Large Enterprises Play a Major Role in Value Chain

9:42:01 AM | 7/29/2021

Currently, the linkage between agricultural product production and trade is forming and developing strongly with diverse contents and forms. Of which, large enterprises play the major role, leading the value chain and the market. At the macro level, the guidelines and policies of the Party, State and localities play an important role, leading to an open direction, facilitating and promoting strong linkages.

The Dong Giao Foodstuff Export Joint Stock Company (Doveco) in Ninh Binh province has successfully built many production chains in the processing and consumption of agricultural products. (Photo: DUC PHUONG)

Creating high added value for agricultural products

The Dalat Hasfarm Co., Ltd (Da Lat City, Lam Dong) is an enterprise specializing in the production and distribution of seedlings, cut flowers and potted flowers in the domestic market and for export. With an area of nearly 320 hectares, Dalat Hasfarm currently produces about 200 million flower stems and 250 million seedlings each year, supplying markets around the world. In 2020, the sale of flowers reached more than VND58 billion. According to Nguyen Van Bao, Deputy General Director of Dalat Hasfarm Co., Ltd, the fact that Dalat Hasfarm shook hands with Da Lat farmers in a closed chain from production to consumption has brought benefits and higher profits to the both farmers and enterprises.

Moc Chau Dairy Cow Breeding Joint Stock Company, Son La Province (Moc Chau Milk) is also a typical example as it has succeeded thanks to helping farmers become billionaires by raising livestock. Deputy General Director of the Company Nguyen Sy Quang said the company is associated with more than 600 farmer households. All farmer households are trained and guided by the company to apply breeding technology that meets European standards. Products are bought by the company according to the signed contract. Accompanying farmers has helped the company develop a sustainable raw material area, take full initiative in the supply of raw milk for production, and meeting the strict standards of quality and food hygiene. As for farmers, cooperating with Moc Chau Milk is like having a "changed life", according to Nguyen Thi Hang – a farmer in Moc Chau town. With 60 dairy cattle producing more than 200 tonnes of milk per year, her family earns about VND1 billion per year.

Meanwhile, KCP Vietnam Industry Co., Ltd has also accompanied tens of thousands of mountainous farmers in Phu Yen province in the sugarcane industry. General Director of KCP Vietnam Industry Co., Ltd., K.V.R.S Subbaiah said that in the past 20 years, the company has bought over 13.3 million tonnes of sugarcane, produced 1.4 million tonnes of refined sugar, paying farmers VND14.09 trillion, investing VND2.4 trillion in the raw material area. The company generates the main source of income for about 9,500 sugarcane farmers and 700 direct and indirect agricultural workers.

Not only helping farmers are getting rich from agriculture, as businesses lead the association, they also create a closed value chain with the finished product at the final stage being sold on both domestic and foreign markets, contributing to the brand value of Vietnamese agricultural products. Dalat Hasfarm has exported flowers to many international markets, such as Indonesia, the Republic of Korea, Denmark, Thailand, and Taiwan (China). The Da Lat flower brand has been recognised in many countries country in the world. The closed production model along the value chain, from production, processing to trading and exporting fruit and vegetable, of the Dong Giao Foodstuff Export Joint Stock Company (Doveco) is one of the "highlights" of the value chain link, creating high added value for fresh and processed vegetables.

Bold innovation and "Ruby plum" story

At the beginning of June 2021, Son La province officially launched the brand "Ruby plum" , selected from the most carefully cared for plum orchards, giving the sweetest fruit and the most uniform size in Na Ka valley, Moc Chau district. In order to create plums that meet the standard, Na Ka farmers are willing to sacrifice up to 30% of the output, pruning branches and fruit to keep only the most delicious and unique fruit.

Three companies, Foodmap, Mia Fruit and ECovi, have accompanied the Son La Provincial People's Committee and farmers in the programme raising the brand profile and promoting Ruby plum consumption.

It is not easy for a business to "bet" on investing in plums which are inherently a popular product; it is not easy for the Na Ka farmers willing to sacrifice their output to believe in the "less quantity, more high quality" way of business; it is not easy for local authorities to "dare" to put people's incomes into a completely new structure.

The Ruby plums have been well received in the national market, with prices up to VND230,000 per kilogramme, bringing high incomes to growers.

It can be seen that the breakthrough in the way of thinking and doing has created opportunities for linkages between enterprises and farmers to form and develop. The Ruby plums will also become an inspirational story for other localities across the country in implementing multi-house linkages to raise the value of agricultural products.

Vice Chairman of the Son La Provincial People's Committee Nguyen Thanh Cong said: In the period 2016 - 2020, the province issued many resolutions mainly related to supporting the development of fruit trees and improving the quality and operation of new-style cooperatives. Specifically, the province has actively worked with processing companies and corporations; and created appropriate mechanisms and policies to support enterprises to build large factories in the province, such as the fruit and fruit juice processing factory of the TH Group, the passion fruit processing factory of Nafoods Company; and the Dong Giao Foodstuff Export Joint Stock Company (Deveco).

Not only in Son La province, but in most localities that have succeeded in linking agricultural development, the innovation from the direction and actions of the government, businesses and farmers play an important role.

According to Government Resolution No. 53 / NQ-CP dated July 17, 2019 on solutions to encourage and promote enterprises to invest in efficient, safe and sustainable agriculture; agricultural enterprises are identified as "pillars" in promoting the development of agricultural production value chains in the direction of large-scale commodity production, applying science and technology, and improving efficiency, competitiveness and developing the brand name of Vietnamese agricultural products.

With a vision to 2030, there will be 80,000 to 100,000 enterprises with effective business investment activities in the agricultural sector, of which about 3,000 to 4,000 are large-scale enterprises and 6,000 to 8,000 medium-sized enterprises.

Source: NDO