On 16 June 2025, the Vietnamese government issued Decree No. 156/2025/ND-CP, a significant update to the national credit policies for agricultural and rural development. Effective 1 July 2025, this new decree is designed to facilitate farmers in securing loans for transitioning to organic and circular farming models by reducing the risks associated with lending these loans for banks.

Key Policy Changes

The new decree amends and supplements Decree No. 55/2015/ND-CP, which was last revised in 2018. A key addition is Article 15a, which specifically introduces credit policies to support organic and circular agriculture. The main provisions include:

• Relaxed Collateral Requirements: For projects related to the production and trading of organic and circular farming products, credit institutions can now offer unsecured loans covering up to 70% of the project’s total value. This is a major change, as a lack of collateral has long been a significant barrier for farmers seeking to make these often-costly transitions. A single hectare of organic farming can require an investment of up to 300 million VND.
• Increased Loan Limits: The decree raises the maximum unsecured loan amounts for various entities:
  • Individuals and households: up to 300 million VND
  • Cooperative groups and business households: up to 500 million VND
  • Farm owners: up to 3 billion VND
  • Cooperatives and cooperative unions: up to 5 billion VND
• Financial Protections Against Risk: The decree provides new safeguards for farmers who encounter difficulties due to objective circumstances or force majeure events. These measures include:
  • Debt Restructuring: Banks can restructure the loan repayment period and provide new loans while keeping the original debt classification.
  • Debt Write-Off: With the Prime Minister’s approval, credit institutions can write off interest payments for up to three years, with the state budget covering the rescheduled interest.
  • Debt Forgiveness: If a farmer still can’t repay the debt after the above measures, the provincial People’s Committee can report the specific losses to the Prime Minister. Based on this report, the debt may be written off, and the state budget will compensate the credit institution for the loss.

Impact on Sustainable Agriculture

These policy reforms are a direct and powerful catalyst for the growth of sustainable agriculture in Viet Nam. By removing financial hurdles, the government is encouraging a shift towards farming practices that directly benefit the environment and local communities.

This transition contributes significantly to climate and biodiversity protection in several ways:

• Organic Farming: By moving away from synthetic pesticides and fertilizers, organic farming reduces greenhouse gas emissions and minimizes harm to local ecosystems. Instead, it promotes natural solutions like using beneficial insects to control pests and leveraging microorganisms to enhance soil quality.
• Circular Agriculture: This model further strengthens sustainability by prioritising resource and energy efficiency. It promotes recycling within the agricultural system, for example, by composting animal manure to fertilize crops, thereby closing the nutrient loop and reducing the need for external, often synthetic, inputs.

In essence, this new decree is not only expected to provide financial stability for farmers but also promotes agricultural practices that are both economically viable and environmentally responsible.