FTAs: Opportunities for Agricultural Production

 

However, according to experts, Vietnamese agriculture is still tied up with weaknesses in processing, exporting mainly unprocessed products without trademarks and through several intermediaries. Furthermore, Vietnamese agricultural products are 15-50 percent less in value in comparison with other countries and fail to compete in world market, especially in up-markets.

 

Although rice export is leading in the world in quantity, the real value is lower than other countries in the region, for instance 3-5 percent lower than Thai rice. Tea production is 5^th in quantity but 10^th in price. Tra fish accounted for 90 percent of world market share but 20-30 percent lower in price.

 

Explaining on this situation, Ms Ly Kim Chi, President of Ho Chi Minh City Foods and Foodstuff Association, pointed out that Vietnamese agricultural products failed to compete even in ASEAN market. Rice suffered losses in harvest, processing and selling. While other products are in the same situation: fruit and vegetable, sea and aqua products 20-25 percent less in value, and salt 15 percent. It increased production cost, while reducing quality and price.

 

According to Mr Vo Thanh Do, Deputy Director, Department of Agriculture-Forestry-Fisheries Processing, Ministry of Agriculture and Rural Development (MARD), with national targets approved by the government on upgrading competitiveness and value of Vietnamese agricultural products, MARD has issued Decision 1003 on increasing added-value in processing of agricultural-forestry-fisheries products and reducing loss in harvest, ensuring the increase of 20 percent and decrease of 50 percent respectively in 2020.

 

Besides, solutions must be upgraded in management and production, linking production of raw materials with processing and consumption, transforming product structure, increasing added-value, food safety while reducing production cost and losses in agriculture.

 

Mr Vo Thanh Do also emphasized on the use of side-products which are often ignored by farmers and businesses. It will help diversify products, reduce cost of main products and increase added-value in production value chain. For instances, with advanced technology, rice bran and husk can be processed into cooking oil, animal feed, firewood; rice-straw can be used for producing mushroom and organic fertilizer. Side-products are also important in other sectors: 0.7-0.8 tonne/tonne of frozen products, 0.5-0.8 tonne/tonne of dried products, 0.2 tonne/tonne of fish meal, etc. Therefore, the State should invest more in modern technology increasing added-value in food and non-food sectors such as Collagen, Glucosamin, calcium, fish meal, fish oil, Mr Do added.

 

Mr Bui Huy Son, Director of Trade Promotion Agency, Ministry of Industry and Trade, said that the quality of products is most important in market competition. Consumers’ liking as well as packages, maintenance and quality of products are highest consideration. Vietnam is in the process of pro-active integration, all enterprises and farmers share the responsibility to meet the demand of each market, especially when Vietnam will conclude many FTAs with ASEAN members and other countries by the end of 2015.

 

For his part, Mr Pham Minh Duc, WB economic expert, said that it is important for Vietnamese agriculture to have more high quality products and upgrade the processing to meet the demand of new markets with higher added-value and quality. Vietnam should change from exporting raw materials to processed products to get maximum profit.