Value Added to Vietnam Agricultural Products

 

Incentives for businesses who join public-private partnership in agriculture have been offered by the Government for a long time, but until now this area is not attractive enough to draw investment flows. Up to date, the private sector is contributing only 7.1 percent of the GDP in agriculture, forestry and fisheries.

 

Many said that there are many objective and subjective barriers that discourage investments in agricultural production.

 

Bui Thi Quy, Chairperson and CEO of Con Long My Phat Sugar Company, said that the Government is encouraging agricultural enterprises to improve the quantity and quality of products but not tailoring the mechanisms and policies for the consumption.

 

Therefore, the most difficulty of the sugar factories is the unstable market for products with supplies exceeding demands. Specifically, surplus of domestic sugar products causes large inventory, making enterprises be on the brink of bankruptcy while the government allows sugar imports. Even, domestic sugar companies are struggling to compete with smuggled sugar.

 

Capital is still a very difficult problem for businesses in agricultural sector though they are offered preferential loans. However, they found it difficult to access loans due to mortgages that are not accepted by shrimp raising properties. As reflected by many small and medium agricultural enterprises, the investment preferential policies for development of agriculture and rural areas are only for large enterprises and FDI enterprises while they are beyond ability of the small units such as cooperatives, ranchers and farmers.

 

Vietnamese agricultural products are low-value raw materials. Issues related to enhancement of competitiveness of Vietnamese agricultural products have been proposed many times but the strategies to develop exports and explore international markets for agricultural products of agricultural enterprises are not professional. This causes weak competitiveness of products and limitations of potential markets, thus threatening sustainability of export markets.

 

In fact, current agricultural exports of Vietnam remain in the form of raw materials and are expected to less demanding markets. Opportunities to access more demanding markets such as the EU, Japan, and Korea are less opened to Vietnamese enterprises.

 

To solve core problems, the government needs to pay more attention top-markets’ information. Not only farmers but also manufacturers do not understand market information. Businesses have not focused resources to explore markets; instead, they are searching for orders in short terms and too dependent on exports to neighboring countries. In facts, to reach out demanding markets, a successful manufacturer needs to pay more efforts to learn more about tastes of the customers to meet the needs of the market.

 

One of the important solutions to manage export is how the ministries, agencies and associations could forecast market and estimate market size in each year to help companies ensure supplies. However, the accuracy of forecasts has always been skeptical. The facts show that pepper had miraculous growth for nine months but this turned out to be consequence of inaccurate forecast; the number of the products such as coffee, cashew nuts, seafood, timber and wood products have increased but the number of other key products such as rice, rubber and tea rubber, tea have significantly decreased, compared to the same period last year. Incorrect forecast not only causes losses of enterprises but also negatively affect strength of strategic products of the country.

 

To accelerate agricultural economic development opportunities of the country with great agricultural advantages, the government should implement more practical policies to meet requirements of Vietnamese enterprises to increase their revenue and enrich the local economies.