“The Vietnamese agricultural sector is facing a lot of shortcomings like low prices of agricultural commodities like rice, coffee and seafood in bumper crops, farmers running for short-term benefits, etc. Investors also confront numerous difficulties when they invest in specialised farming zones and processing facilities,” experts at the Vietnam Agricultural Outlook Conference 2012 held in Hanoi by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) and the Vietnam Chamber of Commerce and Industry (VCCI). The Vietnamese agricultural market is forecast to face volatility in 2012.
Ms Nguyen Thi Xuan Thu, Deputy Minister of Agriculture and Rural Development, said: The Vietnam’s economy slowed down in 2011. The economy was dragged by uncertainties, high inflation, weak bank liquidity, trade deficit, and loss-making enterprises. The agricultural sector is still seen as the rescue of the entire economy as it generated tens of millions of jobs, raked in export turnover of US$25 billion, accounting for 22 percent of the country’s export earnings. This is the only sector with the net export surplus of US$9 billion. These achievements were highly appreciated at the World Economic Forum in Davos in January 2012.
Despite impressive achievements, the Vietnamese agricultural sector is facing major challenges like market fluctuations and soaring input prices.
Dr Pham Thi Thu Hang, VCCI General Secretary, said that the agricultural production value remains low. A lot of agricultural enterprises have low margin of profits. Thus, to sustain the development and increase the production value, the State needs to invest more in agricultural production, and seek timely measures to troubleshoot difficulties for farmers and enterprises to process and sell products. They are in need of capital for construction and potential market approaching methods.
Dr Nguyen Do Anh Tuan, Director of Agricultural Policy Advisory Centre (CAP) under IPSARD, said the market is uncertain in 2012. Several reasons like contracting demand in importing countries, new competitors and complex disease outbreaks require Vietnam to have prudential and flexible steps. He said that Vietnam needed to reorient the agricultural sector in order to raise the added value, strengthen public - private partnership, connect with global value chains and interlink with other economic sectors.
According to economic experts, to boost up productivity, quality and sustainability, the Vietnamese agricultural sector needs new policies to develop key products. Particularly rice and livestock serve vital roles in national food security and generate incomes for millions of people. Fishery and coffee sectors play vanguard roles in exporting agricultural, forest and aquatic products.
Ms Yuriko Shoji, FAO representative in Vietnam, suggested that Vietnam reserve land funds, supply sufficient water resource, and encourage organic farming in agricultural production.
According to the United Nations Food and Agriculture Organisation (FAO), at present, the grain price index is down 10 percent from the end of 2011. Thanks to favourable weather conditions, many countries in Europe, Asia and South America harvested bumper crops. Cereal production is forecast to reach 2.2 billion tonnes this year, the highest record ever. Rice in stockpile alone will amount to 1,147 million tonnes, virtually matching the record harvest in 2008. This is why many key export markets of Vietnam tend to contract the import demand and this will lead to lower prices of agricultural products on the world market.
Dr Dang Kim Son, Director of IPSARD, said: Vietnam needs to continue investing in rice production with long-term solutions like planning commercial rice cultivation, branding Vietnamese rice, upgrading food production, storage and processing infrastructures, and intensify research and select high-yield tolerant rice varieties.
Mr Phung Giang Hai, Deputy Director of IPSARD, said: The world’s seafood market tends to shrink since late 2011 and is projected to face daunting challenges in 2012. IPSARD anticipated that shrimp and pangasius prices of Vietnam in 2012 will equal to those in 2011. Cheap products will take advantage because global economies are still uncertain and consumers tighten spending.
According to IPSARD, Vietnamese seafood businesses necessarily renovate market approach, accelerate product branding, empower workforce, and expand distribution channels in order to sharpen competitiveness.
Hai Anh
Vietnamese
