The stimulus package is expected to help farmers purchase machines and materials for production.

Farmers would be the main beneficiaries of a programme being developed by the Ministry of Industry and Trade to support and encourage the consumption of home-grown products while also developing the sector.

The head of the ministry’s Domestic Market Policy Department, Hoang Tho Xuan, said the stimulus package was equivalent to the Government’s subsidised 4 per cent interest rate to businesses, estimated at US$1 billion.

The ministry earlier forecast the sector, which comprises 70 per cent of the population, would achieve a growth rate of 2.8 per cent this year, down from 4.1 per cent the previous year.

Rice remains a key commodity within the package with the ministry setting a target of more than 5 million tonnes for export this year. Experts said a stimulus should also concentrate on breeding, fisheries and traditional crafts while also looking at ways to reduce post-harvest losses.

Agriculture and Rural Development Minister Cao Duc Phat said it would ask the Government to double the fund for building infrastructure facilities from the current VND4 trillion (US$226million).

The head of the ministry’s Institute for Policies and Strategies for Agriculture and Rural Development, Dang Kim Son, said agriculture and rural development should be the priority as negative aspects of inflation and the economic crisis had adversely impacted on the sector.

While boosting production is considered the priority, other ways include improving seed quality and the skills of those working in the industry, as well as relevant infrastructure, he said.

The stimulus would aim to lift the average rural household income by 1.6 per cent and 0.38 per cent in urban area. With more cash, farmers would increase their consumption to the benefit of rural and urban areas.

It is estimated at least 1 million jobs would be generated, considerably more than the 200,000 to 370,000 jobs generated by the industrial sector.

Son said the national growth rate would be raised 1.2 per cent if an investment of 1 per cent of Gross Domestic Product was made in agriculture and rural development.

Minister Phat said a stimulus would quickly reduce problems within the sector and attract significant investment.

Agriculture growth would boost the industrial sector, lift exports and stimulate GDP growth, the Government Office director Nguyen Xuan Phuc told a recent meeting of Government officials involved in the sector.

Huge demand

A TNS global Market Research survey showed, with more income, up to 95 per cent of respondent families from the rural area would buy a television set, 92 per cent would buy electric and gas cookers while about a third would consider buying cassette/radios and refrigerators.

The company said the rural area was supplying 62.5 per cent of GDP, and the number of residents who would buy consumer goods was about three times higher than in urban areas.

Statistics have indicated those receiving a monthly income of more than VND1.5 million was increasing in rural areas.

Many experts said the rural market wanted cheap products but was also demanding high quality.

The HCM City Institute for Economic Research director, Tran Du Lich, said the rural market wasn’t appreciated and had sometimes been forgotten.

Economists said the effects of stimulating the rural market included giving farmers access to better products and services. It would also increase the consumer spending, to the benefit of businesses in the rural areas while limiting the negative impacts of declining urban consumption.

“It is the best time to focus on stimulating the rural market,” said Tran Quoc Viet, general director of Kinh Do joint stock company in the north.

VietNamNet/VNS