MINISTRY OF EDUCATION AND TRAINING MINISTRY OF FINANCE

ACADEMY OF FINANCE

HỒ THỊ HOÀI THU

FINANCIAL SOLUTIONS TO SUPPORT FISHERMAN

HOUSEHOLDS IN IMPROVING FISHERIES EXPLOITATION

IN VIETNAM

Major : Finance - Banking

code : 62.34.02.01

EXECUTIVE SUMMARY OF PHD DISSERTATION THESIS

HANOI - 2018

THE DISSERTATION IS COMPLETED

AT THE ACADEMY OF FINANCE

Academic Supervisors: 1. Assoc. Prof., Dr. Doan Minh Phung

2. Assoc. Prof., Dr. Vu Thi Bach Tuyet

Reviewer 1: ........................................................

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Reviewer 2: ........................................................

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Reviewer 3: ........................................................

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The dissertation will be defended at University level Council

of Dissertation Assessment at the Academy of Finance Time: ....................date ............ month ........... year 2018

The dissertation could be found at Vietnamese National Library and

Library of the Academy of Finance

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INTRODUCTION

1. Rationale

Over the past years, the aquaculture exploitation of our country has

developed strongly and plays a considerable part in the development of the

fishery sector, gradually turning positively into fisheries exploitation to

increase the efficiency and quality of offshore exploited products.

Fisheries exploitation has achieved great achievements thanks to the

efforts of the Government in giving practical financial solutions to support

fishermen, such as budget for infrastructure and post-service fishery;

Providing preferential credit loans for building, replacing and upgrading

fishing vessels; exemption and reduction of taxes; insurance premiums ...

However, along with the development, Fisheries exploitation industry

faces many difficulties and challenges due to the ineffective financial

support solutions. This leads to: wasted use of budget capital; Fishermen

are lack of money to build, upgrade and convert vessels of high capacity;

Insurance activities attract insufficient number of fishermen involved due

to difficult insurance payment, complicated insurance procedures ... On the

other hand, the way of these financial support solutions is sometimes not

yet in line with reality.

In fact, there have been no topics to study synthetically both theory

and practice on financial solutions to support fishermen households in

Vietnam. Therefore, the PhD student decided to choose the topic:

"Financial solutions to support fisherman households in improving

fisheries exploitation in Vietnam "as the doctoral dissertation in the

hope that the results of the thesis will not only contribute theoretical but

also practical implications for supporting fishermen households to

develop fisheries activities in the current condition.

2. Overview of the research on fisheries exploitation

The dissertation deals with research on fisheries exploitation and

financial solutions to support domestic and foreign fishing households and

point out the gaps of the research works

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3. Research aims

- To study and clarify the theory of fisheries exploitation and

financial solutions to assist fishermen households in developing fisheries

activities. Experience of countries in the world are analyzed to draw

lessons for Vietnam.

- To analyze and evaluate the current situation of financial solutions

to assist fishermen and its impacts on fishermen. Point out the

achievements, limitations and the limited causes of such financial

solutions.

- To propose orientations to further improve financial solutions to

assist fishermen in developing fisheries activities in the near future.

4. Research subjects and scope of study

* Research subjects

Financial solutions to assist fishermen in developing fisheries

activities

* Scope of study

- The dissertation focuses on studying financial solutions from the

State for fishermen's households in fisheries activities.

- The thesis emphasizes on financial solutions to assist fishermen in

marine eco-tourism, especially offshore fishing.

- Research time: the current situation of financial support solutions

for fishing activities since 2010 in Vietnam.

- Proposed solutions to 2020, vision to 2030

5. Theoretical foundations and research methods

* Theoretical foundations

Dissertation used: economic theories, sustainable development

theories ...

* Research methods

- The main methods employed are statistics, analysis and synthesis,

methods of comparison, selective inheritance of previous research to

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clarify the research problems. Then, the calculation of the data is based on

the results of the survey conducted by the General Statistics Office.

- Data analysis: Exel is used to list, synthesize, select, compare and

analyze information.

6. New contributions of the thesis

* In theory

- Providing opinions on fishermen's households operating in fisheries

exploitation, supporting fishermen households, and factors affecting the

financial support.

- Develop support contents and financial solutions to assist fishermen

households in developing fisheries activities in current conditions.

* In practice

- To analyze and evaluate the current situation of financial solutions

to support fishermen households in Vietnam in the period 2010 up to now.

How do the solutions affect the fishermen? The cause of the problems in

implementing the solutions.

- To study and propose to perfect 4 groups of solutions on state

budget, taxes, credit, insurance, especially credit solutions.

7. Structure of the thesis

- Chapter 1: Literature review on financial solutions to assist

fishermen to develop fisheries exloitation.

- Chapter 2: The current situation of financial support solutions to

aid fishermen in developing fisheries exploitation in Vietnam.

- Chapter 3: Improving financial solutions to assist fishermen to

develop fisheries exploitation in Vietnam.

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Chapter 1

LITERATURE REVIEW ON FINANCIAL SOLUTIONS TO

SUPPORT FISHERIES EXPLOITATION

1.1. OVERVIEW OF FISHERMAN HOUSEHOLDS AND

SUPPORTS TO DEVELOP FISHERIES EXPLOITATION

1.1.1. Fisherman households and fisherman households engaged

in fishing activities

1.1.1.1. The concept of fisherman households and fishing

households engaged in fishing activities

In the course of the study, the author brought forward the concept

that fishing households engaged in fishing operations are the activities of

individuals or households for the purpose of gaining profits through the

use of vessels, boats, nets, traps, fishing rods ... or other means of catching

and collecting fish or aquatic species from rivers, lakes or oceans. Aquatic

products can be used for personal or trading needs.

1.1.1.2. Types of fisheries exploitation

* Inland capture fisheries

- Brackish water fishing

- Freshwater fishing

* Sea fishing (seafood fishing)

1.1.1.3. Characteristics of fishing households engaged in fishing

activities

Firstly, fishermen households engaged in fishing and aquaculture

activities are formed according to their natural characteristics, members of

the household are related by rank and share the same economic ownership.

Secondly, the linkage in the community is relatively high

Thirdly, assertiveness and an important personal role

Fourthly, the fishing activities of households are traditional, not

trained properly

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1.1.1.4. Importance of fisherman households to exploit aquatic

resources for socio-economic development

Firstly, providing food and nutrition to all population, contributing to

boosting economic growth and exports.

Secondly, contributing to solving employment and income generation

for coastal fishermen.

Thirdly, contributing to protecting the environment and aquatic

resources.

Fourthly, contributing to security and defense

1.1.2. Assisting fishermen to develop fishing operations

1.1.2.1. The concept of supporting fishermen to develop fishing

activities

The dissertation deals with the viewpoint of supporting fishermen to

develop fishing activities as follows:

These are all activities of the State to help fishermen households

engaged in these fields:providing environment, production facilities,

favorable business condition; providing market information; to help

reduce costs, support technology ... through effective financial solutions to

increase fishing capacity and increase income for fishermen.

1.1.2.2. Content to support fishermen to develop fisheries activities

- Support input costs

- Support loans for procurement, building, upgrading ships, purchase

fishing equipment

- Support to build infrastructure for fishing

- Support for training and upgrading skills for fishermen

- Support the transfer and application of science and technology

- Support the development of seafood collection services at sea

- Loss support and disaster risk prevention

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1.1.2.3. The neccessity to support fishermen to develop fishing

operations

- Derived from the role as well as contributions of fishermen in the

national economy, at the same time showing the role of state management

in the context of international economic integration.

- Low level of skill and fishing capacity of fishermen

- Limited financial resources for fishermen

- The requirements on quality and hygiene of food safety are

increasing.

1.2. FINANCIAL SOLUTIONS TO SUPPORT FISHERMAN IN

AQUACULTURE EXPLOITATION

1.2.1. An overview of financial solutions

A financial solution is a term used to refer to the management of a

financial category that exists objectively in the market economy as a

means of influencing the interests of different stakeholders to achieve

certain goals. Financial solutions of the state are implemented through

financial policies. This policy system includes: budget spending policy;

policy of tax; credit policy; insurance policy; investment policy, exchange

rate policy ...

Within the scope of the study, the thesis presents four basic financial

policies: State budget expenditure policy, tax policy, credit policy,

insurance policy. These policies play a very important role in supporting

fishermen to develop fisheries activities.

1.2.2. Content of financial solutions to assist fishermen to develop

fishing activities

1.2.2.1. State budget expenditure policy

Firstly, state budget expenditure ensures the necessary conditions for

fisheries activities of fishermen.

Secondly, state budget spending contributes to improving the skills of

fishermen

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Thirdly, state budget expenditures contribute to the reorganization of

production at sea.

* How to implement budget spending policy in fisheries exploitation

Direct expenditure: The State directly allocate budget capital

resources to each locality for implementation of programs and objectives.

Indirectexpenditure: The state subsidizes indirect capital for

fishermen through subsidizing the difference in interest rates for

commercial banks (applied for the form of fishermen borrowing loans for

building or upgrading fishing vessels or borrowing capital for procurement

of machinery equipment).

1.2.2.2. Tax policy

In fishing exploitation activities, the tax policy affects fishermen in

terms of:

- Contribute to encouraging fishermen to apply clean technology,

engaging in fishing activities without polluting environment.

- Contribute to changing the scale of production, improving profits

for fishermen.

* Implementation methods of preferential tax policy:

- By determining taxable objects and non-subject to tax

- By specifying the tax rate

- Approving the conditions for preferential treatment, tax incentives

and reduction

1.2.2.3. Credit policy

In fisheries exploitation, credit is considered one of the important

forms of capital mobilization, because:

- Credit can meet the fishermen’s demand for capital

- Increasing the efficiency of exploitation operations

- Increasing access to market information for fishermen

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* Method of implementing the credit incentive policy in aquatic

resource exploitation

- Low interest rates (lower than normal commercial loans)

- Long term loans

- High limits on loans

1.2.2.4. Insurance policy

For fishermen, the participation in insurance changes the lives of

fishermen:

Firstly, risk transfer

Secondly, stable costs

Thirdly, peace of mind

* Method of implementing preferential policies in fisheries exploitation

Insurance preferential policies shall be implemented through the state

budget to support the purchase of insurance for fishing vessels, logistic

service ships; Supportong funds for the purchase of crew insurance.

1.2.3. Criteria for assessing the combined impact of financial

solutions on fishing households

- Ability to exploit

- The level of labor

- Income from exploitation activities

1.2.4. Factors affecting the use of financial solutions to assist

fishermen in developing fishing exploitation

(1) objective factors

* Natural condition

* Social and economic conditions

(2) subjective factors

* Viewpoint of support policies of the government and authorities

* Capacity of the State and organizations for support.

* Ability to receive support from business households

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1.3. INTERNATIONAL EXPERIENCE ON THE USE OF

FINANCIAL SOLUTIONS FOR ASSISTING FISHERIES TO DEVELOP

AQUATIC EXPLOITATION AND LESSONS

Firstly, to emphasize the use of macro-financial solutions to assist

fishery households in developing fisheries exploitation.

Secondly, logistics support in fisheries exploitation is a priority in

support through financial solutions.

Thirdly, establishing specialized organizations to support fishermen

in many aspects: finance, technology, human resources, product quality,

consumption market ...

Chapter 2

CURRENT SITUATION OF FINANCIAL SOLUTIONS

TO SUPPORT FISHERMAN HOUSEHOLDS IN DEVELOPING

FISHERIES EXPLOITATION IN VIETNAM

2.1. OVERVIEW OF THE FISHERMAN HOUSEHOLDS

ENGAGING IN AQUATIC EXPLOITATION IN VIETNAM

2.1.1. Advantages, disadvantages and exploitation grounds of

fishing households

2.1.1.1. Advantages

- Vietnam is one of the countries with advantages in the sea and has a

favorable geographic position for the development of fishing.

- Variety of aquatic species

- The demand for seafood in the world is increasing, and the market

is expanding

- Political stability is a solid foundation for a favorable environment

for socio-economic development.

2.1.1.2. Disadvantages

- Industrialization and modernization are an urgent need for fishing.

- Low educational level and slow change in coastal structure.

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- Production activities are still self-sufficient, production technology

is primitive and backward, products are of poor quality.

- The market is increasingly demanding with sanitary and quality

requirements and strict regulations.

- Activities to support loans to fishermen are still inadequate

2.1.1.3. Fishery resources in marine areas and fishing grounds

exploited in Vietnam

- Fishery resources in Vietnam's sea areas: To be distributed among 5

sea areas including the Northern Gulf, the Central Vietnam, the South

East, the South West and the South China Sea.

- Fishing grounds exploited in Vietnam: The Northern Gulf has 3

fishing grounds with main harvesting seasons from June to May; Central

Vietnam with 5 fishing grounds with main harvesting seasons from May to

July; Southern sea has 5 fishing grounds with main harvesting season from

December to February; in the Gulf of Thailand, 2 fishing grounds

harvested all year round

2.1.2. Scale and structure of fishing households

2.1.2.1. Scale of fishermen households operating in fisheries

Fishing households in fisheries tend to increase slightly, in the

Mekong River Delta, the number of households participating in fishing

and aquaculture is the largest.

2.1.2.2. Social characteristics of fishermen households in fisheries

activities

This feature is expressed in terms of human capital, material capital,

financial capital, investment capital, social capital and livelihood.

2.1.3. Fisheries exploitation output of fishermen households

over time

2.1.3.1. Inland exploitation

Over the past years, there have been changes in the management of

freshwater fisheries. Most freshwater areas are not allowed to be exploited

freely anymore, the water surface use rights are gradually allocated to

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different individuals or organizations. As a result, freshwater fisheries are

gradually converted into freshwater aquaculture or cage culture.

2.1.3.2. Fisheries (near shore and offshore fishing)

According to the Fisheries Law, this form of exploitation is not

encouraged to develop due to over-exploitation of fishery resources,

especially destructive fishing methods such as the use of toxic substances

and substances explosive.

Offshore fishing is encouraged to develope and often has a large

share in the capture fisheries. In general, catches have been on the rise in

recent years, but if compared with those in developed countries, the

increase is still low. The main causes are:

- Traditional fisheries have not yet escaped to be a handicraft fishery,

small scale production, household size, spontaneous development

according to the market mechanism.

- The number of vessels is highly concentrated while the fishing

grounds have not been widened, resulting in the low efficiency of the

majority of vessels due to reduced productivity.

- Lack of proper and timely support policies of the State.

2.2. SITUATION OF USING FINANCIAL SOLUTIONS FOR

FISHERMAN HOUSEHOLDS TO DEVELOP AQUATIC

EXPLOITATION IN VIETNAM

2.2.1. Overview of State policies on financial solutions to support

fishermen to develop fishing operations

* The period before July 2014: The main policies focused on helping

fishermen overcome disaster risks, reduce post-harvest losses, support oil,

support building, replacing fishing engines, hull insurance, crew insurance,

etc. These policies were scattered and did not create a breakthrough in the

fishing industry.

* The period from 7/2014 up to present: Fisheries development

policy at this stage has created a new advantage for the fishery sector: to

change the old fishing method, form new fishing method, fishing

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offshore. In particular, the transition of Decree 67/2014 / ND-CP dated

7/7/2014.

2.2.2. The implementation of financial solutions to assist

fishermen to develop fishing operations

2.2.2.1. State budget expenditure policy

(1) Investment in infrastructure construction, fishery logistic services

State budget expenditure for infrastructure construction: In the 2011-

2015 period, fisheries capital allocated from the state budget for

investment in fishing ports will be VND 307 billion. The total investment

capital for fishing ports is estimated at VND 307 billion, equivalent to

31.6% of the total demand (VND 6,229 billion).

State budget expenditures for storm shelter: The total targeted state

budget for 2011 - 2015 is VND 1,911 billion, reaching nearly 30% of the

demand (VND 6,394 billion) of the plan until 2015.

Capital of Decree 67

In 2015, state budget allocated VND1,501 billion, up 30.5%

compared to 2014, of which the investment capital through the Ministry of

Agriculture and Rural Development is 160 billion (in 2014 is 90 billion)

increased 78%.

In 2016, the state budget allocated VND1,164 billion (down 22.5%

against 2015), of which the investment capital of the Ministry of

Agriculture and Rural Development was VND125 billion and the local

budget was VND1,016 billion.

(2) Expenses for training and upgrading of professional skills

Between 2011 and May 2015, more than 100 training courses for

captain and chief engineer were organized with the budget of over 5

billion VND, giving certificates to 2,892 fishermen. Particularly with

Decree 67, until 31/12/2016, localities developed plans, cost estimates and

organized training for 1,892 crew members with a budget of 7,603 million

However, the number of people registering for training courses of

crew members operating steel shell ships or registration for participation in

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technical training courses to exploit and preserve products with new

technology; the training of captain, chief engineer and crew is currently

only on shore; The acquisition of knowledge, skills of using, operating

steel shell ship is still weak due to limitations.

(3) Expenditure for investment in research, transfer and application

of science and technology for fisheries

The research focused on three main areas, including: research and

improvement of fishing gear, technical process of exploitation for

production; study of equipment for exploitation; research and application

of selective gear for the protection and rehabilitation of aquatic resources

(4) Other types of expenditure:

Expenditures to support fishermen to overcome risks caused by

natural disasters at sea; expenditure on input costs; support expenses for

transporting goods from land to offshore fishing ships and transporting

products to the mainland; 100% of the cost of designing steel shell ships

with a capacity of 400CV or more; Allowance for 100% maintenance and

repair expenses for steel shell ships with a capacity of 400CV or more (but

not exceeding 1% of the value of building steel shells)

2.2.2.2. Tax policy

Exemption of taxes for fishermen: excise tax, personal income tax,

natural resource tax, VAT not subject to tax ... The tax incentive in

fisheries is considered the biggest.

2.2.2.3. Preferential credit policy

This is the most basic policy that has made important breakthroughs

in the fisheries sector, including:

(1) Preferential credit policy for building and upgrading fishing vessels

- Up to 30/6/2017, commercial banks have signed credit contracts

to build and upgrade 993 ships (593 wooden shells, 333 steel shells and

67 new material shells), accounting for 92% of the total. Request for

borrowing from the owner with the total amount of loan commitments is

9,814 billion; Loan disbursement reached VND8,928 billion, up 14%

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from December 31, Total outstanding loans to VND7,767 billion (as of

July 1, 2012)

- 761 new fishing vessels have been put into operation, including 301

steel shells, 53 composite ships, 407 new wooden shingles and 105

upgraded fishing vessels.

Limitations:

- For the commercial banks: There are still hesitant in the process of

approving the loan application.

- On the borrower's side: The percentage of fishermen borrowing is

not high

- Provincial People's Committee: Difficulties in the process of

approval.

(2) Working capital loans

The commercial banks have assessed, signed contracts with 267 ship

owners and disbursed the total amount of nearly 110 billion in Quang Ngai,

Quang Binh, Quang Nam, Quang Tri, Binh Dinh, Tien Giang, Phu Yen , Thua

Thien Hue, Khanh Hoa, Bac Lieu, Binh Thuan, Kien Giang, Ninh Thuan, Bac

Lieu. There are 78 outstanding customers with the amount of nearly 31 billion.

Limitations:

- The procedures and processing of lending must be approved through

many levels, fishermen still have to follow the process of commercial

commercial loans normally.

- Forms of lending and lending mechanism are not suitable and there is

no mechanism to handle risks for commercial banks

(3) One-time post-investment loans

Currently, the People's Committee of Binh Dinh Province has

approved 35 eligible cases to participate in the policy; Thua Thien Hue has

approved and signed contracts to build 5 new cases under Decision 47 of

the Government.

- Advantage: The full amount of support to the shipowners when

investing in the ship, clearly demonstrates the fair policy for every

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shipowner (every shipbuilding case is supported, regardless of the have a

bank loan to invest or not).

- Limitations: The burden of support will be on the state budget, not

calling for external assistance. Short-term policy implementation (15 days)

makes it difficult for people to access policy.

2.2.2.4. Insurance policy

Implemented in 6 months 2017: Total value of insurance was 570.7

billion; The total number of vessels involved in hull and fishing gear

insurance was 142 fishing vessels; the total number of insured crew

members was 4,936; The total premium was 6.8 billion dong. Insurance

compensation amount reached 83.7 billion. Claim expense wass estimated

at 121 billion VND

2.3. THE IMPACTS OF FINANCIAL SOLUTIONS TO FISHERIES

ACTIVITIES IN VIETNAM

2.3.1. Exploitation capacity

The structure of the fleet across the country has changed markedly.

In the whole country in 2010 there were 123,456 fishing vessels with the

number of vessels under 90CV 101,475 and over 90CV 21,981. By 2016,

the total number of fishing vessels reduced to 110,861 fishing vessels, of

which vessels under 90CV decreased markedly (75,995 fishing vessels)

and number of fishing vessels increased to 90 CV (34,866 fishing vessels).

This is a qualitative change in fishing activities of fishermen thanks

to the support of the Government through financial policy.

2.3.2. Labor qualification

The level of education is low, of which the proportion of people who

have not completed primary school is relatively high. The highest is in the

Mekong Delta and this rate has not tended to decrease much.

Teams of captains and chiefs are less trained through formal training,

lacking basic knowledge to make good use of marine equipment, lack of

knowledge of maritime law to operate in international seas.

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However, in recent years, together with the state budget support policy

for fishermen to develop human resources for exploiting aquatic products,

the qualification of fishermen has increased, especially in Red River Delta -

where fishermen have more access to schools.

2.3.3. Income from exploiting activities

The average monthly income per capita of the group of fishing

households tends to increase over the years, with the highest in the Red

River Delta, the lowest in the northern mountainous areas and the central

coast. In 2016 compared to 2010, the average income per household

increased more than 2, 5 times. The reason is that thanks to the large ships

(especially the 67 ships), fishermen have been able to seize the sea for

longer, exploiting more effectively the exploitation output increased. This

will be the basis for fishermen to improve their livelihood and invest in

expanding production

2.4. GENERAL ASSESSMENT OF FINANCIAL SOLUTIONS OF

ASSISTANCE FOR DEVELOPMENT OF AQUATIC EXPLOITATION

IN VIETNAM

2.4.1. Achievements

(1) Objectives of policies

- State budget expenditure policy: Although the state budget has not yet

met the requirements, the State budget has initially given priority to the

allocation of investment capital for targeted programs in the fisheries sector:

storm shelter, fishing ground; Credit policies with the modernization of

fishing vessels have had encouraging results: more than 47% of ships are

steel shells, new shells, with more than 50% of ships with capacity of over

800CV are equipped with modern has been newly built, upgraded through

the policy of bank loans.

(2) Impact on beneficiaries of policy

The policies are basically synchronous, in line with the minds and

aspirations of fishermen, contributing significantly to the development of

the fisheries sector towards industrialization and modernization, raising

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output and income, improving the livelihood of the coastal fishing

community.

(3) Equity in policy is ensured.

All fishermen who meet all the conditions of the policy are entitled

to incentives, reasonable allocation of costs and benefits, rights and

obligations among stakeholders, implementation of policies and groups of

fishermen related to policy.

(4) The frequent occurrence of fishermen in the sea also contributes

to affirming the sovereignty of the Vietnamese sea islands, preventing

foreign fishing vessels from exploiting seafood in the water areas under

Vietnam's sovereignty.

2.4.2. Limitations

Firstly, the financial policies supporting fishermen in fisheries have

not impacted extensively on the whole of fisheries and aquaculture, but

mainly on the offshore fishery.

Secondly, the implementation of the policies of the ministries,

branches and localities is mainly focused on the implementation of the

credit loan policy to build fishing vessels without sufficient attention to the

implementation of other policies. .

Thirdly, policies affect unevenly on different population clusters due

to the level of awareness of officials and people.

Fourthly, the development of criteria, appraisal and approval of lists

of fishermen building new fishing vessels between provinces is not

uniform.

Fifthly, the lack of synchronous implementation of policy

mechanisms, especially in Decree 67.

Sixthly, most of the fishermen households operate in small and small

types, with individuality, the participation of cooperative groups and

cooperatives is low, so many fishermen are not enttitled to enough

conditions for participation in tax policies and insurance support ...

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2.4.3. Causes

2.4.3.1. Objective causes

Due to the influence of natural conditions, the climate change.

- Due to the low awareness of local people, with less

environmentally friendly practices and habits, lack of cooperation and

cooperation in mining activities.

2.4.3.2. Subjective causes

- Infrastructure planning, technology transfer research, environmental

management, etc. are still limited, and do not meet practical needs.

- Lack of timely support and content, consistent with the

characteristics and conditions of each locality.

- The support policies lack of linkage, coordination should not be

effective. Many localities only focus on directing the implementation of

shipbuilding policies without paying attention and implementing other

policies.

- There is a lack of coordination among management agencies in

supporting policies, some policies fail to ensure consistency and overlap

Chapter 3

IMPROVING FINANCIAL SUPPORT SOLUTIONS

TO ASSIST FISHERIES HOUSEHOLDS IN AQUATIC

EXPLOITATION IN VIETNAM

3.1. DOMESTIC AND INTERNATIONAL CONTEXT

According to the Prime Minister's Decision No. 332 / QD-TTg dated

3/3/2011 and WTO regulations.

3.2. PLANS FOR AQUATIC EXPLOITATION TO 2020, VISION

TO 2030

3.2.1. Fisheries production planning

In terms of fishery production, the trends are to decrease slightly in

the planning period, decreasing 0.1% / year on average (2010 - 2020) and

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increasing by 0.45% / year (2020 - 2030), stabilizing domestic exploitation

at 0.2 million tons / year. Targeted exploitation tends to increase offshore

fishing, reduce near shore, increase objects of high economic value.

3.2.2. Planning the structure of fishing vessels

The planning of vessels in each sea area has been on a downward

trend over the years. In the 2001-2020 period, the Tonkin Gulf area will be

reduced by 3.98% / year, the Central Coast will decrease by 4.43% / year,

the South East Sea area will decrease by 0.86% / year, decreased by 1.19%

/ year. In the 2020-2030 period, the waters of the Gulf of Tonkin will

reduce by 2.4% / year, the Central waters will decrease by 0.96% / year,

the South East Sea by 0.71% / year and the South West waters will

decrease by 1%. , 23% / year.

3.2.3. Planning fishery logistic facilities

Based on the vessel data collected, the planning of fishery logistics

facilities will be in the direction of ensuring the needs of fishing vessels

for fishermen in all sea areas to go in, loading and unloading products,

provide the essentials for sailing.

3.3. VIEWPOINTS ON FINANCIAL SOLUTIONS FOR THE

FISHERIES ASSISTANCE IN DEVELOPING AQUATIC EXPLOITATION

IN VIETNAM

- Supports must contribute to protecting national security and

national sovereignty

- Compatible with the characteristics of the fishing industry

- In line with the planning of the development of the aquatic

exploitation sector of the Government

- Support types must be diversified

- Reduce development quantatitive support, increase development

support in depth

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3.4. IMPLEMENTATION OF FINANCIAL SOLUTIONS FOR

ASSISTING THE FISHERIES DEVELOPMENT IN VIETNAM

3.4.1. Improving the state budget spending policy

Focusing on the following issues:

Firstly, determine the proper increase of state budget expenditure for

each stage of development of fisheries sector

Secondly, supports from the state budget for fishermen's development

of sustainable aquaculture

Thirdly, to provide financial support to encourage fishermen

households to participate in fisheries activities in the form of production

teams, groupss, development of logistics services on the sea

Fourthly, strictly control the design process, reduction of change

pressure, modification of ship models which can increase the burden on

the state budget.

The above analysis shows that the demand for capital to support

fishermen in developing fishing activities is very limited, but the state

budget is limited. Therefore, to increase more financial resources to

support fishermen, it is necessary to:

(1) Ensure that the implementation process is satisfactory to reach

the maximum subsidies.

(2) For insufficient support:

- Restructure expenditures on state budget spending for irrigation and

water management activities, and restructure expenditures in total State

budget expenditure. Especially expenditure in some state budget funds

which are not used up can be used to support fishermen.

- Cut down on regular spending, especially expenses for meeting,

visiting, entertaining customers to support fishermen in islands.

- Localities review unnecessary projects, especially the projects to

create future benefits, limit the foreign seminars, sightseeing, tourism ...

- Diversify forms of investment in fishery infrastructure through

appropriate investment forms such as PPP, BOT, BT

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- Increasing state budget revenues to increase expenditures through

property taxes, rent for land, water surface ...

- Supplementing capital support from the central budget for

provinces to invest in infrastructure and fishery services. Investment

capital for storm shelter program, fishing port to improve infrastructure

and logistic services in accordance with the planning, ensuring socio-

economic development, national defense and security, protection of marine

sovereignty of islands in the provinces and cities with sea borders,

especially island districts and communes.

3.4.2. Improving tax policy

Amending a number of provisions of the system of relevant legal

documents on registration fees, license fees, personal income tax, import

tax and value added tax.

3.4.3. Improving credit policy

Focusing on some basic issues:

Firstly, on mechanisms and policies

Secondly, improving the bank's human resources specializing in

fisheries and shipbuilding.

Thirdly, expanding the size of credit

Fourthly, development of lending through intermediaries

Fifthly, implementing a risk sharing policy and take flexible risk

measures

Sixthly, applying the form of financial leasing credit (applicable to

fishermen with steel shells but not enjoying preferential policies under

Decree 67)

3.4.4. Improving insurance policy

- To ease conditions and procedures for participation in insurance

- To extend the scope of compensation for loss when offering

insurance policies

- Expansion of the insurance package in insurance companies and

policies to support insurance for vessels with a capacity of <90 CV.

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- Responsibility for insurance payment: Additional regulations on

objective causes of losses which are entitled to the risk management

mechanism in accordance with Decree 67. At the same time raise the

awareness of insurance companies in insurance payment activities.

3.5. IMPLEMENTATION

Co-ordinate financial solutions in supporting fishermen households

in the development of aquatic exploitation

Capital sources and policy implementation mechanism

3.6. RECOMMENDATIONS

3.6.1. For Prime Minister and Ministries

- Prime Minister: Promulgation of the Decree amending and

supplementing a number of articles of Decree 67 takes effect from January

1st, 2018.

- Ministries, sectors: Guide the implementation of insurance policies

in accordance with Decree 67, Decision 48 ... In particular, continue to

implement insurance policies for fishing vessels and crew members in the

direction of the Prime Minister covered by Resolution 113 / NQ-CP dated

31/12/2016 and considered allowing the implementation of insurance

contracts in the form of contracts on the number of employees on each

fishing vessel instead of the list of each crew member (similar to the

implementation of oil support policy for fishermen under Decision 289 /

QD - TTg dated 18 March 2008 of the former Prime Minister)

Exemption of registration tax for ships newly built under Decree 67

of the Government as for passenger ships

To allocate budget for implementation of policies as prescribed in the

Decrees, Decisions ...

Guide on mechanism of the interest rate subsidy to implement credit

policies, especially credit policies in accordance with Decree 67, as

stipulated in Article 4.

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3.6.2. People's committees of provinces and cities under central

authority

- Approving the Department of Agriculture and Rural Development

(DARD) to take initiative in adjusting the targets of new fishing vessels to

meet the actual demand among localities in the implementation of Decree

67/2014 / ND-CP.

- Assist each locality to identify areas and regions planned according

to orientations

- Supporting departments, committees and localities with operational

funds, implementing trial models in each region and locality with high

demand.

- To direct and organize the implementation of activities through the

formulation and implementation of specific plannings and plans on the

development of aquatic resources in localities and sea areas under their

respective management.

- Assisting and accompanying the banking sector to monitor and

supervise the operation of ship owners who are enjoying the preferential

credit policies in accordance with Decree 67/2014 / ND-CP and Decree

89/2015 / ND - CP as well as coordinated with the bank to manage the

loan security assets

3.6.3. Associations, Fisheries Associations

The professional associations and related organizations coordinate

with the Ministry of Agriculture and Rural Development, ministries,

departmentsand localities in organizing activities to support fishermen to

enjoy the policy preferences in the best way. Finally, in order for policy

implementation to be successful, it is important for close and regular

coordination between the parties to be made. 1) fishermen and fisheries

associations, 2) ministries, 3) local governments, 4) commercial banks and

insurance companies. Accordingly, the parties should exchange, share

information, cooperate and agree upon in the process of performance.

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CONCLUSION

The results achieved by the thesis are as follows:

Firstly, the dissertation studied the concepts, characteristics and

contents related to fishermen households and supports for fishermen to

develop fisheries exploitation.

Secondly, the thesis has pointed out the influencing factors as well as

the neccessity to assist fishermen to develop their fishing activities in the

current period. Lessons learned from other countries have contributed to

the logic consolidation in financial support contents.

Thirdly, the dissertation has developed financial solutions

implemented through 4 main financial policies to support fishermen's

development of the fishing industry in the current period: State budget

expenditure policy, tax policy , credit policy and insurance policy.

Fourthly, the thesis also evaluated the current situation of financial

solutions used to support fishermen's households in the development of

fisheries exploitation. On that basis, the criteria for assessing the combined

impact of such financial solutions on fishermen: criteria for vessel

capacity, income and labor. Pointing out the achievements and

shortcomings as a basis for proposing solutions to improve policies to

support fishermen's development of fisheries in Vietnam in the near future.

Fifthly, the dissertation has provided orientations and perspectives

to assist fishermen in improving fisheries exploitation in the most

effective ways, proposing solutions to improve state budget expenditure

policy, tax policy, credit policy. and insurance policies on different

aspects and angles.

LIST OF PUBLICATIONS

RELATED TO THE DISSERTATION

1. Hồ Thị Hoài Thu "The role of financial support to households

engaging in aquaculture in Vietnam", Journal of Fisheries, No. 23,

pp.48-49.

2. Hồ Thị Hoài Thu "Insurance incentives under Decree 67/2014 / ND-

CP for financial support to fishermen in fisheries exploitation ",

Journal of Industry and Trade, No. 12, pp.220-223.

3. Hồ Thị Hoài Thu "The situation of state budget expenditure on fishing

activities in Vietnam in recent years and some existing problems ",

Journal of Industry and Trade, No. 3, pp.138-143.

4. Hồ Thị Hoài Thu "Experience in supporting fishermen in fishing

exploitation in some countries", Journal of Financial Inspection, No.

178, pp.51-52.