Successful Public-Private Partnership in Domestic Seafood Supply Chain

Vietnam has the world's second highest number of industrial-scale seafood processing plants meeting the strict exporting standards of the EU bloc (447/567 NM). However in its own domestic market of over 87 million people, Vietnam’s seafood products are still struggling with the challenges of food safety. Seafood contained borax, antibiotics, chemical substance as a result of the process of preservation and transportation is currently a serious threat to the people’s health, a major shortcoming which increasingly concerns the people.

 

A domestic supply of seafood which is produced in a sustainable method up to international standards is a matter of urgency; however, it’s not a simple task when all stages in the supply chain still have the tendency of working by its own rules. Especially farmers, an important link in the chain, are not used to be constrained by strict regulations.

 

Therefore, the launching of Metro VN project has required collaboration work from many sides. The MARD has been responsible for the construction of Metro Requirements Standard, seeking aquaculture farmers through local authorities and get them involved in the project, organising training courses. Fresh Studio Company (FS, Netherlands) has provided advisory service, helping selecting farms and seafood businesses to develop the network, then training and evaluating farms based on the Metro Requirements Standard; training seafood businesses on location, processing, packing, origin-tracing and separating products, shipping conditions by Metro Requirements Standard.

 

The Vietnam Challenge Fund (VFC) has partially funded the project after it had produced a certain level of results. Cargill Vietnam Company, specialising in fishery’s feeding, has provided a list of farms, giving technical advice on fish nutrition as well as organising training sessions for farmers.

 

In 2011, about 300 farmers and 50 traders received Metro Requirements Standard training in seafood at the cities of Can Tho, An Giang, Dong Thap, Vinh Long, Soc Trang, not to mention small training sessions conducted for farmers in remote areas. Then 120 farmers and 20 traders continued to register adopting Metro Requirements Standard, receiving additional consultation and training from the FS’s staff in farming practices. After 3-5 months of applying, there were 48 households, farms and traders given Metro Requirements Standard certification and area code. Also, Metro VN has constructed Metro Seafood Transit Station in Can Tho in accordance with HACCP and food safety standards.

 

According to Mr Le Van Canh, Manager of Fishery Purchasing of Metro VN, up to mid-2013, there were more than 70 farmers involved in the Metro Requirements process, deploying GlobalGAP of nine aquatic animals including eel, frog, tilapia, Siamese gourami, pomfret and red tilapia. Daily, the station purchases about 5.2 - 5.5 tonnes of finished and semi-processed products of over 83 kinds of seafood, of which 30 - 35 percent is products with raw material from Metro Requirements, the remaining is from farms involved in Metro Requirements Process and from fishing activities.

 

In addition to the FS Company’s consultation, the local management department of agriculture and fishery quality also provides on-location supervision of regular and irregular fishery, quality checking at the input station using sensors and periodically tested for urea, borax to ensure food safety. Those who fail the tests will be banned from purchasing until they can prove that their products are qualified and be put under more frequent and strict monitoring of the FS Company.

 

As for seafood, Metro VN has closely collaborated with farms participating in Metro Requirements in all procedures from purchasing to storage, transportation. The Metro Can Tho Station purchases about 75 - 80 percent of seafood produced by farmers in the supply chain, except for frog and snakehead fish 100 percent. It’s noted that contrary with the farmers’ concerns before that participating in a supply chain would increase the cost, the reality has showed that thanks to Metro Requirements, the work of management, care, veterinary treatment have become more efficient, which in turn help reducing the costs significantly. For example, the cost of raising red tilapia of fisherman Le Ngoc Quy, Bui Huu Nghia Ward, Binh Thuy District, Can Tho City when applying Metro Requirements declined to VND21,500/kg from the VND29,000/kg before.

 

To ensure a long-term and sustainable cooperation, Metro VN is working on an aquaculture plan for 2014, sending to the FS Company so that the company can work with farmers to decide on which aquatic animals that best meet domestic demands. Farmers still can raise a larger amount to sell outside the chain. Answering about the purchase price, Mr Le Van Canh said that Metro VN offered a reasonable price by calculating the cost in every stages of the supply chain, also based on market price and discussion with farmers. Farmers can decide to sell outside the supply chain if the price offered is higher than of Metro VN but being part of the supply chain will ensure farmers a stable income, free of concerns about price pressure from private buyers when market is oversupply. This can be seen clearly in the current seabass market, especially the case of Farmer Hua Trung Viet, Lich Hoi Thuong Commune, Tran De District, Soc Trang Province, who has recently sold fresh seabass to Metro VN with a price higher than that offered by private buyers about VND5000-6000/kg, despite the current oversupply.