The beneficiaries will include individuals and households who have been granted land and water areas for agricultural, forestry, aqua culture, seafood and salt production by the State, according to Nguyen Duc Thang, Deputy Director of Department for Enterprise and Finance Affairs under the ministry of Finance.

According to the Ministry of Agriculture and Rural Development (MARD) production costs are increasing all the time due to rising prices for seeds, equipment, veterinary services, fertilisers and pesticides and damage caused by droughts, floods, animal diseases and epidemics. Moreover, the land available for agriculture is decreasing due to rapidly expanding urbanisation and industrialisation. Meanwhile, farmers still have to pay for construction, maintenance and repairs of electricity lines, water pipes, roads, schools and clinics.

Currently irrigation fees account for 7-10 per cent of production. With this and the cost of other inputs, farmers clearly have major difficulties in earning sufficient income from their labour. Therefore the aim of the reduction is to lower their expenses and make agriculture more profitable.

It is estimated that the total irrigation fees for the country cost the farmers VND2,700 billion a year, which the State will now partially cover. Following the draft publication and implementation, irrigation companies will be duty-bound to provide water to farmers as a public service but because the government will cover the reduction balance the companies will not be at a loss. "When applying the reduction of irrigation fees, companies will not have to worry about debts," said Thang. Therefore they can concentrate their resources on repairing the irrigation system which they couldn’t do before because of a lack of capital .

In addition, the State will continue to assist with 50-60 per cent of the present fees to ameliorate waterlogging and drought. Grant-aid for waterlogging in 2004 was VND99.3 billion and VND143.8 billion for drought in 2005, at the start of 2007 it was VND95 billion for the latter. By the end of 2006, the irrigation system was used for 6.85million ha of rice, 1.71 million ha of agricultural land and was also a water resource for day-to-day household activities and industrial production, according to Le Duc Nam, the Deputy Director of the Irrigation Department under the MARD.

In 1995, there were 13 irrigation plants watering 400,000ha, but due to the State investment and contributions by the people, the number has increased to 100 at present.