Vietnam farmers stimulus package stalled over red tape

Aug 21, 2009, 7:16 GMT

   Hanoi - A government stimulus package intended to provide Vietnamese farmers with badly needed loans is failing due to red tape, farmers and officials said Friday.

   The stimulus package, announced in April, provides farmers with subsidized loans from commercial banks for buying fertilizer, pesticides and construction materials. Farmers are eligible for no-interest 12-month loans or 24-month loans at 4 per cent interest.

   But farmers and officials said very few farmers had been able to access the loans due to stringent requirements.

   'In order to get loans from banks, farmers have to show their 'red book',' or certificate of land ownership, said Nguyen Chi Hung, chairman of the Tien Giang Farmers' Association in the Mekong Delta. Many poor farmers in Vietnam lack such certificates.

   Hung said farmers also had to promise to buy only Vietnamese-made farming supplies with the loans. Many Vietnamese farmers use imported fertilizer and pesticides.

   In the central province of Gia Lai, the Bank for Agriculture and Rural Development has distributed just 173,000 dollars in loans under the subsidized scheme, the state-run Viet Nam News reported Friday. That represents only a small portion of the bank's total loans to farmers.

   In the southern province of Dong Nai, the paper reported, just six farmers have registered for the scheme so far.

   'The loan procedures are too complicated,' said Vu Trung Dung, a farmer in the Red River Delta province of Hai Duong. 'Farmers have to meet lots of requirements, like having assets to give banks as collateral. The government should make the scheme simpler.'