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THE PRIME MINISTER OF GOVERNMENT
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
80/2002/QD-TTg
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Hanoi, June 24, 2002
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DECISION
ON POLICIES TO ENCOURAGE THE CONTRACTUAL SALE
OF COMMODITY FARM PRODUCE
THE PRIME MINISTER
Pursuant to the December 25,
2001 Law on Organization of the Government;
At the proposal of the Minister of Agriculture and Rural Development,
DECIDES:
Article 1.- The State encourages
enterprises of all economic sectors to sign contracts on sales of commodity
farm produce (including agricultural, forestrial and aquatic products) and salt
with producers (cooperatives, peasant households, farms, peasant households
representatives) with a view to linking production with processing and
consumption of commodity farm produce to develop production in a stable and
sustainable manner.
The contracts, after being
signed, shall serve as legal basis for binding the parties in their
responsibilities and obligations, protecting the rights and legitimate
interests of the raw materials producers and the production, business,
processing and exporting enterprises under the contractual provisions.
Article 2.- The contracts on
sales of commodity farm produce must be signed with producers right at the
beginning of crop seasons, the beginning of the year or the beginning of a
production cycle. For the immediate future, to sign contracts on sales of
products being major export items: rice, aquatic products, tea, coffee, pepper,
rubber, cashew nuts, fruits, mulberry, meat, and major industrially processed
products for domestic consumption: cotton, sugarcane, tobacco, raw
material-forest trees for the paper industry, timber processing industry, milk
and salt production...
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- Advance of capital, supplies,
technical and technological assistance, for purchase of commodity farm produce;
- Sale of supplies and purchase
of commodity farm produce;
- Direct consumption of
commodity farm produce;
- Production cooperation: The
peasant households may use the land use right value for capital contribution,
joint venture, cooperation with enterprises or sublease land to enterprises,
then the peasants may carry on production on the land they have used for
capital contribution, joint venture or cooperation or have leased, and send
farm produce to enterprises, thus creating the sustainable bond between the
peasants and enterprises.
The contracts on sales of
commodity farm produce must ensure the contents and forms as prescribed by law.
Article 3.- A number of key
policies to encourage enterprises to sign farm produce-selling contracts with
producers.
1. Regarding land
The People’s Committees of the provinces and centrally-run cities
shall create favorable conditions for peasants to fully and legally exercise
their rights on the use of land, the use of land use right value for capital
contribution, joint venture or cooperation with enterprises engaged in the
processing, export and import of farm produce; direct the elaboration and
finalization of planning of regions for concentrated production of commodity
farm produce, creating conditions for producers and enterprises to organize
production, sign contracts on the sales of farm produce; direct the realization
of patching land and fields together in places where it is so necessary.
The farm produce- processing,
-selling and/or -exporting enterprises, which have demands for land to build
processing plants or warehouses, goods preserving yards and transportation
shall be given priority in land lease. The People’s
Committees of the provinces and centrally-run cities shall specify the
favorable conditions in terms of procedures and prices in order to support
enterprises in receiving land for investment.
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The concentrated raw
materials-producing zones are linked to commodity farm produce- processing and
consuming establishments through contracts on sales of commodity farm produce
and shall be partly supported by the State budget in investment in the
construction of infrastructure (communications roads, irrigation works,
electricity supply), system of wholesale markets, preservation warehouses,
market information networks, commodity farm produce quality-inspecting establishments.
The financial mechanism and budget support shall comply with the provisions in
Article 3 of Decision No. 132/2001/QD-TTg of September 7, 2001 of the Prime
Minister.
3. Regarding credit
- For commercial credit, the
commercial banks shall meet the capital-borrowing demands of producers and
enterprises, that have signed contracts, at negotiable interest rates under
favorable conditions and procedures. The producers and enterprises may mortgage
the assets formulated from loan capital to borrow capital from banks, may
borrow capital with trust guarantee and borrow capital for efficient production
and business projects.
- Producers and enterprises that
sign farm produce-sale contracts and have projects on exports production and
processing shall be entitled to benefit from the forms of State investment from
the Development Assistance Fund as provided for in the Government’s Decree No. 43/1999/ND-CP of June 29, 1999 on the
State’s investment credit and the
Prime Minister’s Decision No.
02/2001/QD-TTg of January 2, 2001.
- Enterprises which have signed
contracts on the sale of farm produce for export and have projects on exports
production and trading shall be entitled to borrow capital from the Export
Support Fund under Decision No. 133/2001/QD-TTg of September 10, 2001 of the
Prime Minister promulgating the Regulation on export-support credit.
Enterprises marketing farm produce according to crop seasons may borrow capital
from the Export Support Fund to buy commodity farm produce under contracts and
may be eligible for the application of the form of trust guarantee or mortgage
with assets formed from borrowed capital to borrow capital.
- For deep-lying, far-flung,
difficulty-hit, border and/or island areas, in addition to the current credit
policies on lending to producers and enterprises such as providing loans to
poor households, reducing lending interest rates upon repayment, the following
policies shall also apply:
+ For investment projects on
processing agricultural products, selling commodity farm produce, borrowing
capital from the Development Assistance Fund can be made at the annual interest
rate of 3%. Where the projects are implemented by State enterprises, when the
projects are put into operation, the State budget shall fully allocate 30% of
the working capital;
+ The provincial/municipal
People’s Committees shall decide on the use of local budgets to support the
interests on bank loans for each project on production, processing and/or sale
of commodity farm produce, suitable to the practical conditions of each
locality.
4. Regarding transfer of
technical advances and technologies
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The concentrated commodity
production regions under farm produce- sale contracts shall be given priority
in deployment of and support for the work of agricultural, forestrial and
fishery promotion.
5. Regarding markets and trade
promotion
Apart from the current policies,
for the concentrated commodity production regions, the exporting enterprises of
all economic sectors, which sign commodity farm produce-sale contracts with
peasants right at the beginning of the crops, shall be given priority to
participate in performing the State’s
trade contracts and trade promotion programs organized by the Ministry of
Trade, the concerned ministries and branches, the Commodity Lines Associations
and localities.
Article 4.- The signing and
performance of commodity farm produce-sale contracts between producers and
enterprises must strictly comply with the law provisions on contracts.
The commodity farm produce-sale
contracts shall be certified by commune People’s
Committees or authenticated by the district notary offices.
Enterprises and producers shall
have the responsibility to strictly observe the contractual commitments; any
party that fails to comply with the signed contents, thus causing damage shall
have to pay compensation to the party suffering from the damage.
The contractual parties shall
reach mutual agreement on handling of risks brought about by natural disasters,
sudden changes in market prices and other force majeure reasons on the principle of risk sharing and shall
be considered by the State for partial support for the damage as provided for
by law.
Enterprises must not compete to
buy commodity farm produce of peasants who have got investment from other
enterprises for production development; must not sign commodity farm
produce-sale contracts with the producers who have already signed such
contracts with other enterprises. The producers can sell their contractual
commodity farm produce to other enterprises only when the enterprises which
have made investment in the production thereof or have signed commodity farm
produce-sale contracts refuse to buy or do not buy out their commodity farm
produce.
Where there appear contractual
disputes, the commune People’s
Committees shall have to coordinate with the Peasants Association of the same
level and the Commodity Lines Association in organizing and creating conditions
for the two parties to settle their disputes through negotiations,
reconciliation. Where the negotiation and reconciliation fail, the involved
parties will bring their disputes to courts for settlement according to law.
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1. Paying compensation for all
material damage caused by their acts of violation according to the law
provisions on contracts;
2. The competent State bodies
terminate or suspend their right to trade in the farm produce items which the
enterprises have violated, and announce on mass media the contractual breaches
by the enterprises.
Article 6.- In the course of
contractual performance, if producers who have received the capital and
supplies advanced by the contractual enterprises, but deliberately refuse to
sell farm produce to the latter or sell their commodity farm produce to other
enterprises which have not signed contracts for investment in production; sell
with inadequate volume and/or not on schedule, fail to ensure the goods
criteria and quality prescribed in the contracts; fail to repay in time or
commit other acts of violation shall, depending on the nature and seriousness
of their acts, be subject to the following handling measures:
1. Repaying to the enterprises
the debt amounts on supplies, capital (including interests on bank loan capital
for the duration of advance), which they have received as advance.
2. Paying compensation for the
damage caused to the enterprises according to the law provisions on contracts.
Article 7.- The
provincial/municipal People’s
Committees shall have to direct the application of measures to accelerate the
process of reorganization of production and sales of farm produce through
contracts in their respective localities, paying attention to well performing a
number of following tasks:
- Directing local branches to
propagate widely among people the contractual production mode, to enhance law
education, raise the sense of law observance for enterprises and peasants so
that people sympathize with and respond to the new mode of business in the
market mechanism;
- Selecting and deciding
concretely (in cases of necessity, they should coordinate with concerned
ministries, branches, State corporations) the enterprises to sign commodity
farm produce-sale contracts; and at the same time step by step expanding the
mode of signing contracts on sales of commodity farm produce so that at least
30% by 2005 and over 50% by 2010 of the commodity farm produce output of a
number of big commodity production branches are marketed through contracts.
- Guiding enterprises and
producers to sign contracts on production and sales of commodity farm produce
in their respective localities; directing the Services, Departments and
branches in the provinces to urge and inspect the signing and performance of
contracts;
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- Adopting measures to provide
necessary assistance and create conditions for producers and enterprises in
realizing the mode of contractual sale of commodity farm produce, detecting in
time problems faced by enterprises and producers in the course of implementing
this mode; handling in time problems which fall under the responsibility and
competence of the localities and taking initiative in working with the
concerned ministries and branches to handle matters falling beyond the
jurisdiction of localities;
- Directing the building up of a
number of models of contractual production mode so as to draw experiences for
general direction and finalization of policies, aiming to accelerate the
process of closer and closer and more efficient cooperation between the
producers, processors and consumers of commodity farm produce.
Article 8.- Responsibilities of
the concerned ministries, branches and organizations:
1. The Ministry of Agriculture
and Rural Development and the Ministry of Aquatic Resources shall promulgate
their respective branches model contracts on sales of commodity farm produce
for application by enterprises and producers in the course of implementation;
monitor and sum up the application of the mode of contractual sale of commodity
farm produce for report to the Prime Minister.
2. The Ministry of Trade shall
have to guide the support for enterprises in trade promotion and search for
farm produce outlets.
3. The Finance Ministry shall
examine tax policies to suit the contractual parties; work out policy mechanism
for setting up commodity lines insurance funds and submit it to the Government
for decision; guide the relevant financial policies.
4. The State Bank of Vietnam and
the Development Assistance Fund shall guide the direction of loan provisions to
enterprises and producers as prescribed in this Decision.
5. The Government’s agency exercising the State management over
prices shall guide the principles for determining the floor prices of commodity
farm produce purchased by enterprises from producers so as to ensure benefits
for the producers and efficient business for enterprises.
6. Vietnam Peasants Association
and the Commodity Lines Association shall promote their roles and positions to
support enterprises and producers in signing contracts for sales of farm
produce.
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Article 10.- The ministers, the
heads of ministerial-level agencies, the heads of the agencies attached to the
Government and the presidents of the provincial/municipal People’s Committees shall have to implement this Decision.
PRIME MINISTER
Phan Van Khai