EVFTA Impact on Vietnam Animal Husbandry

 Built-in opportunity

 Like other sectors, joining EVFTA of new generation, animal husbandry can access new technology and advanced management of EU with modern industrialized animal husbandry. It can also attract new investors with high technology and sustainable value chain together with processing industry of high quality and high added value.

 

According to Mr Truc, for the time being, it is built-in opportunity forcing the sector to re-organise for sustainable development and added value. Sector managers musthave new thinking of integration, competition, chain production and global value chain. The built-in opportunity is very important and it is also a challenge in a golden time of 7 to 10 years that Vietnam should overcome to avoid defeat in home court.

 

“In the process of consolidation and development, the sector must make the best use of the tax lifting in imported products and technologies from EU such as species of pig, poultry, milk cow, materials and additives for animal feed, vaccines, equipments for hatching, production lines of animal feed, slaughtering, meat and milk processing, so as to access hi-techonology and reduce cost”, Mr Truc said.

 

EU commitment of immediate tax lift on honey will be a great opportunity for bee-raising for export which so far accounts for 80 per cent of Vietnamese export share in EU market. In long term, cooperation with EU in processing industry will help Vietnamese animal husbandry advantages in exporting pork and products from meat and milk to markets of high added value.

 

Mr Truc stressed that opportunity remains opportunity if Vietnam fails to make use it. Meanwhile, challenge is critical and pressing immediately when FTA in general and EVFTA is enforced due to low competitiveness of Vietnamese animal husbandry. 

 

At present, Vietnamese production cost is high, over 25-30 per cent of EU members while product quality and food safety is poorer. These two challenges make Vietnamese competitiveness poorer than other countries of EVFTA. Tax lift will open the way for import to Vietnam of frozen pork and products from meat and milk.

 

Furthermore, Vietnam has few medium and large farms of animal husbandry, and hi-tech application remains low. While production-consumption management fails to connect with integrated value chain, and trade promotion is inadequate. Businesses and farmers are not active in learning and integrating with the world. In particular, related policies are still lacking and inaccessible. “Animal husbandry sector cannot be reorganised for integration without the commitment of the whole political system with policies on land, privilleges in credits and taxes encouraging the development of value chains, new-type cooperatives, encouragement of hi-tech and VietGAHP application, assisting slaughtering, processing and consumption network, developing waste treatment system as well as trade promotion activities”, Mr Truc confirmed.

 

When EVFTA comes to force, Vietnam opens market for almost all products from EU. However, the products are subjected to long delay of tax exempt such as 7 years for frozen pork, 3 years for beef, 5 years for dairy and 10 years for chicken. It is regarded as “golden time” for Vietnamese animal husbandry to restructure the production with lower cost and higher quality. The custom of Vietnamese people consuming “fresh” meat also serves as “natural barrier” to imported frozen meat from EU.

 

According to experts, to be active in integration, the animal husbandry sector must choose species suitable to the conditions of each region and raising methods; improving animal feed without misuse of harmful elements, at the same time maintain price of animal feed at regional level, prevent diseases and reduce additional fees. It is also necessary to develop technical barriers (SPS, TBT) suitable to FTA commitments and encourage investment in environment treatment.

 

According to Vietnam Animal Husbandry Association, it is necessary to accelerate the restructuring to promote regional advantages increasing productivity, reducing production cost and ensuring food safety and sustainable development. The production must integrate in chains to reduce production cost by 12-15 per cent and ensure food safety, increase competitiveness and access to export markets. It is also important to facilitate domestic and foreign investments in animal husbandry, promote high technology in species, slaughtering-processing, environment treatment, trademarks, trade promotion, market expansion and increase advantages of products.

 

In particular, there must be appropriate credits for animal husbandry for at least next 10 years with privilleged interest rate, favourable access, income tax reduction in early stage of integration for such activities as selecting and producing species, slaughtering and processing, environment treatment, hi-tech investment and abolition of duplicated fees.