Circular Economy - Foundation of Sustainable Development

Agricultural production has only focused on linear productivity rather than sustainable, environmentally friendly development, or excessive residues in production process, or organic fertilizer to increase soil structure and protect biodiversity. Consequently, agricultural residues and animal waste are thrown away and even straw burning causes environmental pollution.

Recently, the concept and practice of circular economy model has drawn more attention. The circular economy in agricultural production is a closed-cycle production process where most wastes and by-products are turned into inputs for other production processes by applying biotechnology, physicochemical technology, scientific and technical advances along with very flexible applications in manufacturing and business processes.

In the context of global climate change, food security and sustainable development becomes a common issue for all humankind. Thus, the circular economy, especially the circular agricultural economy, has become a hot topic of much concern and discussion in many countries.

1. The concept of circular economy and linear economy

The circular economy is an accurate, intelligent economic system that recycles, processes, and utilizes resources in an economical, efficient manner, minimizes and gradually leaves environment-pollutant wastes.

The circular economy is also known as a non-waste economy where all wastes, by-products, equipment, tools, materials and chemicals used in one manufacturing process will become inputs for other manufacturing processes. This cycle is repeated until no waste is left.

The linear economy is only involved in resource utilization. Applying scientific advances to the manufacturing process is aimed for only one core goal: productivity. Waste is thrown away after a product is consumed, resulting in a huge amount of waste that pollutes the environment and imbalances the ecosystem.

The linear economy works as a flow of stream, uses natural resources as basic materials and products which are then sold through a series of steps. The added value is generated by selling as much as possible, resulting in the waste of using resources in saturated markets.

2. Basic principles in circular economy

2.1. Design for reuse

Waste will not exist if biological and chemical components of a product are designed to be reusable in a new cycle. In other words, this component can be separated and reused.

2.2. Flexibility from diversity

Systems that have diverse internal connections are often highly resilient and flexible against unexpected external shocks. In the economy, this flexibility comes from diversity of enterprise types, business models and production systems. At the same time, business networks must also be interactive and have mutual relationships with different suppliers and customers. Natural ecosystems are the most vivid examples of such flexible production systems.

2.3. Energy from endless sources

To reduce the load on product losses (by advanced recycling), more energy is needed. There are two main sources of available energy: renewable energy and labor force. Using renewable energy is the only way to meet conditions of a circular economy.

2.4. Systems thinking

Systems thinking focus on nonlinear systems, especially feedback loop (each system structure in which the output at each link in this structure will have an effect on the input at that link itself). In these systems, the combination of uncertain environmental factors with feedback loops to those factors often results in unpredictable results. However, to learn how to optimize these systems, we need to consider the relationships between them and the flows of materials in the production cycle.

Doing this requires a long-term approach, at various levels and scales of the circular economy. Systems, interacting with each other, lead to interdependent relations and create loops that underpin the flexibility of a circular economy.

2.5 Biological foundation

More and more consumer goods are created from biological materials and the utilization process is based on the “stratification” principle. These biological components are used for many different purposes before returning to the biosphere cycle.

In the past time, Hoa Binh T&T 159 Joint Stock Company has creatively applied the basic principles of the circular economy to collect waste and by-products in agricultural production to make animal feeds in its complexes. The company organizes concentrated husbandry and associated husbandry and produces biological cushions for breeding facilities to treat waste in husbandry. Completely treating environmental impacts in the whole production and business process plays a very important role in balancing the natural ecosystem.

With 5,000 buffaloes and cows in each farm, the company uses 30,000 tons of agricultural by-products to produce animal feeds and produces 25,000 tons of micro organic fertilizers.

To achieve these results, we have applied many flexible and appropriate solutions to problems that arise from the process of implementation, especially best benefit-sharing for actors and stakeholders. Relevant actors and stakeholders in the chain easily identify their rights and responsibilities when they take part.

3. Solutions recommended to promote circular economy

In order to promote the circular economy, we see the need for a clear legal corridor for growing the circular economy. Enterprises are the central driving force, the State plays a constructive role, and the masses implement it. The constructive role of the State is reflected in its creation of a good environment for circular economy to grow.

In addition, we suggest that a clear legal framework for innovation is needed to support developing the circular economy. Innovation plays a very important role in changing rigid and outdated institutions. If there is a lack of legal framework, outdated institutions will be a barrier to innovations.

Vietnam may consider incorporating both international approaches of developing the circular economy into its agenda: Approach to sectors, products and inputs and approach to economic scales and geographical spaces.

Besides, Vietnam must also carry out other contents of the circular economy, such as encouraging renewable energy, enriching soil, preventing rice straw burning, promoting the use of environmentally friendly products, and improving and developing the circular economy in Vietnam.

We recommend that the policy on circular economy development should be added into the Party's Resolution and that the National Assembly should adopt laws to promote the circular economy development. The National Assembly and the Government advocate and encourage the development of circular economy models in the community and in businesses. In developing the circular economy, businesses will play a core role.

Vietnam is facing many serious challenges of resource depletion, environmental pollution and climate change. So, promoting circular economy development is an appropriate transformation that Vietnam is seeking to realize its sustainable development goals.

By Ha Van Thang, President of the Board of Directors, Hoa Binh T&T 159 Company