CIRCULAR

GUIDING SOME FINANCIAL ISSUES FOR THE IMPLEMENTATION OF THE PRIME MINISTER’S DECISION No. 80/2002/QD-TTg OF JUNE 24, 2002 ON POLICIES TO ENCOURAGE CONTRACTUAL CONSUMPTION OF COMMODITY FARM PRODUCE

In furtherance of the Prime Minister’s Decision No. 80/2002/QD-TTg of June 24, 2002 on policies to encourage contractual consumption of commodity farm produce, the Ministry of Finance hereby guides some financial issues as follows:

I. GENERAL PROVISIONS:

1. Subjects governed by this Circular are enterprises of various economic sectors, which sign contracts on the consumption of commodity farm produce with cooperative unions, cooperatives, peasant households, farm owners or representatives of peasant households (hereinafter called the producers for short).

2. Contracts on the consumption of commodity farm produce signed between enterprises and producers, shall comply with the forms prescribed at Point 2, Article 2 of the Prime Minister’s Decision No. 80/2002/QD-TTg of June 24, 2002 and the Agriculture and Rural Development Ministry’s Circular No. 77/2002/TT-BNN of August 28, 2002 on the forms of farm produce-consumption contracts.

II. SPECIFIC PROVISIONS

1. On investment in and support for infrastructure construction:

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Mountainous provinces and provinces with small budget revenues left for investment shall be partially supported by the central budget through the annual capital construction plans of the localities.

Apart from the above-mentioned capital sources, projects on development of rural traffic roads, infrastructure for aquaculture and infrastructure in rural craft villages may borrow capital from the State’s investment credit source, which shall be incorporated in the annual plans of the provinces and centrally-run cities at the interest rate of 0%. The provision of support from local budgets for, as well as the capital borrowing and loan repayment by, these above-mentioned projects shall comply with the provisions in the Prime Minister’s Decision No. 132/2001/QD-TTg of September 7, 2001.

2. On the State’s development investment credit:

- The producers and enterprises, that sign farm produce-consumption contracts and have projects on agricultural production, perennial tree planting, cattle rearing, aquatic animal catching and rearing, salt production and development of farm produce processing for export, shall be entitled to benefit from the State’s investment in various forms from the Development Assistance Fund under the provisions in Decree No. 43/1999/ND-CP of June 29, 1999 on the State’s development investment credit and the Prime Minister’s Decision No. 02/2001/QD-TTg of January 2, 2001 on policies on investment support from the Development Assistance Fund for projects on export goods-production and/or processing projects on agricultural production.

- Post-investment interest rate support: Enterprises which sign farm produce-consumption contracts with producers and have joint-venture projects or projects on production and/or processing of farm produce for export, when borrowing capital from Vietnam’s lawful credit institutions, shall be entitled to post-investment support for the difference between the interest rates of the credit institutions and the interest rates of the Development Assistance Fund at the same time according to the provisions in the Finance Ministry’s Circular No. 76/2001/TT-BTC of September 25, 2001 on the Regulation on export-support credit.

- The contractual parties shall negotiate with one another on handling of risks brought about by natural disasters, sudden changes in the market prices or other force majeure causes on the principle of sharing risks, and shall be considered by the State for partial support for their damage according to law provisions.

3. The State’s short-term credit:

Enterprises which sign farm produce-consumption contracts with producers and have projects on export-goods production and trading shall be entitled to borrow capital from the Export Assistance Fund under the Prime Minister’s Decision No. 133/2001/QD-TTg of September 10, 2001 and the Finance Ministry’s Circular No. 76/2001/TT-BTC of September 25, 2001 on the Regulation on export-support credit;

- Where the enterprises sign with producers contracts on the consumption of farm produce for export by the mode that the enterprises shall advance capital and supplies or sell supplies for the purchase of farm produce and directly consume farm produce for the producers, they shall be entitled to borrow capital from the Development Assistance Fund.

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4. Financial support for difficulty-hit areas:

- For deep-lying, far-flung, special difficulty-hit, border and/or island areas, where exist investment projects on farm produce production, processing and/or consumption, such projects shall be entitled:

+ To borrow capital from the Development Assistance Fund at the annual interest rate of 3%.

+ If the above projects are implemented by State enterprises, when being put into operation, they shall be fully allocated 30% of their working capital by the State budget.

The procedures, order and dossiers for allocation of working capital shall comply with current regulations.

5. Support for the transfer of technical advances and technologies:

The Ministry of Agriculture and Rural Development, the Ministry of Aquatic Resources and the provincial/municipal People’s Committees shall, basing themselves on the assigned annual budget plans, consider and prioritize the provision of support for the work of agricultural, forestry and fishery promotion in concentrated commodity-producing zones under consumption contracts and at the same time, reserve some funding from the State budget to support enterprises and producers having farm produce-consumption contracts in the following cases:

- Providing partial support for the importation, application and quick popularization of assorted new strains.

- Providing partial support for the purchase of strains for projects on crop and husbandry restructuring, application of technical advances and new technologies, and market information and prices to producers and enterprises.

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Based on the specific conditions of each branch and the efficiency of the above-said projects on technical and technological transfer, the Ministry of Agriculture and Rural Development and the Ministry of Aquatic Resources shall coordinate with the Ministry of Finance in deciding the support for enterprises set up under decisions of the Government, ministries or central branches.

The provincial/municipal People’s Committees shall decide on the support for enterprises set up by their respective localities.

6. Support for export and trade promotion:

Enterprises which sign farm produce-consumption contracts with the producers for export thereof, apart from current financial support policies such as export quota rewards, support for interest on loans borrowed for temporary reserves, trade promotion and market development, and subsidy for loss due to force majeure incidents, shall be given priority to export farm produce under commercial export contracts signed between the Vietnamese Government and foreign countries.

7. On tax policies:

Enterprises of all economic sectors and producers, that have farm produce-consumption contracts, shall enjoy the current tax policies on encouraging the production and processing of commodity farm produce according to law provisions.

III. IMPLEMENTATION PROVISIONS

This Circular takes effect as from the issuance date of Decision No. 80/2002/QD-TTg on policies on the contractual consumption of commodity farm produce.

In the course of implementation, if meeting with any difficulties or problems, enterprises and producers are requested to report them to the Ministry of Finance for study and settlement.

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FOR THE MINISTER OF FINANCE
VICE MINISTER




Tran Van Ta