New Policy Hinders Cashew Industry

   Circular No. 13/2011/TT-BNNPTNT guiding the inspection of food safety and commodities originated from imported plants has taken effect since July 1. According to the Cashew Association (Vinacas), this new Circular has delayed the customs clearance of about 400 containers of crude cashew. Many cashew importers have to pay much for warehousing and storage.

Obstacle from the new policy
Under the new standard of Circular 13/2011/TT-BNNPTNT, goods of Vietnam must meet three requirements: manufactured in the country admitted by authorised agencies of Vietnam for fully meeting the requirements for food and goods safety; packed or contained in the appropriate bags, labeled or sub-labeled in Vietnamese, tested and certified in food safety in accordance with regulations. Up to the present time, regarding to the contents of this new Circular, many businesses producing, processing and exporting cashew have spoken about their sufferings with the authorities.

At the meeting of Ministry of Industry and Trade, Mr Dang Hoang Giang, General Secretary of Vinacas has complained that the Circular has just been signed and issued by Minister of Agriculture and Rural Development and taken effect since early July. Meanwhile, to be active in raw materials for production from the earlier months, the businesses in cashew sector had to sign the import contracts of raw materials with partner countries. Another difficulty for the businesses producing and trading cashew is that the purchasing of raw materials is from West African or East African countries - the region with not many countries are not certified by ’s authorised agencies for fulfilling the requirements for food and goods safety. This is inconsistent with the provisions of the Ministry of Agriculture and Rural Development in the first requirement: “manufactured in the country admitted by authorised agencies of for fully meeting the requirements for food and goods safety.” Mr Giang asserted that the current processing capacity of all cashew sectors of the country is 800,000 tonnes of crude cashew per year while domestic raw materials can afford 300,000 tonnes, so the imports are unavoidable.

According to Mr Nguyen Thai Hoc - President of Vietnam Cashew Association: “The Association totally endorses the guideline of the National Assembly, the Government and the Ministry in the management, inspection and testing of food safety of imported goods. Yet, the Government and the authorities should also consider the fact that now the import contracts and shipments of crude cashew from West Africa, Indonesia, and Cambodia signed from the beginning of 2011 (before the promulgation of Circular 13) of the Vietnamese raw cashew importers has already arrived or on the way to the ports of Vietnam, and if they are not soon cleared, it is likely to cause congestion of ports and affect production schedules, and delivery to customers of businesses.

From this point of view, recently, Vietnam Cashew Association also has a written emergency request to the Minister of Agriculture and Rural Development for permission to extend the application of the new provisions of Circular 13/2011/TT -BNNPTNT for businesses to import raw cashew production for export of Vietnam to end on September30, 2011.

In addition, the Association also asked Ministers to consider taking the raw cashew from the group of required food safety inspections for goods originating from plants used as food imported into because raw cashews are only the raw materials for export production (cashew nut).

Moreover, to facilitate one of the key export items of Vietnam agricultural goods to have a competitive advantage, Vinacas also suggested reducing the import tax on raw cashew to 0 percent instead of 5 percent as it is now, and suggested the General Bureau of Customs to direct Customs Department for releasing the shipments of crude import contract signed before July 1, 2011 (in the form of clearance first and checking later) to avoid damage to the business.

Which solution?

Mr Nguyen Thanh Bien - Deputy Minister of Industry and Trade, said that due to the current situation of erratic fluctuations in the world as well as domestic economy, within 6 months from now to the end of this year, Parliament, Government and relevant ministries will have new policy to strictly control and regulate the macro economy. The case that Department of Agriculture and Rural Development issued Circular 13 is to implement the mandatory provisions of law relating to requirements for quality inspection and quarantine inspection. Previously, Circular 25 for animal quarantine, and this Circular 13 is plant quarantine.

In fact, it should also be noted that in some cases, the functional units of the ministries do not have ways to handle and draw experience from the application of the provisions relating to export and import procedures for raw materials to the production of goods.

Previously, for example, the textile industry has paid dearly in Circular 32 because the resolve was only found a few months after the release of the circular. Accordingly, Mr Bien also suggested that the authorities should work closely with the association to seek for solutions, and raw materials for domestic consumption should not be equated to raw materials for manufacturing export goods since this can cause severe damage as in the case of existing domestic cashew production business enterprises.

Anh Phuong