Need to fundamentally renovate mechanism of land transfer for profit-making purposes

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Prof. Doctor of Science Dang Hung Vo

Completing the land market is considered one of the important requirements in innovation of the growth model. What do you think?

Since 2013, the overall scheme of economic restructuring associated with changing the growth model towards improving quality, efficiency and competitiveness in the period of 2013-2020 has been approved. Subsequently, the National Assembly and the Government continued to have resolutions related to this issue. In particular, one of the goals of the growth model transformation was identified as improving the efficiency of the economy's input resources including land, labor, finance and technology to economic development based on high productivity.

For the land use rights market, the reform policies provide three main contents. Firstly, to facilitate the operation of the land use right market, including the primary market between the State and those who are allocated or leased land by the State, and recognized land use rights by current use and secondary markets, including transactions of rights to use and assets attached to people when using land.

Secondly, special attention is paid to the legal framework for the market of agricultural land use rights to ensure land transfer to create high efficiency in land accumulation and concentration for large-scale agricultural economic development, high technology to create typical agricultural products of Vietnam with high competitiveness in the international market.

Third, complete planning tools, land use plans integrated with other types of planning to create high efficiency in identifying development scenarios with high efficiency and efficiency in the future.

Renewing the growth model is an urgent requirement in the current period for Vietnam's socio-economic development. In innovation of the growth model, the task of improving efficiency of management and land use is a focus. In this way, new land resources are best used for national development. Land is a resource that not only meets land use needs, but also increases financial resources through effective land capitalization mechanisms. Therefore, the current revision of the 2013 Land Law needs to have a dominant mindset that is land for renewing Vietnam's growth model.

In your opinion, with the land market in general, is there any mechanism to ensure effective land transfer?

To invest in development, we are forced to make land transition from less efficient land use to much more efficient land use. This is a very difficult task because there is a group of landless people and a land grab, which always leads to conflicts of interest with respect to land.

Vietnam has undergone four Land Laws and is currently in the process of amending the 2013 Land Law. So far, land transfer in Vietnam has been carried out in two extreme ways, or compulsory land transfer in the primary market of land use rights based on the State's land acquisition mechanism, or voluntary land transfer based on agreement between land users and people in need of land use to carry out investment projects based on market principles. The 2003 Land Law is more about applying voluntary land transfer, but the 2013 Land Law is primarily about operating the compulsory land transfer mechanism. Land Laws do not care about the mechanisms to share the reasonable benefits of the landowners for those who lose land. For forced land transfer, the negative consequence is the conflict of interest leading to a high level of complaints and grievances (accounting for 70% of the total number of complaints and grievances of people). On the contrary, thevoluntary land transfer reached a consensus so there was no conflict of interest, but the investor could never successfully negotiate with 100% of the current land users to have land for the investment project. This situation makes investors unwilling to implement the voluntary land transfer mechanism, always seeking to switch to the compulsory land transfer mechanism.

I think that the land law should have a fundamental innovation in the land transfer mechanism for profit-making purposes. Firstly, projects that need land for profit-making purposes must be Government approved based on an analysis of economic cost-benefit analysis associated with a benefit-sharing commitment, social impact assessment and environmental impact assessment. Secondly, creating a legal framework for community-based land transfer mechanism based on majority of compensation, support, and resettlement plans associated with the benefit sharing principle will be implemented. Land transfer can be applied not only complete transfer of land use rights but also the method of land lease and capital contribution with land use rights. Applying these two proposed innovations will bring into play all advantages and overcome all disadvantages of both voluntary and compulsory land transfers.

Currently, many businesses are in need of large areas of agricultural land for production and business, however, in reality there are many difficulties. What is your opinion about improving the market of agricultural land use rights for the development of large-scale agriculture?

The primary market for land use rights between the state and land users has been realized during the state's allocation of cooperatives' land to households and individuals. This process has been completed nationwide. According to the provisions of the land law from 2004 up to now, the State does not have the right to recover agricultural land from farmers' households to assign agricultural enterprises to implement investment projects. Thus, the primary market for agricultural land use rights currently does not exist. All land transfers in the agricultural sector are based on the secondary market for land use rights.

In the secondary market for land use rights in rural areas, nearly all land transactions are not officially registered and comply with administrative procedures for land management in accordance with the law. The main reason is that farmers think the transfer fee is quite high, while the value of agricultural land is very low, farmers also think that the procedures are too complicated. All procedures are carried out in the informal sector.

I think that the renovation of policies on perfecting the market of agricultural land use rights should focus on the following issues. First of all, it is necessary to have preferential policies on financial obligations as well as simplify administrative procedures on agricultural land transactions for rural areas in order to develop the formal market of land use rights. Regulating the informal market, thereby ensuring that farmers' land use rights transactions are not at risk and farmers protect their interests in land transactions, especially participating in new production relations in large-scale and high-tech agriculture.

In addition, research is needed to improve the primary market for land use rights between the State and land users in the direction that the State not only acquires land but also has rights that are more in line with market mechanisms such as land lease rights of households and individuals.

In addition, it is necessary to create a monitoring mechanism to ensure avoiding risks for farmers when participating in the production relationship with agricultural enterprises in various forms to create conditions for the development of large-scale and high-tech agricultural enterprises. In order to ensure effective monitoring, good governance should be applied in the management of the agricultural land use rights market based on the principles of openness and transparency, with the participation of people and accountability of agencies and organizations related to the interests of the people.

Thank you Sir!