Vietnam should have specific policies to boost farm exports as the country has not yet made use of subsidization rights, as granted by the World Trade Organization (WTO), to support local agricultural production, specialists said at a recent conference in Hanoi.
The WTO allows its members to provide subsidies to their domestically-made agricultural products with a limit of 10% of their total value in a year, but Vietnam’s subsidy rate remains low at 3%.
Marketing and promotion programs have not yet been fully utilized, the Central Institute for Economic Research and Management (CIEM) said in a survey on Vietnam’s agricultural sector after four-year integration into the WTO.
The survey was release d at the conference, which was to analyze the impact of policies and market changes on agents in exporting rice and shrimp chains in Vietnam.
Nguyen Dinh Cung, deputy head of the CIEM, said the institute chose rice and shrimp for the study as they have been two of Vietnam’s top ten export items.
“The country has shifted from importing to exporting the items,” Cung said, adding that they had potential to become leading global export products by 2020.
In addition, he said the items had been active ranging from materials, processing to exports.
Nguyen Duc Nhat, director of the Development and Policies Research Centre (DEPOCEN), said findings of their survey showed that Vietnam had exported rice mostly to the Philippines, Indonesia, Malaysia, Cuba and African countries.
The country currently has over 300 shrimp exporters, with 60 accounting for over 80% of export turnover and other 120 possessing turnover of more than $1 million.
Nhat said Vietnam had exported products to 82 markets, with 80% of the amount and value focused on 10 leading markets including the U.S., Japan and South Korea.
“The items are prone to high risk, thus leading to lower prices than other countries, despite their quality,” he said.
“The risks were due to unprofessional business methods. They have not ensured that they meet their delivery schedules.”
Nhat also pointed out that limited land plots of three and five hectares in the Red River and Mekong Delta region respectively are too small to establish large scale rice cultivation areas which could reduce production costs and facilitate the application of technologies, breed management, harvesting and stock.
As for shrimp, he said integration policies into international economy have paved the way for an investment wave into aquaculture raising and processing in Vietnam since 2000.
“However, Vietnam has not introduced policies to limit or ban aquaculture harvesting during their reproductive seasons which could harm aquatic resources,” Nhat said.
Vietnam is expected to surpass Thailand in term of exported rice volume and become one of the world’s three largest shrimp exporting countries with three key import markets of Japan, the U.S. and the EU.
To reach the targets, the country should complete policies on land rental, land area limitations and credit, said Nguyen Van Dung from the Ministry of Agriculture and Rural Development's Economic Co-operation Department
Nhat said with an annual rice output of over 40 million tons, the development of policies to work with Cambodia would be an important point in establishing the biggest rice export chain in the ASEAN region and the world.
Tran Huu Cuong from the University of Agriculture said the policies should promote the effectiveness and equality of the entire production chains. “They should be divided into three groups of common, direct and indirect policies.”
Agriculture plays an important role in Vietnam’s economy and is the foundation for the sustainable development of society and economy, politics, security and national defense. It also creates jobs, income and raises residents’ living standards.
Production value of Vietnam’s agricultural, forestry and fisheries sector grew 4.7% from a year earlier to VND232.7 trillion in 2010, representing a modest ratio of 0.47% to the country’s gross domestic product growth. (Countryside Today)
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