Vietnam's Agriculture Sector not yet Fully Tapped

 

According to a report from the Trade and Services Department under the Ministry of Planning and Investment, export ratio of Vietnam’s farm produces was very promising in the first 11 months of this year. Export turnover of rice increased 15 per cent, seafood products up 11.9 per cent, coffee up 35.6 per cent, vegetables and fruits up 14.9 per cent compared to the same period of last year. Besides, Vietnam has raised farm produce exports to both regional and big foreign markets such as EU, Australia and Japan. Lots of local farm produces are sold at high prices.  Vietnam’s exported rice prices have increased equally to or higher than the level of Thai rice.

However, that is not a very positive sign for the country as this year’s market prices have suddenly risen. In addition, natural disasters and diseases have been attributed to the food shortage. Vietnam is forecast to export just around 4.5 million tons of rice this year, consecutively down from 5.2 million tons in 2005 and 4.65 million tons in 2006. Meanwhile, other commodities such as aquatic products, coffee, cashew nuts and crude oil have also in the same boat.

 

Another problem is that many localities and farm produce exporters are not been timely and clearly provided with update information about export regulations in international markets. At a recent meeting with experts from the European Chamber of Commerce in Vietnam (EuroCham), several food and foodstuff associations and exporters said they have very little information about import conditions in European markets in particular and other countries in general.

 

Meanwhile, an expert from Eurocham said “It is very necessary to establish a relation with a EU country as this will help Vietnamese products easily penetrate into other markets. For instance, France is a key gateway for Vietnamese goods to enter Germany.”

 

Furthermore, Vietnamese exporters should pay great attentions to environment-friendly standards that are tightly controlled in the EU market if not they will fail in this market.

The limited information is also a big barrier for Vietnamese exporters besides strict technical standards imposed by importers, which has narrowed export opportunities for Vietnam.

 

Experts, managers, importers and exporters said the same comment that Vietnam has made no new changes over the past year despite of the country’s WTO entry.

According to Dr Le Dang Doanh, a senior economist, this is resulted from operations of an agriculture sector with weak infrastructure and low technology. He said, while the urban area and export sector have gained remarkable improvements, the rural area has made very slow changes. “Agriculture process” and insurance of SPS foodstuff standards under WTO commitments remain limited. The event that 80 per cent of Vietnamese coffee was excluded from Lon Don and the country’s violation cases in farm produce safety and quality regulations warned by the US, Russia and Idia indicated a big gap between Vietnam’s farm produces and the world’s. Regarding food safety hygiene, Director of the Ho Chi Minh City Support and Consultancy Centre, Tu Minh Thien, said “Vietnam has not yet a built a complete regulation on food safety, therefore, exporters often meet difficulties due to strict technical standards of importers. On the contrary, this has also badly affected local farm produces’ self-protection ability in the competition with imported ones.

 

In addition, building and promoting local farm produces have not received due investments despite being much mentioned.

 

These disadvantages have not only made Vietnamese farm produces lose foothold in foreign countries but also in the domestic market. Currently, wheat, soybean and maize from the US and fruits from Thailand and China are flooding in Vietnamese market and are widely accepted by domestic consumers.

 

The Planning Department under the Ministry of Agriculture and Rural Development said, 42 countries and territories have invested in Vietnamese agriculture sector since the city became a WTO member, however, the investment has made up just 10.6 per cent and 6.5 per cent of the country’s total project number and value capital respectively during the period. The figures are quite modest compared to great potentials of the fast-growing economy of Vietnam. Moreover, the majority of investors are from Asia. Meanwhile, investors from countries with developed agriculture such as the US, Canada and Australia have not paid much attention to Vietnam. According to economists, Vietnam should focus on calling on foreign investment into agriculture sector, setting up export groups for each staple and boosting information dissemination to maintain sustainable development of agriculture.

 

According to Mr Thien, farmers should boost exports of high-quality products such as seedlings, milk cows, aquatic products, safety vegetables, crocodiles, ornamental fish and decorative plants and use modern post-harvest technology in transport, drying, preservation, semi-processing in order to sharpen local farm produces’ competitiveness.

Besides, a comprehensive regulation on technical requirements of importers should be quickly completed and popularised in the country to raise products’ self-protection with low competitiveness like fruits and meat.