08:19, 06/11/2023
Replanting coffee trees to "rejuvenate" the plantations is an extremely necessary and urgent solution for the sustainable development of the coffee industry.
The results are still limited.
Ten years ago, the People's Committee of Dak Lak province and the Vietnam Bank for Agriculture and Rural Development ( Agribank ) jointly organized a conference on solutions for replanting coffee trees in Dak Lak province, with the participation of representatives from central and local ministries and agencies. At this conference, 10 memoranda of understanding were signed, totaling over 163 billion VND in investment capital for replanting 955.7 hectares. These 10 replanting projects marked the beginning of a major investment program by Agribank in the coffee sector.
Following this conference, with the spirit of "Capital for replanting is ready," the leaders of Agribank Dak Lak province directed its subordinate units to approach farmers and businesses in need of replanting to guide them through the procedures and processes for borrowing capital, and assigned replanting loan targets to each unit. Agribank identified this as an opportunity to further expand credit investment in agricultural and rural development, enhance its brand and financial capacity, and contribute to the implementation of the Party and State's policies on building new rural areas.
At the local level, the People's Committee of Dak Lak province has approved the plan for coffee replanting in the province for the period 2013-2020; and issued the plan for coffee replanting for the period 2021-2025. In the districts, they are promoting the establishment of steering committees on lending for coffee replanting, organizing direct dialogues with coffee growers in communes with large replanting areas, so that people can see the long-term benefits of coffee replanting and develop projects to borrow capital from banks.
However, the actual implementation of the coffee replanting program has not yielded the expected results, with the replanted area falling short of the province's plan. According to the latest statistics, the entire province has only replanted over 6,893 hectares of coffee out of a total of 24,441.78 hectares as planned in the Coffee Replanting Plan for the period 2021-2025 (according to Decision No. 3262/QD-UBND dated December 30, 2020 of the Provincial People's Committee), which is only 28.2% of the plan.
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| Agribank officials directly inspected the successfully replanted coffee plantation that has reached the harvesting stage. |
Regarding loans for coffee replanting, at the peak of their outstanding loans, the two main banks, Agribank Dak Lak and Agribank Bac Dak Lak, only reached over 117.6 billion VND, with 221 customers (196 individual customers and 25 businesses). Among these, several models have been successful, achieving high and stable yields, notably: 720 Coffee Company Limited, 721 Coffee Company Limited, Viet Duc Coffee Company, and many households in Krong Pac, Cu M'gar, and Cu Kuin districts...
Finding ways to overcome difficulties in accessing credit for coffee replanting.
There are many reasons why coffee replanting has not met the planned targets. For example, some farmers have removed old coffee trees to switch to planting crops with higher economic efficiency such as avocados and durians instead of replanting coffee; in some localities, farmers have replanted on their own using patching or "leopard skin" methods, meaning they have removed a portion of their orchard for replanting, thus failing to meet the required procedures and techniques. Meanwhile, to borrow capital, farmers must have a certificate confirming their eligibility for replanting, strictly adhering to the replanting technical procedures issued by the Ministry of Agriculture and Rural Development; and meeting the conditions for loan collateral. Furthermore, even though interest rates for coffee replanting are preferential, lower than market rates by 1.5-2% per year, they are still high.
Furthermore, businesses needing to replant coffee face difficulties accessing bank credit due to low equity capital and insufficient eligibility to participate in the project. For state-owned enterprises, because the land is leased with annual payments, to secure loans, they can only mortgage assets attached to the land, usually coffee plantations. In addition, they must present invoices and documents proving the proper use of the funds. On the banks' side, despite many positive efforts to facilitate the flow of capital for coffee replanting loans, disbursement remains slow and difficult to access for customers.
Difficulties and obstacles in accessing credit in general and preferential loans in particular, including loans for coffee replanting, were discussed by credit institutions, businesses, and associations at the Bank-Business Connection Conference in the Central Highlands region, organized by the State Bank of Vietnam (SBV) on October 20, 2023, in Buon Ma Thuot City. Based on this, proposals and recommendations were made to address these difficulties and obstacles in credit relations, creating favorable conditions for businesses to access preferential bank loans at reasonable interest rates.
At this conference, Mr. Dao Minh Tu, Permanent Deputy Governor of the State Bank of Vietnam, stated that in the coming time, the State Bank of Vietnam will work with commercial banks to research and develop the most appropriate and effective mechanisms and policies to support the five provinces in the Central Highlands. Regarding the capital solution for coffee replanting, Mr. Dao Minh Tu affirmed: “We will direct the Vietnam Bank for Agriculture and Rural Development (Agribank) as the focal point, along with other commercial banks, to conduct thorough research, with the utmost urgency, to develop solutions that expand access to and directly support coffee replanting; in addition, to help make procurement, processing, and export as efficient as possible.”
It can be said that the results achieved at the conference provide new impetus for coffee replanting in the Central Highlands in general and Dak Lak province in particular. Hopefully, with the efforts of the banking sector, along with the active participation of coffee-growing households and businesses, and local authorities, the coffee replanting program in Dak Lak province will revive and achieve its set goals.
Phan Quoc Luong
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