Decision No. 311/QD-TTg dated March 20, 2003 of the Prime Minister approving the scheme on continuing to organize domestic markets and concentrating on the development of rural trade till 2010

DECISION

APPROVING THE SCHEME ON CONTINUING TO ORGANIZE DOMESTIC MARKETS AND CONCENTRATING ON THE DEVELOPMENT OF RURAL TRADE TILL 2010

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of December 25, 2001;

At the proposal of the Minister of Trade,

DECIDES:

Article 1.- To approve the scheme on continuing to organize domestic markets and concentrating on the development of rural trade till 2010, with the following main contents:

I. Objectives and tasks of developing domestic markets till 2010

1. Overall objectives and tasks:

To arrange and expand the domestic markets in association with overseas markets, ensuring smooth circulation of goods and better satisfying production and daily-life demands; to accelerate the consumption of goods, especially farm produce, thus boosting production and export; to bring into full play the positive role of advanced trade models as well as assorted forms of traders of all economic sectors; to create a healthy, safe and favorable business environment, thus contributing to the implementation of the roadmap for integration into the region and the world, boosting socio-economic growth, serving the cause of industrialization and modernization as well as the development of socialist-oriented market economy.

2. Specific objectives and tasks:

a) To maintain the annual growth rate of total goods and service retails at 11-14% in the 2001-2005 period and 14-15% in the 2005-2010 period; to strive to increase by over three fold in absolute figure the current average annual per-capita goods and service retails in rural areas by 2010 and turn out many goods of high competitiveness on domestic and overseas markets.

b) The consumption price index to increase by around 5%/year, to step by step check the growth rate of proportion of industrial products and services to farm produce.

c) To formulate a synchronous system of market development mechanisms and policies and create favorable legal environment to encourage organizations and individuals to take part in business activities; to expand the business network of traders of all economic sectors with traders of the State sector playing the key role and piloting market through two basic norms: wholesale market share and import/export ratio of key goods items; to renovate the organization and operation of traders of collective sector, encourage the development and guide the management of traders of private sector; to formulate and develop circulation channels along the direction of linking circulation with production, so as to bring goods to consumers with lowest costs; and to have many traders having high competitiveness on the domestic and overseas markets.

d) To consolidate and develop the system of infrastructure and technical-material foundations in service of trade along the direction of organizing and exploiting marketplace systems in an effective manner; to boost the development pivotal marketplaces, specialized marketplaces, goods-transaction floors and farm produce-reserve and -preservation warehouses for these establishments to become most reliable places for goods transaction and consumption, and supply of materials and goods for production and daily-life demands; to develop department stores, trade centers and various organizational forms of e-commerce, primarily in cities, towns and concentrated economic zones; to build and raise operation quality of the system of market information and trade promotion in the country.

e) To enhance market order and disciplines; to prevent smuggling, trade frauds, as well as production of and trading in fake goods and poor-quality goods; to protect the legitimate interests of producers, enterprises and consumers.

f) To continue amending, supplementing, perfecting and synchronizing the system of legislation and policies on trade development; to renovate the organizational apparatus, personnel, modes, facilities and operational mechanisms of the system of State management over trade in general and domestic markets in particular.

To strive to continuously develop trade and markets along the direction of equality, democracy, modernity and sustainability; to prepare best socio-economic conditions for the domestic markets to meet the requirements of the process of integration into regional and international markets.

II. Orientations for reorganization of domestic markets till 2010

1. To formulate and develop stable goods-circulation channels so as to put goods into circulation as soon as possible with lowest costs.

For the circulation of farm produce, to ensure that almost all products turned out in rural areas are consumed through contracts between producers and enterprises, producers and cooperatives, or cooperatives and enterprises. For the circulation of supplies and goods in service of production and daily-life demands in rural areas, apart from complying with the above-mentioned consumption and exchange contracts, to encourage and create favorable conditions for the setting up of a network of enterprises, cooperatives and agents.

To strive for the target that by 2010, the sale, purchase and consumption of commodity products are basically effected by mode of contractual sale/purchase; to renovate the organization and operation of cooperatives and networks of sale/purchase agents, to develop the system of marketplaces of assorted forms and grades so as to formulate rational goods-circulation channels linking agriculture with industry, rural areas with urban centers, and domestic markets with overseas markets.

2. To formulate and develop trade models suitable to characteristics, conditions, and demands regarding the capacity of each market grade.

a) The trade model of national market: To combine the operation of small- and medium-sized enterprises with the formulation and development of conglomerates, corporations, firms and "parent" companies, engaged in various business lines or specialized in certain goods items or group of goods items in the trade field (both domestic circulation and import/export) with a system of distribution-consumption network throughout the country; and to link production with processing, goods reserve with circulation.

b) Beside the formulation of the model specified in Item a:

- In urban markets: To pay attention to the development of department stores in association with trade centers, goods-transaction floors, pivotal marketplaces and organizational forms of e-commerce of medium size.

- In rural markets: It is important to form a consumption network consisting mainly of shops, and sale/purchase spots so as to create smooth trade activities in localities, regions and the whole country.

To continue renewing the organization and operation of cooperatives along the direction of transforming them into joint-stock cooperatives so as to rally private traders (business individuals and households), and making rural service cooperatives enterprises’ satellite networks acting as sale/purchase agents (consuming farm produce and supplying materials as well as consumer industrial articles).

III. Solutions to concentrating on development of rural trade till 2010, first of all in the 2003-2005 period

1. To apply specific measures regarding both institution formulation and economic measures suitable to each region or geographical area as well as consumption particulars of local people so as to raise the capacity and role of supplying and consuming (ensuring) materials and goods of marketplaces, goods sale and/purchase centers in townships, towns and commune clusters, sale/purchase spots and goods sale/purchase agents along the direction of linking production with consumption; to consume products turned out by peasants and supply materials and goods in service of production and daily-life activities of people, first of all, people living in rural areas, in the most convenient, quickest and most effective manner, regulating the operation of the network for farm produce consumption and materials and goods supply for daily-life consumption in rural areas, creating posture of initiative and stabilizing the markets.

2. To renew the organization and operation of service-trade cooperatives along the direction of organizing sale-purchase cooperatives in rural areas in the form of joint-stock cooperatives in order to provide two-way services to economic households by mode of sale/purchase agency and two-way contracts with one party being peasants (or their representatives being groups of households) and the other party being enterprises; and at the same time to renew the capital contribution mechanism, management mechanism, labor employment mechanism and distribution mechanism of cooperatives to suit the market mechanism.

To apply appropriate policies in order to encourage traders of private sector (business individuals and households), together with cooperatives, to become networks of major consumption agents and key partners of enterprises in signing and performing contracts on consumption of farm produce and supply of materials and consumer goods for peasants.

3. To continue developing the mode of agency so that agents actually become extended arms of enterprises in purchasing farm produce from, and selling materials and consumer goods to, peasants. To formulate enterprises’ agent networks on the basis of goods-circulation demands, suitable to local characteristics and conditions. The main force of the agent networks are cooperatives, individuals and business households, people engaged in shipment trading and contractors undertaking entrusted sale and purchase for enterprises.

To improve the Regulation on sale and purchase agency which shall serve as basis for the signing and performance of agency contracts according to law provisions. To implement the policies on credit, commission and insurance… support as well as technical support for both parties to agency contracts.

4. To associate the consumption of farm produce with the supply of materials and consumer goods through the signing and performance of contracts. The contracts on consumption of farm produce and supply of materials and goods must actually become the bridge between enterprises and peasants, closely and stably linking production with circulation.

First of all, it is necessary to base on the planning on development of production in localities and regions, especially regions specialized in production and processing of farm produce for export, regions producing raw materials for processing industries (paddy, sugarcanes, vegetables, fruits, coffee, pepper, cashew nut, maize, peanut, cotton, tea, cattle and poultry, paper raw materials and raw materials for production of handicraft and fine art articles) to boost the signing of contracts on consumption of farm produce and supply of materials and goods. On the one hand, it is necessary to apply and implement investment support policies (land, seeds, fertilizers, feeds, technical equipment, technologies, infrastructure, professional training and fostering,…) for specialized cultivation regions; on the other hand, to flexibly and rationally apply the regulations on rewards according to the results of contract performance; on participation in the performance of Government’s contracts on farm produce export; on support for trade promotion, information provision, market approach, advance of capital, fertilizers, feeds and drugs, cultivation and husbandry techniques and technologies in order to support peasants in contract performance and harmonize the interests of involved parties in the performance of contracts and encourage enterprises and peasants to sign and strictly comply with contracts.

To concentrate directions so that the signing and performance of contracts on consumption of farm produce and supply of agricultural materials and consumer industrial articles with peasants are popular and become the most reliable basis for both parties: enterprises and peasant households or farm economic households (or their representatives being household groups) or via production groups or teams, agricultural farms, cooperatives or intermediate traders such as people engaged in shipment trading, contractors, …

The contracts on consumption of farm produce and supply of materials and goods must be formulated and perfected in term of both the legal contents and the economic contents so that they shall serve as grounds for enterprises to make investments in agricultural production and as basis for peasants to contribute capital, buy equities and join in ventures with enterprises or to become enterprises’ satellites, thereby creating foundations for the building and development of agricultural-industrial-commercial groups according to mixed-ownership regime, promoting the alliance between farmers and industrial processors as well as traders and unifying agricultural production with industrial production and goods circulation on rural market.

State enterprises must play key role through the realization of the State’s mechanisms and policies, ensuring peasants’ interests; at the same time enhance the education and in the awareness of peasants’ legal liability in the performance of their contractual obligations.

5. To develop the system of commercial infrastructure, mainly the network of marketplaces of assorted forms and grades. To immediately formulate the planning and development of the network of marketplaces of assorted forms and grades of each locality as well as of the whole country in strict accordance with the Government’s Decree No. 02/2003/ND-CP of January 14, 2003 on development and management of marketplaces in such forms as: the State’s investment in the construction of marketplaces and enterprises directly manage and exploit marketplaces through bidding; or the State’s investment support in terms of ground, technical infrastructure or investment capital while enterprises, individuals and business households jointly invest in the construction of marketplaces. In order to efficiently exploit marketplaces, the construction thereof must be integrated into other projects and programs on socio-economic development in the localities.

At the initial stage, investment should be concentrated on the following two forms of marketplaces:

- Marketplaces of communes and commune clusters as well as marketplaces of towns and townships where the wholesale purchase of farm produce starts and the wholesale of materials and consumer goods ends, contributing to expanding exchange relations, stimulating the development of commodity economy and serving production and daily-life activities of rural residents in the communes and districts.

- Pivotal marketplaces where the wholesale purchase of farm produce ends and the wholesale of supplies and consumer goods starts, contributing to the development of goods production and circulation in a region, an area encompassing many rural nearby districts and provinces (including border-gate marketplaces where goods are rallied for export and/or import via border).

At the same time, to step by step formulate and develop market information spots, goods-preservation warehouses and various organizational forms of e-commerce in service of the demands for goods production and circulation in rural areas, creating basis for the formulation and development of rural trade centers with pivotal marketplaces, goods-preservation warehouses and market information spots being the core.

6. To organize the system of market information from the Ministry of Trade to the provincial/municipal Trade Services and enterprises. To study in order to establish market information spots in specialized farming regions and rural markets on a regional basis (next to pivotal marketplaces), which have the main tasks of providing specific, practical and basic information on the situations of markets inside and outside the regions. To coordinate the operation of those market information spots with the operation of agricultural promotion organizations, clubs, societies, associations and enterprises so as to exert impacts on investment orientations and economic restructuring according to market demands and ensure farm produce’s competitiveness (fine designs, high quality and low prices).

7. To renew the organization and operation of the association of farm produce producers, processors and circulators in order to jointly grasp market demands, protect members’ interests, make insurance for risks and harmonize the interests of producers and traders on domestic and international markets. The association must become organization which support enterprises and peasants to raise their production and business capability as well as the quality and prestige of their goods; build up and protect trademarks of Vietnamese enterprises and goods on domestic and world markets.

8. To enhance the organization of exhibitions and trade fairs in order to propagate and introduce goods, connect contacts between customers and business partners and boost goods circulation and rural market development. To guide and educate in consumption while stimulating demand growth as well as caring and protecting consumers’ interests.

9. To raise the efficacy and effectiveness of the State management over trade. To continue perfecting the functions, tasks, powers and responsibilities of agencies performing the State management over trade at all levels, especially in localities. To boost the training and fostering in order to raise qualifications and capabilities of officials of different kinds in parallel with renewing the recruitment, employment and management of official of various levels.

The orientations for operation of provincial/municipal Trade Services should focus on the work of trade development planning, and organization of the realization of policies on goods circulation development and market expansion, market information provision and trade promotion. To step by step strengthen instruments, facilities and necessary material conditions which serve as an economic basis for the implementation of programs and projects on development of goods circulation and domestic markets, especially in rural areas, falling under the functions, tasks, powers and responsibilities of the system of State management over trade from central to local levels.

To enhance the work of market control both quantitatively and qualitatively, with attention being paid to the fight against smuggled goods, fake goods, poor-quality goods and goods failing to ensure sanitation and safety for consumers as well as ecological environment, especially in the rural areas. To guide and organize the implementation while inspecting the observance of provisions of trade legislation by traders. To enhance market order in parallel with raising trade civilization in the rural areas.

Article 2.- The Ministry of Trade shall assume the prime responsibility and coordinate with the ministries, branches and localities in concretizing the scheme into programs and projects with objectives, solutions and steps suitable to the practical situation and characteristics in the market so as to organize the implementation thereof, with a view to creating a breakthrough in goods circulation and domestic markets.

The Ministry of Trade shall specify the time and contents of reports on evaluation of implementation results of the scheme for the concerned agencies; synthesize, report and propose solutions to the Prime Minister for the implementation of the scheme with high efficiency.

Article 3.- This Decision takes effect 15 days after its signing.

Article 4.- The ministers, the heads of the ministerial-level agencies, the heads of agencies attached to the Government and the presidents of the provincial/municipal People’s Committees shall have to implement this Decision.