LIST OF TABLES Table 3 1 Number and total FDI capital in agricultural sector 37 Table 3 2 Structure of FDI invested in Vietnam in economic sectors (2020) 39 Table 3 3 Structure of FDI in agriculture b.
LIST OF TABLE Table 3.1 Number and total FDI capital in agricultural sector .37 Table 3.2 Structure of FDI invested in Vietnam in economic sectors (2020) 39 Table 3.3 Structure of FDI in agriculture by localities receiving investment 45 LIST OF FIGURE Figure 3.1 Structure of FDI in agricultural sector by sub-sectors 40 Figure 3.2 Structure of FDI in agricultural sector by investment partners .42 Figure 3.3 Structure of FDI in agricultural sector by form of investment 43 TABLE OF CONTENTS LIST OF TABLES i LIST OF FIGURES ii Rationale .1 Research subjects Research objectives .2 Research scope Research method Research structure .3 CHAPTER 1: LITERATURE REVIEW 1.1 Theoretical studies 1.1.1 Theory of ownership advantage 1.1.2 Theory of Internalization 1.1.3 The theory of location advantage 1.1.4 Eclectic theory (OLI) .7 1.2 Previous related research CHAPTER 2: THEORETICAL BASIS AND INTERNATIONAL EXPERIENCE IN ATTRACTING FDI IN AGRICULTURAL SECTOR 10 2.1 The concept and characteristics of FDI: 10 2.1.1 The concept of FDI: 10 2.1.2 Characteristics of FDI: 12 2.1.3 Classification of FDI: 13 2.2 Characteristics of investment in the agricultural sector 14 2.3 The role of foreign direct investment in agricultural sector .16 2.3.1 Direct role: 16 2.3.2 Indirect Role: 17 2.4 Factors affecting the attraction of FDI in agricultural sector: 18 2.4.1 Natural condition: 20 2.4.2 Population and labor resources .20 2.4.3 The infrastructure 20 2.4.4 Legal System 21 2.4.5 Agricultural market .21 2.5 Evaluation criteria for attracting FDI into agricultural sector 22 2.6 Experiences of some countries in attracting FDI into agricultural sector 23 2.6.1 Thailand's experience 23 2.6.2 Indonesia’s Experience 25 2.6.3 Malaysia’s Experience 26 CHAPTER 3: THE STATUS OF ATTRACTING FDI IN AGRICULTURAL SECTOR IN VIETNAM .28 3.1 Factors affecting FDI attraction to agricultural sector in Vietnam 28 3.1.1 Natural Condition 28 3.1.2 Population and labor force: 30 3.1.3 The infrastructure 31 3.1.4 Agricultural Market 34 3.1.5 Legal System 35 3.2 Situation of attracting FDI into agricultural sector in Vietnam in the period 2010-2020: 36 3.2.1 Size and proportion of FDI in agricultural sector: 36 3.2.2 Structure of FDI in agricultural sector by sub-sectors 40 3.2.3 Structure of FDI in agricultural sector by investment partners .41 3.2.4 Structure of FDI in agricultural sector by form of investment: .43 3.2.5 Structure of FDI in agriculture by localities receiving investment 44 3.3 Assessment of limitations in attracting FDI into agricultural sector in Vietnam: 45 3.3.1 The proportion of FDI in the agricultural sector is still low and unstable: 45 3.3.2 Operational efficiency of FDI projects in agricultural sector is low .46 3.3.3 Lack of diversity in investment partners: 47 3.4 The causes of limitations in attracting FDI into agricultural sector in Vietnam: 47 3.4.2 The infrastructure system for agricultural sector has not met the requirements 48 3.4.3 Agricultural land is not concentrated 49 3.4.4 The agricultural production is small, scattered, unconnected, and unprofessional .50 3.4.5 There is no clear and appropriate strategy and orientation to attract FDI into agricultural sector 51 3.4.6 The legal system for foreign investors in agricultural sector is not clear and transparent .51 CHAPTER 4: SOLUTIONS TO INCREASE FDI ATTRACTION IN AGRICULTURAL SECTOR IN VIETNAM 53 4.1 Viewpoints and orientations in attracting FDI into agricultural sector: 53 4.2 Opportunities and challenges in attracting FDI into agricultural sector in Vietnam 54 4.2.1.Opportunities: .54 4.2.2 Challenges: 55 4.2 Solutions to attract FDI into agricultural sector in Vietnam .56 4.2.1 Develop a strategy to attract and use FDI .56 4.2.2 Complete the legal system in favor of attracting FDI into agricultural sector:56 4.2.3 Upgrade infrastructure for agricultural development 57 4.2.4 Improve the quality of labor force 59 4.2.5 Promote the development of hi-tech agricultural sector: 60 CONCLUSION .62 INTRODUCTION Rationale Foreign Direct Investment (FDI) has become a prominent trend of globalization and regionalization It is one of the important tools in accelerating economic development of many countries in the world FDI has a positive role for both home country and host country, especially for host country that are in the process of industrialization FDI not only adds capital and expands foreign markets to accelerate economic growth, but also contributes to improving the level of science and technology in the country, creating jobs and incomes for workers Since Vietnam carried out the renovation of its economic development model, shifting to a market economy, the agricultural sector still plays a particularly important role With the advantages as well as available natural conditions, Vietnam’s agricultural production industry has comparative advantages In recent years, Vietnam has paid attention to developing modern agricultural sectors, trying to catch up and even develop on a par with countries with modern and advanced agricultural sectors in the world Not only accounting for a high proportion (about 13.5%, in 2020) in GDP, Vietnam's agricultural sector is also the main source of income for the population living in rural areas Agricultural production in Vietnam not only meets the needs of food for domestic consumption, but also provides a large source of goods for export Moreover, in difficult times, when industrial production and services seriously decline, Vietnam's agricultural sector is also the backbone of the economy We can see that, despite facing a lot of difficulties caused by the Covid-19 epidemic: manufacturing operations as well as supply chains were severely disrupted, thousands of factories closed or cut production, the tourism industry "frozen"… but agricultural production was still maintained Thanks to that, it has contributed to ensuring food security, increasing export turnover, and ensuring the lives of tens of millions of people Citing specific numbers from General Statistics Office of Vietnam: rice production reached about 43.52 million tons, an increase of 1.7% compared to 2020; meat production of all kinds reached about 5.67 million tons, up 5.3%; fishery output reached about 8.6 million tons, up 2.4% Agricultural, forestry and fishery products increased in both quantity and export value In the first nine months of 2021, the export turnover of agricultural, forestry and fishery products is estimated at 35.5 billion USD, up 17.7% over the same period in 2020 Despite such an important role, over the years, investment capital in general and FDI in particular in the the agricultural sector has been modest, not commensurate with the he potential of this field in the economy, has not yet created rapid development in the production of goods with the desired high quality Specifically, in 2020, FDI in agricultural sector accounts for only 0.97% of total FDI in Vietnam In order to achieve the goal of further increasing the amount of FDI invested in Vietnam, it is necessary to specifically analyze and evaluate the current situation of attracting FDI in the agricultural sector, and at the same time find directions and solutions to improve competitiveness and attract FDI in this field Therefore, the author decided to implement the topic "Attracting FDI into Vietnam's agricultural sector: Reality and solutions” Research subjects With the topic “Attracting FDI into Vietnam's agricultural sector: Reality and solutions”, the author identifies the specific research subject is the status of attracting FDI in the agricultural sector of Vietnam Research objectives The project “Attracting FDI into Vietnam's agricultural sector: Reality and solutions” is carried out with the following objective: + Firstly, analyze and assess the current situation of attracting FDI into agricultural sector in the period 2010-2020 + Secondly, propose the main solutions to increase FDI attraction into agricultural sector in Vietnam in the near future Research scope + Research space: Research on activities to attract FDI into agricultural sector in Vietnam's territory + Research period: Research on the status of attracting FDI into agricultural sector in Vietnam in the period 2010 - 2020 Research method With the purpose as well as the object and scope of the study as above, the thesis uses the method of analyzing and synthesizing secondary data collected from documents, reports, previous studies, statistical data of the Ministry of Agricultural sector and Rural Development, General Statistics Office, etc Using historical statistics on FDI, FDI policy and related issues as a basis to analyze and assess In addition, the thesis uses comparative statistical methods and meta-analysis to clarify the points, and at the same time summarizes the experiences of countries around the world to solve related problems Research structure This article is divided into chapters: Chapter 1: Research introduction This chapter presents general information of the topic such as: rationale, research subjects, research objectives, research scopes and research methods Chapter 2: Literature review This chapter presents and evaluates previous studies related to the research topic Chapter 3: Theoretical basis and International experience in attracting FDI in agricultural sector Accordingly, chapter focuses on clarifying some concepts and issues related to FDI in general and FDI in agricultural sector in particular, including the concept, characteristics, classification of FDI, the role of FDI in agricultural sector, factors affecting the attraction of FDI in agricultural sector and criteria for assessing the attraction of FDI in agricultural sector and experiences of some countries in attracting FDI into agricultural sector Chapter 4: The reality of attracting FDI into agricultural sector in Vietnam Chapter focus on studying the current situation of factors affecting FDI attraction to agricultural sector in Vietnam At the same time, chapter also goes into depth analysis of the specific situation of attracting FDI into agricultural sector in Vietnam in the period 2010-2020 in terms of size, structure as well as results achieved, remaining limitations and reasons for those limitations Chapter 6: Solutions to increase FDI attraction in Vietnam's agricultural sector CHAPTER 1:LITERATURE REVIEW 1.1 Theoretical studies 1.1.1 Theory of ownership advantage The founder of the theory of ownership advantages is Canadian Marxist economist, Stephen Herbert Hymer (1934-1974) This theory [ CITATION Hym76 \l 1033 ] was first mentioned in his PhD thesis entitled "The International Operations of National Firms: A Study of Direct Foreign Investment" presented in 1960, analyze the motivations promoting US companies' investments in other countries through ownership advantages Through observing the growth and performance of US companies abroad, he discovered that: foreign companies that want to overcome international barriers and compete with local companies must have their own advantages in intellectual property rights, intangible assets and financial capability According to him, based on these advantages, the company can overcome the difficulties they face such as: geographical distance, lack of understanding about the new environment Markusen also agrees with this point of view and gives supplementary ideas: knowledge-based assets that can be easily moved to any place and provide low-cost means of production, helping the company to achieve high efficiency in production Therefore, firms owning these assets will choose foreign direct investment rather than licensing or transferring them to local firms (J R Markusen, 1995) The breakthrough of the firm-specific ownership advantage theory is that it negates the old, traditional theoretical framework on foreign investment, emphasizing the importance of intellectual property rights and technological advantages of multinational companies when making international market penetration However, this theory is impossible to explain why enterprises in developing countries and/or enterprises without ownership advantages can also invest abroad 1.1.2 Theory of Internalization - The infrastructure system for the research and development of high-tech agricultural sector has not yet received adequate attention - The system of commercial infrastructure such as commercial transaction centers, rural services, storage systems, logistics services, wharfs for gathering and transshipping agricultural products still have many weaknesses , has not met the investment needs - Agricultural FDI enterprises often spend a lot of capital on professional training for workers and invest in the construction of infrastructure for agricultural production such as in-field irrigation, inter-village roads, water supply systems in agricultural production,… that reduce business efficiency While FDI enterprises in industry and commerce are not subject to these investments 3.4.3 Agricultural land is not concentrated For FDI enterprises in agricultural sector, one of the big problems is the lack of land for production Many projects need to expand the area of land for cultivation, but due to Vietnam's policy, production land is often divided among farmers Therefore, for foreign direct investment enterprises that require a large enough land area to serve their operations, it is very difficult to gather enough land, leading to many projects being delayed, not come into operation or not be able to expand investment because of lack of land It can be said that land issues and land-related policies are the biggest barriers to attracting FDI into Vietnam's agricultural sector It is very difficult for businesses to access to accumulate into an area large enough for investment because agricultural land in Vietnam is still fragmented and small It is difficult for businesses to find a large enough area to invest because most of Vietnam's land is currently kept by farmers Meanwhile, foreign investors need large-scale land for agricultural development Projects on afforestation and industrial crops are facing many difficulties because the land fund given to them is not enough in terms of scale and concentration level to produce on large demand For localities with a large area of afforestation such as the Northwest provinces: the terrain is divided, traffic is difficult, it is difficult to find premises to invest in processing plants and other 50 infrastructure items, so they are not attractive to investors Therefore, if you want to accumulate land large enough to implement investment projects the investor must make an agreement with the farmer household; If the agreement can be reached, it will cost twice to pay the land use fee: rent or buy land from the person with the land use right and at the same time have to pay the land fee to the state But there is still an inadequacy that is agricultural projects often take a long time and the process of testing plant varieties often requires strict implementation of the process, so it is difficult for enterprises to feel secure if they have to depend on the farmers' consciousness when the farmer is always ready to break the contract if someone pays a higher price In addition, many localities sacrifice agricultural sector for industrial and urban development, while not paying attention to environmental protection Therefore, the agricultural land fund is narrowed, the water source is polluted, reducing the attractiveness of agricultural sector for foreign investors 3.4.4 The agricultural production is small, scattered, unconnected, and unprofessional Agricultural sector in Vietnam is mainly small production with a very large number of farmers They are not used to mass production of goods, most of them are poor and psychologically complex Production areas are still not specialized with synchronous infrastructure; the production structure is unstable, lack of longterm vision The subjects of agricultural production are mainly households with traditional production methods, simple techniques, and have not been trained in management and technical expertise They make their own decisions to purchase production materials such as plant varieties, fertilizers, plant protection drugs, veterinary drugs, remuneration for labor, field improvement, construction of livestock barns, etc The lack of professional supply services has created low quality of inputs, making it impossible for farmers to improve productivity and product quality Such production methods did not attract FDI investors in doing business with Vietnamese farmers In addition, the banking system and credit institutions have not been strong and dedicated enough to serve agricultural 51 sector, have not created enough credit capital for agricultural producers, leading to an increased pressure on short-term cash capital on FDI investors in purchasing farmers' products, leading to a decrease in their motivation to invest in agricultural sector Agricultural production has not yet formed sustainable linked value chains from input supply, field cultivation, harvesting, preservation, processing and consumption, thus creating an unhealthy market for agricultural products and raw materials 3.4.5 There is no clear and appropriate strategy and orientation to attract FDI into agricultural sector Many areas of production of raw materials have not been planned, or have been, but have not been strictly enforced to create a reputable and branded concentrated production area with a synchronously invested infrastructure system and fully according to the requirements of large commodity production On the other hand, due to lack of planning, or lax planning, lack of effective sanctions to manage concentrated production areas, it has created free development, arbitrary competition, and unprincipled monopoly, causing the market of agricultural raw materials in the region to become chaotic and unstable, resulting in the failure to create a stable development of raw materials, without state control over the origin and quality, the agricultural raw material area is not attractive to FDI The lists of national projects funded by the Government often give little attention to specific information about the agricultural sector Information about each project in the list of national projects calling for capital is still very brief, inaccurate and especially carries the subjective wishes of the agency owners and Vietnamese enterprises, have not mentioned much about real benefits of FDI investors, so they have not attracted the attention of foreign investors 3.4.6 The legal system for foreign investors in agricultural sector is not clear and transparent The regulations of the law on FDI have not mentioned the specific characteristics of the agricultural and agro-product processing and seafood industries (such as the high level of business risks due to dependence on weather, 52 unstable quantity and quality, leading to not being able to dominate foreign consumption markets, domestic enterprises lack capital to make investments, etc.) In fact, FDI is currently applied under the Law on Investment, which does not meet the above requirements and is mainly suitable for the characteristics of industry, capital construction, services but not suitable for the agricultural industry and seafood processing industry This is also one of the reasons why the number of FDI projects in agricultural sector and the agricultural product processing industry in recent years is still very limited Moreover, the coordination mechanism among local agencies in project appraisal and licensing is not serious and clear, causing investors to spend a lot of time and transaction costs, especially in projects that are sensitive to the environment 53 CHAPTER 4: SOLUTIONS TO INCREASE FDI ATTRACTION IN AGRICULTURAL SECTOR IN VIETNAM 4.1 Viewpoints and orientations in attracting FDI into agricultural sector: Although there are still challenges and difficulties for FDI investment in the agricultural sector, it must be affirmed that the ability to attract FDI in agricultural sector is very high because Vietnam is an agricultural country with great potential capabilities and competitive advantages, and at the same time we are integrating deeply into the world economy Vietnam not only has advantages in nature, large population, large purchasing power, but also a country with fast economic development and political stability Therefore, it is necessary to attract investment capital, especially foreign direct investment This helps Vietnam's agricultural sector develop at a fast and sustainable rate to create a premise for the industrialization and modernization of the country The specific views are as follows: (1) Focus on and increase FDI attraction in areas where agricultural sector has potential and strengths to create breakthroughs, apply science and technology to create products of high quality, meet diverse domestic needs and increase competitiveness in the international market (2) Formulate a master plan on attracting and using FDI in agricultural sector, ensuring it is consistent with the economic structure of the sector, region and territory (3) Attracting FDI into agricultural sector needs to ensure compliance with central and local planning on the basis of socio-economic conditions and capacity and quality of staff, focusing on effective management State management in the function of inspecting, supervising and ensuring the strictness of the law; (4) Implement multilateralization of international economic relations to attract FDI into agricultural sector This helps to take advantage of the comparative advantages of each country in each specific project, thereby finding real investors with financial capacity, business reputation, and technological potential In addition, it also 54 reduces dependence on one source of capital from one investor, thereby reducing risks and creating competition among foreign investors, enhancing the position of the host country in negotiations with foreign investors (5) Focus on attracting of high-tech FDI projects to improve agricultural production efficiency and have real transfer of advanced technology, techniques and management experience At the same time, encouraging FDI projects to increase capital and expand scale (6) Protect the environment, not degrade or deplete the necessary nutrients already in the soil 4.2 Opportunities and challenges in attracting FDI into agricultural sector in Vietnam 4.2.1.Opportunities: - Vietnam joined in many free trade agreements, this helps to remove tariff barriers, create favorable conditions for two-way trade between our country and other developed countries such as the EU, Japan, Korea, New Zealand…This has a positive impact on FDI from countries entering our country - In recent years, the trend of FDI in Asia is moving in a new direction, shifting from China (currently leading the world in FDI attraction) to other countries, and Vietnam is a highly appreciated country that has the opportunity to be chosen by many transnational corporations - Participation in ASEAN - an important economic link of the region and the world, has made the economic space of our country greatly expanded - The Vietnamese government has been paying special attention on attracting FDI into agricultural sector Vietnam has issued many legal documents to facilitate the attraction of FDI into agricultural sector, typically: Decree No 21/2017/ND-CP dated February 24, 2017 guiding Resolution 55 /2010/QH12 on exemption and reduction of agricultural land use tax - Political conditions in the region and the world have been unstable in recent years, with coups, anti-government protests, terrorism, religious and ethnic conflicts, etc occurring in many countries The factor of political stability and social security of 55 our country has become prominent Moreover, our government pays special attention to inflation and social security issues, poverty alleviation, which has brought a positive view to investors about Vietnam - An improving business environment and a more competitive labor market, combined with fast-growing consumer demand and a rising middle class, will ensure continued growth as forecast, while continuously being added trade agreements such as the CPTPP will also stimulate export growth and open up new and diverse markets 4.2.2 Challenges: - The growth of the FDI enterprise sector in terms of both human resources and technical qualifications is a big threat to domestic enterprises - Although there have been a lot of efforts to improve the level of labor, technology, product design, etc., domestic enterprises are still considered to have inferior competitiveness compared to foreign businesses Moreover, the integration is deepening, the tariff barriers to protect domestic enterprises are gradually removed This is a big challenge for domestic enterprises - Another challenge that makes foreign businesses not boldly invest in agricultural sector is due to the slow implementation of administrative procedures, especially the lengthy testing procedures Due to this delay, products with high scientific and technological content are easy to become obsolete when allowed to be put into production, seriously affecting the operation of enterprises Due to this delay, products with high scientific and technological content are easy to become obsolete when allowed to be put into production, seriously affecting the operation of enterprises - With the free flow of capital, goods, services, and skilled labor in the ASEAN Economic Community, competition for foreign investment attraction among countries in the region, especially with some countries such as Thailand, Malaysia and Indonesia in modern high-tech and service industries is becoming more and more fierce, while Vietnam's national competitiveness is still inferior to these countries 56 - The complicated evolution of climate change is a big challenge for agricultural development in Vietnam Vietnam is one of the most vulnerable countries to climate change, and agricultural sector is at greater risk because it is highly dependent on climatic and ecological conditions This is one of the major concerns of foreign investors when intending to invest in agricultural sector 4.2 Solutions to attract FDI into agricultural sector in Vietnam 4.2.1 Develop a strategy to attract and use FDI Up to now, Vietnam's agricultural sector has not had a specific and complete strategy in attracting and using FDI in agricultural sector This leads to scattered investment, lack of concentration and long-term future orientation To overcome the above limitations, Vietnam needs to come up with a specific strategy to attract FDI for agricultural development that clarify the following points: - Identify potential partners who intend to invest in Vietnam agricultural sector then build promotion strategies suitable for each country - Determine the comparative advantage of each locality, thereby giving appropriate planning orientation On the basis of the proposed strategy and planning, localities can identify and propose a list of key projects to prioritize capital attraction This list will contribute to limiting the phenomenon of scattered investment, and at the same time, create conditions to build a concentrated agricultural area Therefore, the capital will be used in the most efficient way 4.2.2 Complete the legal system in favor of attracting FDI into agricultural sector: In recent years, Vietnam has had relatively effective policies to attract FDI, thereby attracting a large amount of FDI capital However, the success in attracting FDI is mainly based the low-skilled but abundant and cheap labor force Meanwhile, other factors that attract investors such as synchronization and consistency in the legal system, procedures, ownership rights, etc have not been given due attention In order to continue to promote the effectiveness and overcome the limitations of FDI attraction policies, Vietnam needs to perfect the system of policies to attract FDI in the following directions: 57 - Review policy implementation to avoid overlapping documents In many cases, the later documents conflicts the valid previous documents - Publicize regulations on administrative procedures, jurisdiction, regulatory time, and fee levels in a transparent manner, implement and improve the effectiveness of the "one-stop shop" mechanism to simplify administrative procedures and create a clear and favorable legal corridor for foreign investors when investing in the agricultural industry Fully implement Vietnam's commitments upon international economic integration - Issuing agricultural insurance policies for businesses to limit risks when investing in this field These supports will show Vietnam's interest in the agricultural sector, which is considered the most risky and will make investors feel more secure when investing here - Make a land use plan in each locality according to new requirements to exploit unused land and improve the efficiency of current agricultural land use In particular, the priority issue is land planning with a large area because most FDI projects require this In addition, encourage investors together with the Government invest in developing domestic material areas and ensure the benefits of farmers who have transferred land use rights to FDI investors - Strengthen investment promotion in the direction of approaching potential investors, especially those with technology strengths Organize investment promotion programs in key domestic locations where many foreign investors have invested in Vietnam such as Japan, Korea, and Singapore,.…Organize domestic and foreign exhibitions or participate in exhibitions to introduce the investment environment, provide comparative advantages and investment results of the agricultural sector, etc to attract the attention of investors in the agricultural sector 4.2.3 Upgrade infrastructure for agricultural development Infrastructure is the area that need large investment capital, difficult to recover capital, if it can be, the recovery time is very long, But it is really necessary to invest in upgrading infrastructure, as that is one of the most important reasons to 58 attract FDI in agricultural sector Moreover, the infrastructure in Vietnam is still inferior to other countries in the region such as Thailand and Malaysia In the coming time, it is necessary to focus on upgrading agricultural infrastructure in a synchronous manner, specifically as follows: + About irrigation: Develop irrigation in the direction of modernization, ensure an adequate supply of water to effectively exploit arable land every year, towards active irrigation for 100% rice with crops Focus on investing in the construction of large works to regulate floods, control tides, prevent salinity, keep fresh water, and reduce waterlogging, and limit the impacts of climate change + About rural transport: Connect rural traffic with provincial roads and national highways towards the goal of promoting production development and goods circulation Prioritize road construction in highland and mountainous areas, especially districts and communes with high poverty rates to ensure the correspondence in traffic with other regions, thereby, facilitating the development of commodity production + Other infrastructure: Infrastructure is not only reflected in works such as transportation systems, water supply, drainage and environmental sanitation systems; irrigation system; but also showed in the whole system of social infrastructure including the banking system, audit ; development of communication system The improvement and development of the banking system, financial services, and audit can improve service quality for agricultural enterprises in payment, money transfer, loan, inspection and evaluation activities of the enterprises - Infrastructure planning must be complete, up-to-date and appropriate to the context: The construction and completion of the planning must be based on the actual situation, and data and information should be collected and updated to serve the planning To this, it is necessary to use technology to support , such as using online map building tools based on radar systems as many countries around the world have applied 59 - On the basis of industrialization and modernization, it is necessary to develop concentrated production areas associated with processing and service industries and have a reasonable allocation plan according to each sub-sector, each locality according to strengths For the Mekong River Delta (Long An, Tien Giang, Ben Tre, Ca Mau, Kien Giang….), the South Central region (Khanh Hoa, Phu Yen, Ninh Thuan, Ba Ria - Vung Tau ), we need to increase investment in items serving production, aquaculture and fishing, especially brackish water shrimp farming For Dong Nai, Hanoi, Ha Nam, Vinh Phuc, it is necessary to have a plan to develop stables focusing on raising pigs and poultry for Lam Dong, Central Highlands, Son La, Hung Yen and Hai Duong, focus on developing farms for growing vegetables and fruits - Invest in modern equipment to accurately forecast the upcoming weather situation The weather forecast is important for planning because it helps determine the best times for each stage of the work In addition, forecasting natural disasters early and accurately will help businesses in the agricultural industry take timely measures to reduce losses 4.2.4 Improve the quality of labor force One of the main causes of the shortfall in FDI inflows into agricultural sector is said to be the limited qualification of human resources Foreign investors when coming to Vietnam want to apply advanced and modern technologies, improve labor productivity and enhance the competitiveness of products However, the reality shows that Vietnam's agricultural sector has long been dependent on experience, and human resources with expertise and training in the field of agricultural sector are still very limited compared to the requirements of integration and development The low qualifications of workers have greatly affected access to science and technology Therefore, it is necessary to improve the quality of the labor source by: - Increase investment in education, training and career guidance from high school in rural areas Create favorable conditions to attract qualified and dedicated teachers Especially, there must be a reasonable income regime so that 60 the teachers can feel secure in their work, not give up their jobs and leave the rural areas to return to the city At the same time, there are specific benefits for students majoring in rural and agricultural services such as tuition fee exemption and reduction, scholarships for those with good achievements or difficult circumstances - Reward talented people serving in rural areas and agricultural sector in order to attract good managers and leaders Remuneration is divided into two categories: income and career advancement opportunities Eliminate unreasonableness in receiving high salary according to working seniority, focus on prioritization salary system based on work performance and creativity In additio, implement a reasonable rotation of cadres, preventing the situation where the locality refuses to use talented people from other places when there is no one qualified to lead their locality This is very necessary in order to attract a highly qualified young workforce to the countryside and agricultural sector, and at the same time to put pressure on the rural communities themselves to train and develop talents to avoid the imposition of human resources from superior leaders - For FDI enterprises, there should be regulations requiring FDI enterprises to commit to implementing joint training and training programs for employees Thereby, the quality of labor will be improved, and at the same time take advantage of this opportunity to learn experience, know-how, transfer technology 4.2.5 Promote the development of hi-tech agricultural sector: Developing hi-tech agricultural sector and renewing science and technology is considered as one of the key solutions Applying science and technology solves challenges in agricultural development with the advantages of technologies such as: biotechnology, greenhouse technology, drip irrigation technology, sensor technology, automation helps agricultural production save costs, increase productivity, lower costs and improve the quality of agricultural products, protect the environment On the other hand, high-tech agricultural sector helps farmers be proactive in production, overcome seasonality, reduce dependence on weather and climate, and meet market demand for quality agricultural products Therefore, in the 61 coming time, in order to enhance the application of science, engineering and technology in agricultural production, Vietnam needs to focus on implementing the following solutions synchronously: - First, research and evaluate based on developed countries along with the practice of each region to choose the right products, processes and technologies to apply appropriately Thereby avoiding the situation of over-investing in expensive, high-risk techonologies that are not practical and not achieve sustainable development - Second, Vietnam has not yet developed good varieties, while varieties bring the highest added value to the product Therefore, Vietnam needs to invest appropriately in research and protection of intellectual property rights, in which the state plays a management role, the research and production of seeds is done by enterprises, people and scientists Besides importing and breeding new varieties, it is necessary to focus on conserving and developing precious genetic resources in the country to ensure security, safety, and take the initiative for highquality genetic resources - Third, develop appropriate mechanisms and policies to accumulate and concentrate land for high-tech agricultural development; summarize and evaluate the deployed models as a practical basis to propose possible solutions 62 CONCLUSION In the context of integration, FDI plays a very important role in the development of all economic sectors, including agricultural sector FDI not only adds the necessary capital to expand the scale and promotes economic restructuring in agricultural sector, but also facilitates the transfer of technology, scientific and technical advances into production According to FAO estimates, in the coming time, to meet the demand for agricultural products when the world population reaches more than billion people by 2050, the agricultural sector needs to attract a net investment of about more than 80 billion dollars a year In addition, investors are actively seeking investment opportunities in developing countries, especially those with rich natural resources Aware of this, Vietnam has been making great efforts to attract FDI in general and FDI in agricultural sector in particular However, the reality shows that attracting FDI into agricultural sector is still limited, currently, FDI in agricultural sector is less than 1% of the total investment capital This shows that the potential of the industry has not been really brought into full play The main reasons are: (i) There is no clear and appropriate strategy and orientation to attract FDI into agricultural sector (ii) Agricultural investment activities are high risk, (iii) The mechanisms and policies for FDI in agricultural sector have not really created favorable conditions for FDI projects and attracted investors, (iv) The infrastructure system for agricultural sector has not met the requirements, (v) agricultural land is not concentrated, (vi) The quality of labor force is still low, (vii) The agricultural production is small, scattered, unconnected, and unprofessional In the coming time, in order to attract FDI into agricultural sector, Vietnam needs to implement the following solutions synchronously: (i) Develop specific strategies for attracting FDI of the industry This strategy needs to set out specific goals, objects and localities to attract FDI and partners to aim for, (ii) Complete the legal system in favor of attracting FDI into agricultural sector, (iii) Upgrade infrastructure for agricultural development speed up the agricultural development 63 and create an attractive investment environment for foreign investors, (iv) Improve the quality of labor force to meet the needs of foreign investors, especially those in high-tech agricultural sector, (v) Promote the development of hi-tech agricultural sector to catch up with the general development trend in the world 64 ... Theoretical basis and International experience in attracting FDI in agricultural sector Accordingly, chapter focuses on clarifying some concepts and issues related to FDI in general and FDI in. .. THEORETICAL BASIS AND INTERNATIONAL EXPERIENCE IN ATTRACTING FDI IN AGRICULTURAL SECTOR 2.1 The concept and characteristics of FDI: 2.1.1 The concept of FDI: Today, FDI is the main form of international. .. agricultural sector and criteria for assessing the attraction of FDI in agricultural sector and experiences of some countries in attracting FDI into agricultural sector Chapter 4: The reality of attracting