To keep pace with fast economic growth, Vietnam is to increase its livestock contribution to the country's gross domestic product with two main policies designed to draw foreign investment to meet growing domestic consumption.

Foreign investors are now sub-

ject to a corporation tax of 10 per

cent if they embark on a livestock investment project, against 28 per

cent applied to other kinds of investment, said Nguyen Dang Vang, director of the Livestock Production Department.

Vietnam also offers an unlimited leasing period for rural land for livestock production.

"[By doing so] we aim to improve GDP contribution [of livestock production]

to more than 30 per cent

by 2010," he said on the sidelines of the International Livestock and Dairy Expo (Ildex) last weekend.

A way to do that is shift focus

from crops such as rice, corn

and rubber to livestock production. This is also expected to produce extra land for livestock farming.

Agricultural products contribute 20.5 per cent of the Vietnam's GDP, which is about US$53 billion (Bt2

trillion) and livestock accounts for 20-24 per cent of the agricultural sector value. Demand for all kinds of livestock is expected to increase further in line with the country's sharp economic growth.

In 2005, Vietnam recorded growth of 8.5 per cent and this figure is forecast to remain the same for the next few years as huge foreign investment continues to enter the country since it opened its doors in 1987.

Vietnam, which has a population of about 82 million, produces 2.8 million tonnes of meat per year, of which 76 per cent is pork, 17 per cent poultry and 7 per cent cattle and buffalo. It posted an increase of 11 per cent in volume last year.

"Still, this is not sufficient for

local consumption," Nguyen said, adding that in the near future the

country was not looking to export livestock.

Vietnam has to import high-quality beef from Australia, New Zealand and the US, particularly to satisfy restaurants and hotels, which cater primarily to tourists.

In attracting foreign investment, the country also hopes to benefit from new technologies that should help it raise productivity as well as ensure higher standards of hygiene.

Nguyen said the Vietnamese government

is trying to encourage farmers to develop large-scale production to ensure improved hygiene and increase disease-control measures.

"In the farm environ-ment, it would be easier to control diseases," he said. "We'll embark on a step-by-step approach to modern production."

Ninety-eight per cent of livestock output comes from small producers and 80 per cent of them raise their animals in their houses.

Nguyen said to promote the domestic livestock industry, aside from encouraging large-scale farming, Vietnam will also ensure better disease-control measures in wet markets, where animals are still slaughtered by traditional methods.

Achara Deboonme

The Nation

Ho Chi Minh City