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Irrigation tax exemptions lift farm output (23/03/2011)
irrigation tax exemptions lift farm output
Irrigation tax exemptions lift farm output

     HA NOI — The policy of exempting farmers from irrigation fees, launched in 2009, has been well received by both farmers and companies providing irrigation services.

    Deputy head of the Irrigation Department under the Ministry of Agriculture and Rural Development, Dang Duy Hien, said when the fee was reduced or waived altogether, farmers accurately reported the areas under cultivation instead of generally understating them as previously to save on payments.

     The Government also allocated funds in advance to irrigation companies so that they could ensure enough supplies of water for farmers, Hien said.

     Previously, the providers had to collect the fees themselves and often got into financial difficulties if farmers were slow in paying.

     Hien added that the budget for irrigation had increased by 30 per cent in many localities, including Yen Bai, Thai Nguyen and Lang Son.

     In the Cuu Long (Mekong) Delta provinces of An Giang, Dong Thap, Soc Trang, the authorities spent more money on dredging and cleaning canals so that water could flow more freely.

     Tran Quoc Hung, director of Linh Cam Irrigation Ltd Co in central Ha Tinh Province, said that in 2007, the company provided irrigation water for 16,800ha of crops but last year, the area expanded to about 19,000 ha.

     He attributed this to the new fee policy. "Getting benefit from the policy, farmers are eager to grow crops on land that used to be left uncultivated," he said. Moreover, the money saved on water fees was invested in fertiliser or breeding stock.

     Dao Quang Chien, director of Dien Bien Irrigation Management Ltd Co in northern Dien Bien Province, said monitoring local reservoirs helped to increase rice output. In Dien Bien District alone, the province's biggest rice producing area, the growing area of 6,000ha yielded 6.4 to 6.5 tonnes per hectare.

     Irrigation fees vary from region to region across the country. The lowest are in mountainous areas with fees of VND566,000 (US$28) per hectare per crop. The highest are in the Song Hong (Red River) Delta region with fees of more than VND1 million ($50) per hectare per crop.

     Irrigation fees account for seven to 10 per cent of farming production costs. Farmer Nguyen Van Duong, of Van Giang District in northern Hung Yen Province, said that the lower irrigation fees enabled him to save up for modern machinery.

     The State now pays for 50-60 per cent of irrigation fees for farmers - on top of the hundreds of billions of Vietnamese dong spent fighting the effects of drought and floods.

     Last year, the State budget allocated VND3.338 trillion ($171 million) for localities to implement irrigation-fee exemptions. It also granted VND288 billion ($14.8 million) to pay irrigation companies outstanding fee debts owed by localities.

     However, director of an irrigation company from Dien Bien Province said his company, like others, depended on Government funding, so it was crucial it was allocated on time.

     He said his company needed an estimated operating fund of VND4.3 billion ($22,000) but was just given VND1.5 billion ($7,700).

     He said many farmers had yet to pay outstanding fee debts, creating a burden for service providers.

     Central Highland provinces were faced with another situation. Because the new fees in the region were low, the Government allocated less support than it did to other regions.

     However, both mountain provinces and Central Highland provinces had more difficulties in managing and monitoring irrigation works due to large coverage. — Source: VNS

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