Burden on Catfish

 It is necessary but too costly to apply international standards for sustainable development of aquaculture in parallel with awareness of environmental protection and responsibility toward social community. Since there is not general sectoral standard for aquaculture, each enterprise is applying many standards. On contrary, constant decrease or unpredictable fluctuations in the price have caused troubles to enterprises.

 

In November, the World Wild Fund for Nature (WWF) awarded ASC certificate – which is a new standard in aquaculture to 6 Vietnamese enterprises. Given this certificate, they are certified that their catfish have minimized adverse environmental impacts, reduce negative influences on the health of the employees and communities living in neighborhood area. In the event of the success, officials of Ministry of Agriculture and Rural Development have committed that by 2015, there will be more than 50 percent of the aquaculture businesses meeting this standard.

 

Two years ago, it was not easy for catfish to meet ASC standard. At that time, Vietnam’s catfish was favored in large markets such as the United States and European countries. WWF made reportage with negative view point on Vietnam’s catfish and included it on “red list” for restricted consumption in aquaculture consumer manual in Germany, Belgium, Norway, Austria and Denmark. This meant Vietnam’s catfish is subject to European consumers’ boycott. There were fierce debates between Vietnam and WF at that time, which was finally calmed down when Vietnam accepted WWF’s ASC standard in return for its exclusion in the “red list”. The win of WWF in forcing Vietnamese aquaculture enterprises to comply with ASC standard if they want to open door to European market raised the worries that any organization could set out a standard on catfish. Dr Nguyen Huu Dung, Vice President of Vietnam Association of Seafood Export and Processing, said that there are many standard systems in Vietnam certifying fishery quality which were founded by NGOs such as BAP, GlobalGAP, MSC, MetroGAP, ASC, IFORM, SQF etc. In addition, some retailers and importers have their own standards and regulations, requiring growing units and exporters to follow them and be given certificates for good import. Notably, these sets of standards all base on the manual for sustainable raising fishery by Food and Agriculture Organization of the United Nations (FAO) with four basic principles of: food hygiene, animal health and welfare, eco-environmental protection and social responsibility. Each of these standard set has based on one of those four elements to develop their own certification system. This has results in many overlapped procedures and waste of money for enterprises. However, incompliance with those standards will shut the door to the market in developed countries.

 

Director General Duong Ngoc Minh, Hung Vuong Fishery Company (HCMC) – one of 6 businesses given ASC certificate admitted that adoption of international standards, engagement between sustainable development of aquaculture sector and awareness of environmental protection and responsibilities toward social community is necessary but too costly. For example, the cost for developing procedures that meet ASC standard is around US$100,000, not mention approximately US$12,000 for annual renewal. Beside, his enterprise is also applying GlobalGAP standard which is the passport to European market, which costs about US$6,000 for annual issuance, plus a rather large amount to build up procedure.

 

 “Each business will apply standards as required by its specific market, eg: Europe requires GlobalGAP; the US requires GAA while domestic consumption requires VietGAP. Since there is no general standard for aquaculture, each enterprise is applying 5-6 ones and possibly the number will increase. This has caused confusion for businesses and create burden of high costs to invest into these standards”, said Mr Minh.

 

Given the large number of quality standards giving burden to catfish sector, plus efforts and amount of money spent, the businesses should have sold products at higher price. However, the price of catfish has constantly decreased or fluctuated unpredictably. The reason is due to lack of linkage, many enterprises have just sought their own benefits and been willing to undersold products. The result is very obvious, the importers are benefited while the exporters are enforced by anti-dumping law. Besides, to reduce the price, many businesses have decreased the quality without hesitance, causing loss of consumers’ trust and application of more and more technical barriers in European countries and the US.

 

Lack of sustainability in catfish sector’s growth also originates from overheated development. Particularly, there are only 50 processing plants of catfish in the Mekong Delta whereas the number of exporters comes up to about 400. Only those with processing plants and raising area have paid due attention to and been concerned about product quality while the commercial companies mostly focus on profits. It leads to competition for input materials and rockets the buying price as well as allows exporters to give out their own price, enabling importers to set their favorable price.

There are only 50 processing plants of catfish in Mekong Delta whereas the number of exporters comes up to about 400.

Mr Truong Dinh Hoe, General Secretary of VASEP said that another obstacle for catfish sector is enterprises haven’t handles their shortage of fund yet. At present, there is about 90 percent of the fishery businesses having urgent needs of bank loans ranging from VND10 billion to VND500 billion to rehabilitate their business and export activities. If the fund is available, they can maintain production and invest more in materials. However, the fund source from banks is still tightened while input prices keep increasing (costs for feed, breeders, environmental protection etc). In addition, there are signs that due to limited financial capacity, some businesses have had to accept to sell products at lower price to recall capital and pay debt, which potentially involves in low quality products. Despite an increase of 2.4 percent in export value in Quarter III (more than US$ 438 million) over Quarter II, the value comparison year by year against 2011 shows a decline of 10 percent, which made it possible not to beat the target of export value over US$1.8 billion this year.