Global Challenges for Agriculture
Climate change and increasing global food demand are becoming global challenges as the world population is expected to reach 9.7 billion by 2050 (according to UN Population Fund, 2023). Simultaneously, consumer trends have shifted notably post-pandemic: 73% of consumers are willing to pay more for products with traceable origins and sustainable production methods (According to FAO and Nielsen). To meet these challenges and demands, high-tech agriculture (AgriTech) is becoming an attractive global investment trend. According to the latest report from Research and Markets (2024), the global AgriTech market reached $24.19 billion in 2023 and is expected to grow at a CAGR of 14.38% during 2024-2029. McKinsey (2023) estimates that applying technology in agriculture could generate economic value of $465-500 billion by 2030 through increased productivity and reduced resource waste.
Global Investment in AgriTech and Successful Models
North America currently leads in the number of high-tech startups, with the United States being the market with the most AgriTech startups, owning nearly 4,000 startups (AgTech Breakthrough, 2023). The Asia-Pacific region, led by China, holds 20% market share and is growing the fastest (Markets & Markets, 2023). Notably, Israel and the Netherlands have emerged as leading AgriTech innovation centers, particularly in greenhouse technology and urban agriculture.
A prime example of AgriTech success is BrightFarms in the US, which successfully raised $100 million in Series D funding in 2020. With its smart greenhouse model applying hydroponic technology, BrightFarms has supplied fresh vegetables to over 2,000 supermarkets and achieved good ROI after 3 years of operation. Plenty (US) reached a $1 billion valuation thanks to vertical farming technology combined with AI, helping increase productivity by 350 times compared to traditional farming and saving 90% of water usage. Major investors like Temasek Holdings, Tiger Global Management, and Tencent are actively investing in AgriTech, with total investment from leading investors exceeding $7.5 billion. The AgriTech industry currently has over 153,600 companies, created over 600,000 new jobs in 2023, and owns more than 52,800 patents.
High-tech Agriculture in Vietnam: Policies and Achievements
In Vietnam, investment and development trends in high-tech agriculture are increasing. According to the Ministry of Agriculture and Rural Development, by 2023, the country has 6 national high-tech agricultural zones (Hau Giang, Phu Yen, Bac Lieu, Thai Nguyen, Quang Ninh, and the North Central Forestry High-tech Application Zone), and 18 high-tech agricultural areas with a total area of 18,089 hectares. High-tech agriculture helps farmers become more autonomous in production, overcome seasonal limitations, reduce climate change risks, and decrease weather dependence. The government has also issued many preferential policies through Decree 57/2018/NĐ-CP on mechanisms and policies to encourage enterprises to invest in agriculture, including corporate income tax exemption for the first 4 years, 50% tax reduction for the next 9 years, and land rent exemption for 15 years.
Key Policies on High-tech Agriculture in Vietnam
Since the High Technology Law was enacted in 2008, Vietnam has built a comprehensive legal framework to promote high-tech agricultural development:
[1] In 2012, the High-tech Agriculture Development Program (Decision 1895/QD-TTg) laid the foundation for long-term development strategy until 2020.
[2] In 2014, the Government issued a List of Priority High Technologies for Investment and Development (Decision 66/2014/QD-TTg), providing clear direction for investors.
[3] In 2015, the Master Plan for High-tech Agricultural Zones and Areas (Decision 575/QD-TTg) mapped out the development roadmap until 2030.
[4] In 2017, the Ministry of Agriculture and Rural Development issued high-tech agriculture criteria (Decision 738/QD-BNN-KHCN), setting standards for industry development.
[5] Notably, Decree 57/2018/ND-CP introduced attractive incentive policies for enterprises investing in agriculture, including corporate income tax exemption for the first 4 years, 50% tax reduction for the next 9 years, and land rent exemption for 15 years.
These policies have encouraged enterprises and cooperatives to apply high technology in production, helping create pioneering models in fields such as cultivation, animal husbandry, and aquaculture. High-tech agriculture not only helps farmers become more autonomous in production and overcome seasonality but also reduces risks from climate change and decreases weather dependence.
The Strategy for Sustainable Agriculture and Rural Development 2021-2030, with a vision to 2050, continues to prioritize high-tech agricultural development as a key focus, aiming to build a smart, modern, and sustainable agriculture sector. This demonstrates Vietnam's determination to promote high-tech applications in agricultural production, contributing to improving productivity, quality, and competitiveness of Vietnamese agricultural products in the international market.
Key Development Areas and Notable Models
Potential investment models in Vietnam have been developing recently, notably the Smart Farm model. This model applies information technology and artificial intelligence to agricultural management and planning through the integration of IoT devices, sensor systems, and automation. Through data analysis, Smart Farms help optimize production processes, improve efficiency, and minimize resource waste.
In cultivation, smart greenhouse models have proven effective in increasing productivity by 300% and saving 70% of water usage. WinEco, with an investment of 2,000 billion VND over 3,000 hectares, applying Israeli and Japanese technology, has supplied 2,000 tons of agricultural products monthly mainly through nearly 2,500 WinMart/VinMart+ supermarkets and stores nationwide, providing clean, traceable raw materials for major urban areas. High-tech agriculture in Vietnam is showing impressive development across many sectors. In the fruit and vegetable industry, the agricultural market reached $1.5 billion in 2023, with steady growth of 15% annually.
In animal husbandry, smart models are being widely implemented with average investment scales of 15-20 billion VND per farm. TH True Milk is exemplary in applying Israeli technology to production, achieving a capacity of 500 million liters of milk annually. Additionally, the aquaculture sector is making significant progress in applying high technology. Investment cooperation trends have also developed strongly. Many major players have partnered with Vietnamese enterprises to invest in this sector: De Haus and Hung Nhon Group have implemented a 1,500 billion VND investment in high-tech agricultural zones. This development not only helps increase productivity but also meets Vietnamese consumers' demand for clean, safe food.
Towards Sustainable Development
The development of high-tech agriculture in Vietnam not only contributes to improving productivity and product quality but also aligns with global sustainable development trends. Modern production models help optimize resources, reduce greenhouse gas emissions, and limit chemical use. The application of high technology also helps Vietnam's agricultural sector adapt to climate change, ensuring long-term sustainable development.
Conclusion
Vietnam, as a developing country, maintains agriculture as a crucial sector in its economy. However, Vietnamese agricultural production faces many challenges: constantly increasing food demand, shrinking agricultural land area, requiring improved agricultural labor productivity to meet food security requirements and increasingly high agricultural product quality. With an increasingly complete legal framework, investment attention from both domestic and foreign enterprises, along with growing consumer demand for high-quality agricultural products, Vietnam's high-tech agricultural sector has great development potential. Close coordination between the government, enterprises, and farmers in promoting technology application, human resource training, and building sustainable value chains is the decisive factor in enhancing Vietnam's agricultural position in the international market while ensuring long-term sustainable development goals.
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