop some mechanical sub-sectors and products such as power machines, equipment for mechanizing land preparation, harvesting, post-harvest preservation, and processing equipment.

Agricultural machinery products must be diverse in scale and technological level, types, styles, and models suitable for different local conditions and usage levels. Develop services for providing and repairing agricultural machinery.

Combine advanced technology with medium technology, creating conditions for applying technical progress in agricultural, forestry, and fishery production. Encourage all economic sectors to participate in producing agricultural machinery from simple to complex, utilizing capital from the people to develop machinery production for agriculture and rural areas.

- Chemical industry: Supply basic chemical products for crop cultivation, animal husbandry, aquaculture, and environmental protection. First, meet the basic needs of agricultural production for fertilizers, plant protection chemicals, and post-harvest preservation materials.

b) Group of industries developing in the agricultural and rural areas

- Processing industry for agriculture, forestry, and fisheries: Strive to achieve more than $8 billion in export value of processed agricultural, forestry, and fishery products in 2005, accounting for about 30% of the total export value of industrial goods nationwide. In terms of added value (VA), strive to reach a ratio of VA/GO of about 39% in 2005 and 47% in 2010.

Plan concentrated production areas with comparative advantages in raw materials. Build rural transportation systems, electrical, water, and irrigation systems to serve planting, breeding, transporting, and processing agricultural products, forming a complete and closed system.

- Textile and footwear industry: The objectives of this sector are as follows

TABLE 1: INDUSTRIAL OUTPUT VALUE OF TEXTILE AND FOOTWEAR

Source: Regional Development Plan for the Textile and Footwear Industry until 2010

- Building materials production industry: Develop building materials production in quantity, quality, and variety to meet domestic consumption needs, housing construction, and road construction in rural and mountainous areas.

- Mining industry: Strive to achieve an average annual growth rate of industrial output value of 8-9% during the period 2001-2010 (2001-2005: 9-11%; 2006-2010: 5-7%), ensuring the provision of most primary energy and raw materials for processing industries and building materials production for the economy.

c) Small-scale handicraft industry

The development of craft industries must be linked with agricultural, industrial development, and product consumption markets. Focus on developing craft industries with significant potential and comparative advantages. Select appropriate technology and equipment, combining traditional and advanced technologies. Invest in improving quality, developing new products that meet market demands and preferences, expanding export markets, and prioritizing the establishment of product brands. Harmonize various scales, organizational forms, and ownership types in the development of small-scale cottage industries.

The development of small-scale cottage industries in each locality must align with the industry development strategy and integrate with the overall economic and social development planning, as well as specific industrial development planning of each locality, aiming to address rural economic and social issues. During each period, each locality should set specific goals and solutions to concentrate on developing rural crafts in certain clusters and centers, from which they will spread to other areas.

3. Solutions

3.1. General Solutions

a) Management Solutions

Develop rural industry concurrently with the industry's strategic and planning development. Integrate rural industry development content into local industrial development planning.

Form and develop production organization models in the form of a "network" in rural areas, establish a "Rural Business Association" model based on the participation of various types of enterprises from different economic sectors at different levels to support collaboration and business cooperation.

Emphasize the role of centralized management for industry by Departments of Industry, while creating mechanisms to link Department of Industry management with local district and commune authorities. It is necessary to build a responsibility and benefit-sharing model reasonably for rural industry development. Implement flexible land consolidation and exchange policies to develop small industrial clusters in rural areas suitable for each region's characteristics.

Issue a framework regulation on industrial clusters and points as a basis for localities to issue regulations suitable for specific conditions, paying attention to environmental protection criteria and sustainable development.

Identify distinctive products suitable for each locality, build brands, organize production division and cooperation to quickly market these distinctive products.

Establish a specialized information system on agriculture and rural areas and a program to promote industry with large volumes of information, multiple communication methods, and new programs to create a new momentum for rural industry development.

Develop industrial service systems in rural areas, from business start-up services to technology transfer advisory activities, as well as logistics services for industry.

Establish rural industry development programs tied to localities and regions. Maintain close links with other national programs. The State supports these programs to attract and gain investors' trust, including private sector participation.

b) Financial Solutions

Build mechanisms to encourage the development of small credit organizations in rural areas, forming alternative financing organizations such as leasing, pawnshops, debt transfers. Encourage financial and credit professionals to return to their hometowns (through family connections); build and develop rural credit organizations, encourage foreign credit organizations to participate in this financial market. The principle is to keep local capital invested back into the locality, avoiding any investment from this source into urban areas.

Utilize state support funds effectively and avoid overlap. Provide indirect credit through leasing machinery and equipment.

Rural households can borrow funds from programs supporting crop, livestock, forest planting, and reforestation from preferential sources to produce raw materials. In cases of natural disasters, epidemics, etc., rural households can defer debts and borrow again at preferential interest rates to restore raw materials.

Continue implementing preferential financial policies for regions and industries serving the industrialization and modernization of agriculture and rural areas, such as exempting corporate income tax for newly established rural industrial enterprises in accordance with Tax Department regulations. Encourage investors to enter rural areas under the new Land Law to attract capital; form farms with scale to promote small industry development; gradually "industrialize" agricultural labor, change thinking and lifestyle, promoting industrialization and modernization more extensively.

c) Science and Technology Solutions

Institutionalize the model of scientific activity organization to create a legal framework for the establishment of these organizations in rural areas. Increase the proportion of operating capital for science and technology activities in research programs applied to production and business in rural areas. Encourage businesses to shift production and business from cities to rural areas through attractive mechanisms regarding land, taxes, and technology transfer organizations. The State plays a role in promoting the emergence and development of the science and technology market (through Science and Technology Departments, Industry Departments), building a local science and technology team through attraction and incentive policies.

d) Human Resources and Development Solutions

Diversify training methods and types for agriculture and rural areas. Focus on developing non-formal training types such as through associations, groups, media, tours, internships, etc. Continue to socialize vocational training, especially providing incentives for vocational training organizations in rural areas.

Attract human resources to rural areas through personnel transfer and dispatch policies from cities to rural areas, managing student and apprentice teams from localities.

Emphasize cultural and clan factors in rural areas in industrial development, encouraging clans to build brands, creating competitive motivation.

3.2. Specific solutions

a) For the mechanical industry

Focus on directing the acceleration of implementation of mechanical product projects serving agriculture under the Key Mechanical Product Program approved by the Prime Minister. Reorganize production towards specialization and cooperation. Develop a network of equipment supply agents, spare parts, materials, fuel, etc., and provide good after-sales services such as warranty, maintenance, repair, and other services. Create conditions for all economic components to participate in developing a wide-reaching supply network down to villages. Vigorously combat smuggling and commercial fraud to protect and expand the domestic market. Implement policies to assist farmers in equipping agricultural production machinery. Investment projects producing key mechanical products serving rural agriculture shall enjoy the highest investment incentives according to state policy at each period. Invest in building research and design agencies with sufficient strength and depth, capable of designing complex equipment and production lines to serve agriculture and rural areas.

b) For the chemical industry

- Ensure adequate and stable supply of fertilizers, plant protection chemicals, and other chemical products serving the preservation of agricultural and food products with high quality and safety for users. Establish appropriate mechanisms to support fertilizer production and circulation.

- Research the production of specialized fertilizers for rice, corn, vegetables, and fruit trees suitable for different types of soil such as acid sulfate soils, heavy clay soils, sandy loam soils, etc. Produce enzyme-based products for food processing and industrial wastewater treatment...

- Pay attention to fertilizers for cereal crops and vegetables in sandy and depleted soils, produce products serving coastal aquaculture, and treat wastewater from agricultural, forestry, and seafood processing industries...

- Research the production of specialized fertilizers for cash crops like tea, coffee, pepper, cashew, sugar cane, cotton, paper raw material trees, and special fertilizers for staple food crops in mountainous regions.

c) For the electricity industry

- Focus on investment in upgrading distribution systems to reduce power losses. Accelerate the process of transforming rural electricity management models so that people can access electricity prices close to the ceiling price set by the Prime Minister.

- Utilize all resources to accelerate electrification through the national grid or local power sources. Promote research on using alternative power sources such as small hydropower, wind power, solar power, geothermal power, diesel power. Seek international aid to upgrade the power grid system.

- Particularly emphasize education on safe and efficient electricity usage for the public, especially those in remote areas, to ensure safe and effective electricity use. Quickly complete legal documents on electricity to meet the increasing demands of agricultural production and rural development in terms of quantity and quality.

d) For the processing of agricultural, forestry, aquatic products, food, construction materials, and mineral extraction industries

- Develop appropriate policies and mechanisms for each specific industry, focusing on critical stages, and addressing difficulties faced by farmers such as collateral for loans, debt relief during crop failures, establishing production support funds, and sharing risks.

- Encourage the development of non-fired brick, tile, and roof tile production through specific policies. Encourage localities to research artificial sand production from crushed stone to replace natural sand used in construction, meeting local construction needs.

- Reorganize production facilities towards linking with raw material regions, enhancing business efficiency. Properly manage stone mining sites to limit excessive exploitation.

e) For the textile and footwear industry

- Develop non-quota markets and focus on producing goods not subject to quotas. Strengthen trade promotion units, establish and enhance the effectiveness of representative offices in potential markets, supporting enterprises in providing timely export market information.

- Build and promote brand products in domestic and international markets. Organize and penetrate retail networks, establish distribution, marketing, and after-sales systems in domestic and foreign markets. Establish centers and supermarkets selling products in major cities or open agency stores in towns and districts. Accelerate the relocation of garment enterprises from cities to rural and suburban areas.

- Enterprises should identify target markets, key products for each stage corresponding to each market to adjust investment structures and development pace accordingly. Regularly organize high-quality training sessions for managers.

f) For the small-scale handicraft industry

- Facilitate the transformation of production models for rural small-scale handicraft households. Encourage the establishment of professional associations to support each other in production and product sales. Encourage cooperative forms, division of labor, and specialization within the same industry among rural households.

- Facilitate the procurement of raw materials and product sales for facilities. Support small-scale handicraft facilities and craft villages in accessing domestic and international markets through advertising, exhibitions, and market information provision. Enhance the effectiveness of overseas trade offices in helping the small-scale handicraft industry find and expand product sales markets.

- Support facilities in applying technological advancements to improve product quality and competitiveness through socio-economic programs, technology transfer centers, and consulting services...

- Simplify loan procedures, extend loan periods to match production cycles. Implement policies to encourage foreign investment and urban investment in rural areas. Develop credit funds in rural areas to mobilize idle capital among the population. Establish a credit guarantee fund to facilitate loans for rural industrial producers to develop their production.

Article 2. Implementation

1. Ministry of Industry

a) Functional Departments

- Direct the development and implementation of plans to promote mechanical and chemical industries serving the industrialization and modernization of agriculture and rural areas; plans for the development of small-scale industries and craft villages in rural areas.

- Increase contact and understanding of actual conditions in counties and communes to collaborate on researching and proposing practical solutions for the development of rural industry.

- Study models to pilot the establishment of rural business associations or occupational associations based on linking sectors, regions, and businesses to attract resources for development and form brands to compete in markets, thereby encouraging localities to proactively establish such associations based on specific criteria suitable for the development of rural industry.

b) Local Industry Bureau

- Closely coordinate with provincial Industry Departments to effectively implement plans for developing rural industry, creating a broad movement in rural areas.

- Guide localities in using the promotion fund focused on developing rural industry, including allocating a reasonable portion for training and enhancing management staff at the local level as well as business owners, supporting technology transfer to encourage local industrial development.

- Coordinate with functional departments of the Ministry to develop pilot models of rural industry, then expand them nationwide, attracting participation from rural residents.

- Prioritize the allocation of the promotion fund to directly support industrial products in rural areas (concentrating on processing agricultural, forestry, aquatic, and marine products, and small-scale industries).

c) Vietnam Industry Newspaper and Industrial Journal

Focus on extensive propaganda about the theme of rural industry and policies for its development. Publish publications on industrialization and modernization generally and specifically on the development of rural industry. Research, build, and develop television programs and radio broadcasts on rural industry.

2. Provincial Industry Departments under the Central Government

- Collaborate closely with specialized agencies of the Ministry to effectively implement this plan.

- Closely monitor the development of rural industry in counties. Improve the industrial management system within the province, organize central management of industry in county areas, identify advantageous industries in counties to support their development.

3. Training Institutions under the Ministry

There should be a focus on both vocational training and training management personnel for rural industry to supplement high-quality human resources for agriculture and rural areas.

Article 3. This Decision shall take effect fifteen days from the date of publication in the Official Gazette.

Article 4. The Head of the Ministry's Office, the Inspector General of the Ministry, Department Heads, Bureau Chiefs under the Ministry, the Director of the Institute for Industrial Strategy and Policy Research, Directors of Provincial Industry Departments, General Managers of State Corporations, Heads of agencies and enterprises under the Ministry are responsible for implementing this decision.