Stepping Up Agricultural Restructuring

Giving explanation to the drop in Vietnam’s key exports like rice and coffee, the Ministry of Agriculture and Rural Development attributed it to exchange rate volatility; declining demand and increased technical barriers in major markets like the US, the EU and Japan; and growing inventories in many countries. An official from the ministry said the central task of the ministry is to enhance the operation of the Steering Committee for Agriculture Market in October and the fourth quarter of 2014.

 

Carrying out the Prime Minister’s Decision No. 899/QD-TTg dated June 10, 2013 approving the Project "Agricultural restructuring towards higher value and sustainable development," ministries, branches and localities have achieved certain results in maintaining and developing production and ensuring the growth of this sector.

However, a lot of problems have been exposed when the project is carried out. Many localities lack determination in carrying out the restructuring policy. Many even do not fully understand the project and its purposes and they are slow at research and transfer of technology.

 

Recently, on October 6, the Prime Minister also issued a directive with the aim of accelerating the carrying out of the agricultural restructuring project. The directive requires close cooperation in value chains from production to consumption, formed by farmers, cooperatives and businesses where businesses play a central role. Besides, the document guides and supports farmers to unite to form new-styled cooperatives, implements drastic measures to create a favourable environment to encourage enterprises to invest in agriculture, rural areas and join in value chains.

 

The Prime Minister requires building market research and information programmes to inform bilateral and multilateral trade commitments concerning agriculture, forestry and fishery Vietnam signed with foreign partners, disseminate opportunities and challenges to enterprises and farmers to sharpen their competitive edge, develop markets and protect domestic production.

 

In fact, Vietnamese agricultural products depend heavily on some markets such as China and Hong Kong. In the first eight months of 2015, rice export to China fell 2.64 percent in volume and 8.74 percent in value. Shipments to other markets dropped sharply in the eight-month period, including the Philippines (down 41.01 percent in volume and 44.69 percent in value), Singapore (down 37.24 percent in volume and 34 percent reduction in value), and Hong Kong (down 29.37 percent in volume and 35.36 percent in value). To address this issue, businesses are recommended to diversify export markets to reduce reliance on some markets as now. New potential markets include Côte d'Ivoire, Ghana, the United States and Malaysia.

 

In addition to seeking and expanding markets, the directive also provides other tasks like researching, transferring and applying scientific and technological progress, creating breakthroughs in agricultural restructuring, giving priority to high-tech applications, scientific solutions and advanced technologies, etc.

 

Localities are urged to carry out the agricultural restructuring project. If localities approve the project or programme, they should review and adjust contents and actions to match reality, objectives and tasks of socioeconomic development plan in the 2016 - 2020 period. In case they do not have or approve the project, program or action plan with respect to agricultural restructuring, the Prime Minister requested them to complete it in the fourth quarter of 2015.

 

Vietnam’s FTA negotiations with other partners are very optimistic. The recent conclusion of the Trans-Pacific Partnership (TPP) is believed to provide much more opportunities for Vietnam’s agricultural, forest and aquatic products to reach wider markets. Directive No. 26/CT-TTg will help localities and businesses to speed up agricultural restructuring to enhance added values and take advantage of every opportunity provided by FTAs.