Decree No. 98/2018/NĐ-CP on policies to encourage cooperation and linkage in agricultural production and consumption

DECREE

On policies to encourage the development of cooperation and linkage in production and consumption of agricultural products

và consumption of agricultural products

Pursuant to the Law on Government Organization dated June 19, 2015;

At the proposal of the Minister of Agriculture and Rural Development;

The Government promulgates the Decree on policies to encourage the development of cooperation and linkage in production and consumption of agricultural products.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates policies to encourage the development of cooperation and linkage linking production with consumption of crop, livestock, aquaculture, forestry, and salt production products (hereinafter referred to collectively as agricultural products).

Article 2. Applicability

1. Farmers, farm owners, persons authorized for farmer households, cooperative groups (hereinafter referred to collectively as farmers).

2. Individuals, persons authorized for groups of individuals, family households registered as business households (hereinafter referred to collectively as individuals).

3. Cooperatives, cooperative unions (hereinafter referred to collectively as cooperatives).

4. Enterprises.

5. Other organizations and individuals related to the implementation of this Decree.

Article 3. Explanation of Terms

2. Self-generated and self-consumed electricity is electricity produced and consumed by an organization or individual to serve their own needs.

1. Cooperation and linkage linking production with consumption of agricultural products (hereinafter referred to collectively as linkage) is the agreement and voluntary joint investment, production, and consumption of agricultural products by the subjects specified in Clause 1, 2, 3, and 4 of Article 2 of this Decree (hereinafter referred to collectively as participating parties) to enhance the efficiency of agricultural production and product quality.

2. Value chain linkage of agricultural products as prescribed in this Decree is a form of linkage in agricultural production along the value chain from supply of inputs, services, production, preliminary processing, or processing linked with consumption of agricultural products (hereinafter referred to collectively as value chain linkage). Specific forms of linkage are prescribed in Article 4 of this Decree.

3. Concentrated agricultural production area: Is a concentrated production area of one or a group of similar agricultural products suitable for each type of production and local conditions, complying with State regulations on food safety, disease control, environmental protection, and linking production with consumption of agricultural products.

Chapter II

FORMS OF LINKAGE, LINKAGE CONTRACTS, AND LINKAGE PROJECTS

Article 4. Forms of linkage

1. Linkage from supply of inputs, services, organization of production, harvesting, preliminary processing, or processing linked with consumption of agricultural products.

2. Linkage from supply of inputs, services linked with consumption of agricultural products.

3. Linkage from organization of production, harvesting linked with consumption of agricultural products.

4. Linkage from supply of inputs, services, organization of production, harvesting linked with consumption of agricultural products.

5. Linkage from organization of production, harvesting, preliminary processing, or processing linked with consumption of agricultural products.

6. Linkage from supply of inputs, services, preliminary processing, or processing linked with consumption of agricultural products.

7. Linkage from preliminary processing, or processing linked with consumption of agricultural products.

Article 5. Linkage Contract

The linkage contract linking production with consumption of agricultural products (hereinafter referred to collectively as the linkage contract) is a contract signed between the participating parties on a voluntary basis to implement the forms of linkage prescribed in Article 4 of this Decree.

Article 6. Joint Venture Project

1. A joint venture project is a project established by a business enterprise or cooperative and the parties involved in the joint venture contract through mutual agreement, construction, and implementation of joint investment according to the forms prescribed in Article 4 of this Decree.

2. The parties participating in the joint venture shall establish a joint venture project as the basis for enjoying preferential policies and support as stipulated in Article 8 and point a, Clause 1, Article 9 of this Decree. In cases where support under the aforementioned policies is not proposed, it is only necessary to prepare a plan requesting joint venture support.

3. Lead entity of the joint venture: If a business enterprise or cooperative directly signs a joint venture contract with an individual or farmer, the business enterprise or cooperative will be the lead entity of the joint venture. For cases where businesses or cooperatives sign joint venture contracts with each other, the parties will agree to elect a lead entity of the joint venture.

4. The lead entity of the joint venture shall prepare the application dossier for joint venture support. In cases where a joint venture project must be established, the lead entity of the joint venture is the investor of the joint venture project.

5. In addition to the contents agreed upon between the parties participating in the joint venture, the joint venture project must include at least one of the following contents:

a) Designing and improving paddy fields, investing in construction, expanding the scale of concentrated agricultural production areas;

b) Investing in construction and development of infrastructure serving production, harvesting, processing, preservation, and consumption of agricultural products;

c) Contributing capital, assets, value of land use rights, technology, or production processes.

6. The procedures for establishing, reviewing, and approving the joint venture project shall be carried out in accordance with the provisions of Article 12 of this Decree.

Chapter III

PREFERENTIAL POLICIES AND SUPPORT

Article 7. Support for Consulting Fees for Establishing Joint Ventures

1. The lead entity of the joint venture shall be supported by the state budget for 100% of consulting fees for establishing joint ventures, with a maximum of no more than three billion VND, including consulting and research for drafting joint venture contracts, joint venture projects, plans, and business operation programs, market development.

2. The sources of funding, levels of support, and mechanisms for support as provided in Clause 1 of this Article shall be implemented according to plans, programs, and projects under the National Target Program on New Rural Development and from other legitimate programs and projects.

Article 8. Support for Infrastructure Serving Joint Ventures

1. The joint venture project shall be supported by the state budget for 30% of the investment capital for machinery and equipment; constructing infrastructure facilities serving joint ventures, including factories, docks, warehouses for production, preliminary processing, preservation, processing, and consumption of agricultural products. The total level of support shall not exceed ten billion VND.

2. The sources of funding and levels of support as provided in Clause 1 of this Article shall be implemented according to plans, programs, and projects under the National Target Program on New Rural Development, the National Target Program on Agricultural Economic Restructuring and Disaster Mitigation, and Stable Livelihoods, and from other legitimate programs and projects.

Article 9. Support for Agricultural Promotion, Training, and Product Seeds, Materials, Packaging, and Labels

1. In addition to the support for investment capital for constructing infrastructure facilities serving joint ventures as provided in Clause 2 of Article 8, the parties participating in the joint venture shall be supported by the state budget to implement the following contents:

a) Building agricultural promotion models;

b) Vocational training, technical training, enhancing management skills, production techniques, contract management capabilities, chain management, and market development;

c) Supporting seeds, materials, packaging, and product labels for up to three crop cycles or three production cycles through centralized services of cooperatives;

d) The budget supports up to 40% of the costs for transferring and applying new scientific and technological methods, implementing production techniques, and managing quality throughout the chain.

2. The sources of funding, levels of support, and mechanisms for support as provided in points a and b of Clause 1 of this Article shall be implemented according to regulations of programs and projects on agricultural promotion; vocational training programs for rural agricultural workers; human resource training and development policies for cooperatives, and from other legitimate programs and projects.

3. The sources of funding, levels of support, and mechanisms for support as provided in points c and d of Clause 1 of this Article shall be implemented according to regulations of the National Target Program on New Rural Development and from other legitimate programs and projects.

Article 10. Provisions on the principle of preferential treatment and support

1. For each type of association defined in Article 4 of this Decree, the parties participating in the association in which content shall enjoy the support policy in that content. The competent state agency shall decide to provide support based on the contents of the association according to the contract and the associated project in accordance with the provisions of this Decree.

2. Each party participating in the association shall enjoy the preferential and support policies that such party implements according to the agreement in the contract and the associated project.

3. In cases where there are multiple different preferential and support policies at the same time (including from other programs and projects), the beneficiary may choose to apply the most beneficial preferential and support policy.

4. Besides the central budget support funds, localities shall proactively balance and supplement their local budgets, integrate programs and projects to implement policies encouraging cooperation and association in agricultural production and consumption in accordance with the provisions of this Decree.

5. The State encourages other lawful sources of support funds to promote the linkage between production and consumption of agricultural products.

Article 11. Conditions for receiving support

Parties participating in the association must meet the following conditions simultaneously:

1. Complying with the socio-economic development plan of the locality.

2. Certificate or commitment ensuring the legal regulations on product quality standards, food safety, disease safety, and environmental protection.

3. Stable linkage:

a) For agricultural products with a breeding, cultivation, or exploitation cycle of one year or more, the minimum linkage period is five years;

b) For agricultural products with a breeding, cultivation, or exploitation cycle of less than one year, the minimum linkage period is three years.

4. The associated project or the proposed support plan must be approved by the competent authority.

Article 12. Supporting association application dossier and procedures

1. Application dossier for supporting association

a) Application form of the main organizer of the association (according to Model No. 01 attached to this Decree);

b) Association project (according to Model No. 02 attached to this Decree) or the proposed support plan for the association (according to Model No. 03 attached to this Decree);

c) Agreement form appointing the main organizer of the association (according to Model No. 04 attached to this Decree) in cases where enterprises or cooperatives sign association contracts with each other;

d) Copies of certificates or commitments regarding product quality standards, food safety, disease safety, and environmental protection; or commitments ensuring compliance with legal regulations on product quality standards, food safety, disease safety, and environmental protection (according to Model No. 05 attached to this Decree);

đ) Copies of the association contract.

2. Procedures

a) In cases where the People's Committee of the province approves support for the association project: The main organizer of the association submits one set of the dossier to the Department of Agriculture and Rural Development. After receiving the complete dossier as stipulated in Clause 1 of this Article from the main organizer of the association, the Department of Agriculture and Rural Development establishes a Dossier Review Board. The Board consists of the leader of the Department of Agriculture and Rural Development as Chairman, members being representatives of the Department of Planning and Investment, the Department of Finance, relevant departments, and leaders of the People's Committees of related districts. Within fifteen working days after receiving the dossier, the Board conducts a review. If the dossier meets the requirements, the Department of Agriculture and Rural Development prepares a report to submit to the People's Committee of the province for approval. If the dossier does not meet the requirements, within ten working days after the review, the Department of Agriculture and Rural Development must notify the main organizer of the association and clearly state the reasons. Within ten working days after receiving the report of the Department of Agriculture and Rural Development, the People's Committee of the province issues a decision approving support for the association project;

b) In cases where the People's Committee of the district approves support for the association, it assigns the Agricultural Office (or Economic Office) to implement according to the procedures stipulated in point a of Clause 2 of this Article.

Chapter IV

RIGHTS AND OBLIGATIONS OF PARTIES PARTICIPATING IN THE ASSOCIATION

Article 13. Rights of parties participating in the linkage

1. Linkage in agricultural industries, professions, and production fields that are not prohibited by law.

2. Enjoying policies to encourage linkage between production and consumption of agricultural products and other supportive and preferential policies of the State as prescribed.

3. Using assets invested on land and assets formed from borrowed capital to mortgage for borrowing capital at credit organizations according to the provisions of law.

4. Receiving information about State support policies for linkage, prices, markets, quality standards, science and technology, and other public services serving linkage.

5. Choosing appropriate methods to resolve disputes arising during the implementation of linkage contracts and projects according to the provisions of law.

6. Ensuring protection for assets and infrastructure investment items participating in linkage (including assets supported by the State) according to the provisions of law.

7. Other rights as prescribed by law.

Article 14. Obligations of parties participating in the linkage

1. Providing complete and accurate information related to linkage contracts and projects to other participating parties when requested.

2. Fulfilling all contents of commitments in linkage contracts and projects accurately and completely.

3. Adhering to State regulations on production, consumption of products, and environmental protection, human health, crops, and livestock during the implementation of linkage contracts.

4. Ensuring the legitimate rights and responsibilities of participating parties according to current laws.

5. Participating parties in linkage have the obligation to negotiate and reach consensus to resolve difficulties and unforeseeable risks during the implementation of linkage contracts.

6. Other obligations as prescribed by linkage contracts and laws.

Article 15. Handling disputes and violations when implementing linkage contracts and projects

1. When participating parties in linkage fail to fulfill their commitments and responsibilities fully and accurately (except for cases of force majeure such as natural disasters and epidemics) when implementing linkage supported by state budget funds, they shall:

a) Not be entitled to enjoy state incentives and support, be subject to legal penalties currently in effect, and be required to compensate the party suffering losses;

b) Not be eligible to benefit from state encouragement policies on linkage for a period of five years from the date of determination of violation.

2. When participating parties in linkage violate provisions in linkage contracts, they shall be handled through the following forms:

a) Compelling them to comply with the linkage contract;

b) Imposing penalties for breach of the linkage contract;

c) Temporarily suspending the implementation of the linkage contract;

d) Terminating the implementation of the linkage contract;

đ) Canceling the linkage contract;

e) Compelling them to compensate for damages to related parties;

g) Other measures agreed upon by the participating parties that do not contravene current laws.

3. Forms of handling linkage contract disputes: The State encourages participating parties to resolve disputes through negotiation and mediation. In case of disagreement, disputes shall be resolved through commercial arbitration or court proceedings.

Chapter V

IMPLEMENTATION

Article 16. Responsibilities of Ministries and Agencies Equivalent to Ministries

1. The Ministry of Agriculture and Rural Development:

a) Taking the lead in implementing tasks assigned under this Decree;

b) Developing pilot models of linkage tied to restructuring the agricultural sector and building new rural areas;

c) The Ministry of Agriculture and Rural Development takes the lead and coordinates with the Ministry of Industry and Trade and relevant ministries and agencies to implement the Project on developing the system of Vietnamese agricultural product supply centers for the 2018-2020 period;

d) Coordinating with the Ministry of Natural Resources and Environment to guide and organize the implementation of tasks related to rural environmental protection in cooperative activities, linkages, and agricultural product consumption;

đ) Monitoring, compiling, inspecting, and reporting on the implementation of this Decree;

2. The Ministry of Planning and Investment: Leading and coordinating with the Ministry of Agriculture and Rural Development to aggregate, balance, and integrate investment capital from the budget to support linkage as prescribed.

3. The Ministry of Finance: Leading and coordinating with the Ministry of Agriculture and Rural Development to aggregate, balance, and integrate public expenditure capital from the budget to support linkage as prescribed.

4. The Ministry of Industry and Trade: Leading and coordinating with the Ministry of Agriculture and Rural Development and relevant ministries and agencies to implement the Project on developing rural trade for the 2010-2015 period and towards 2020.

Article 17. Responsibilities of Provincial People's Committees and Municipal People's Committees under the Central Government

1. Identifying and approving important commodity categories and products that need to be encouraged and prioritized for support in implementing linkage between production and consumption of products and publicly announcing them within the province.

2. Submitting to the Provincial People's Council for approval of policies to support production and consumption linkage within the province.

3. Approving linkage support within the province according to its authority. Prescribing the division of authority for the District People's Committee to approve linkage support within the province based on the scale of investment capital and the area where linkage is implemented.

4. Directing specialized agencies, District People's Committees, and Commune People's Committees to develop plans, provide guidance, organize implementation, and inspect the implementation situation within the province. Allocating a budget to support linkage according to this Decree.

5. Directing relevant units and organizations to support and implement training, capacity building, and provision of information on prices and market forecasts for agricultural products to participating parties in linkage.

6. Reporting annually to the Ministry of Agriculture and Rural Development for compilation and reporting.

Article 18. Responsibilities of political and social organizations and industry associations

1. Providing information, propaganda, consulting, mobilizing, and supporting members to participate and comply with contractual linkages; building, developing, and protecting the reputation and common value of agricultural products; developing markets, establishing and promoting product brands.

2. Protecting the rights and interests of members during the signing and implementation of contractual linkages; providing solutions and support services for members to standardize production technical procedures, product quality; joint management plans for resources and production environments; responding to market crises, climate change, and resource and environmental protection.

Article 19. Effective Date

1. This Decree shall take effect from August 20, 2018.

2. Abolish Decision No. 62/2013/QD-TTg dated October 25, 2013 of the Government on policies encouraging the development of cooperation and linkage in production tied to consumption of agricultural products, and the construction of large fields from the date this Decree takes effect.

3. Parties participating in linkages that are implementing according to Decision No. 62/2013/QD-TTg before this Decree takes effect shall continue to enjoy approved policies or benefit from policies stipulated in this Decree until the end of their signed linkage contracts if they meet the conditions for support as prescribed in this Decree. In cases where applications have been submitted to competent authorities to enjoy policies before this Decree takes effect, they shall continue to complete and supplement documents in accordance with this Decree.

4. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of People's Councils, Chairpersons of People's Committees of provinces and centrally-administered cities, and related agencies are responsible for implementing this Decree./.