Japan Supports Vietnam to Form Agricultural Value Chains

So far, Vietnam has been making a great effort to expand agricultural production. Typical activities include improving seeds, building irrigation works, paying crop supports and recently applying VietGAP standards to enhance safety of agricultural products.

 

As a result, rice, coffee and pepper have become highly competitive exports, ranked first or second in the world by volume. Regarding fisheries, such products as shrimp and catfish are also exported to the world. Typical cuisines in other countries such as fish and chips in the UK and fish burgers in the US also use Vietnam's seafood. Besides, in November 2015, Vietnamese mango started to be exported to Japan, a favourable step to sell the fruit in other countries.

 

I personally believe that the domestic production sector with the quickest reaction to market mechanisms and greatest success will be agricultural export. However, many issues and challenges still need to be addressed.

 

The first is safety. As I am living in Hanoi, my aspiration is to have safe vegetables to eat. The next is the low degree of processing; over 90 per cent of products are consumed unprocessed without creating higher added value. People’s incomes increasing and busy daily life will result in a high demand for processed products.

 

 

Post-harvest processing is incomplete. For example, without cold storage facilities, products are damaged when they are reach the market. Without classification, prices of good products and bad products are alike, resulting in the gradual loss of producers’ consciousness in improving produce quality.

 

Because of doubts about safety, organic vegetables cannot be sold at higher prices for their better quality.

 

Consumption is complicated. For example, merchants buy farm produce and the money after covering costs is paid a few days after the purchase; therefore, farmers cannot estimate their profitability and they feel hesitant to invest further in production.

 

Although the goal is to export, the high input costs of fertiliser and soil mean competitiveness is low. The contents above are only a few examples among myriad other issues.

 

I assumed my work in Vietnam in June 2013. I felt particularly pleased when Vietnamese leaders suggested to me that the two countries cooperate in the agricultural sector because of the importance of agriculture in medium and long-term vision.

 

JICA has collaborated with the Ministry of Agriculture and Rural Development and local governments such as Ha Nam, Nghe An and Lam Dong and private partners to carry out activities in the framework of medium and long-term vision.

 

Production capacity and added value enhancement model is a technical cooperation project on agricultural development planning in Nghe An province. In the framework of cooperation, the “contract-based agriculture production” model was tested with necessary activities to carry out agricultural value chains, including agricultural production, livestock husbandry, seeding and seed development, cultivation, harvest, transport, processing and export, with the starting point based on market needs. Or in other words, it is to find out what people want to buy.

 

In addition, the project also created an information sharing and exchange platform in order to share and provide information on agricultural produce and livestock markets, and on producers. Production establishments were chosen out of 400 agricultural enterprises and cooperatives in Nghe An. In addition, it is important to find investing and order-placing businesses, particularly foreign investors, if possible. Based on this result, the Master Plan and Action Plan for agricultural development in Nghe An will be established with a high possibility of reality.

 

In Lam Dong province, JICA has cooperated with the Provincial People’s Committee and the Vietnam Academy of Social Sciences to conduct the project “Lam Dong agricultural model construction support towards a multidisciplinary approach and agricultural investment environment improvement.” From September 2014 to November 2015, JICA conducted surveys to gather and analyse basic information on agricultural resources, including infrastructure, human resources, natural conditions, and regulations, and interviewed Vietnamese and Japanese businesses, potential investors, government officials and farmers. Surveys clarified potential and hindering factors and identified agricultural business development models in Lam Dong to optimise initiatives of the private sector - an indispensable element in agricultural production.

 

JICA intends to apply the high-tech agricultural model in Ha Nam province. We are currently performing surveys to collect information on information communication and technology (ICT) application in agriculture and are now testing the capacity of using ICT in closed management process from cultivation planning and cultivation to marketing to commercialise agriculture in Vietnam. Surveys aimed to enhance added values (safeness and freshness) of crops. The project is carried out by AEON Agriculture Company of Japan.

 

Market surveys, carried out with the inclusive support of the Vietnam Women's Union, the use of MARCH application developed by FUJITSU, have begun to explore price trends of vegetables in local markets. In the medium term, this information is expected to connect with demand forecasting models.

 

The biggest obstacle to foreign companies is hard access to land resources and difficult searching of contract-abiding business partners. Like Vietnamese enterprises, Japanese companies also lack personnel training opportunities, research and development and good infrastructure.

 

As stated earlier, these contents are key to promote cross-sector activities. Firstly, it is necessary to establish cross-sector responsibility mechanisms under the direction of provincial leaders. Two provinces established Project Management Units (PMU) with members from the Department of Agriculture and Rural Development, the Department of Planning and Investment, the Department of Industry and Trade, and the Department of Finance. PMU heads are vice chairpersons of the Provincial People’s Committee. Secondly, it is important to arrange budget and personnel to carry out action plans. Thirdly, the private sector cooperates right from the start as partners. Fourthly, provinces need to attract local and external investors to enhance techniques. It is believed that the coherence of relevant agencies of the two provinces will certainly be a model for other provinces to follow.