Sustainable Chains Needed for Businesses to Tap EVFTA

9:54:51 AM | 30/9/2020

The signing and enforcement of the EVFTA not only brings opportunities for export growth but also helps Vietnam's agricultural sector accelerate restructuring, with focus placed on competitiveness enhancement through product quality, traceability and packaging, helping Vietnam's agricultural, forest and aquatic products integrate deeply into global supply chains. Vietnam Business Forum has an exclusive interview with Mr. Pham Thai Binh, General Director of Trung An High-Tech Agriculture Joint Stock Company, on this issue. Duy Binh reports.

EVFTA already came into effect. As a reputable rice exporter, how do you assess new opportunities for Vietnamese agricultural companies?

EVFTA will really be a golden opportunity, creating a strong boost for export of agricultural, forest and aquatic products, especially strong and competitive products such as seafood, vegetables, rice, cashew, coffee, pepper and woodwork.

Agricultural imports currently account for about 8.4% of the EU's total imports. Therefore, Vietnam still has room to expand agricultural, forest and aquatic exports to this huge consumer market.

EVFTA has the highest level of commitment that an FTA partner gives to Vietnam (99% of import tariff lines will be eliminated in 7-10 years), especially for some strong agricultural exports of Vietnam like rice, seafood, coffee and vegetables.

Needless to say, EVFTA helps Vietnamese businesses easily take part in a “level playing field” where businesses must assert themselves, must be aware that they not only build brands for themselves but also build a national brand.

It is said that the cooperation chain among businesses, farmers and cooperatives in Vietnam is currently unsustainable. What do you think about this issue?

Vietnam's economy is increasingly integrated into the world economy. However, in the agricultural sector, many Vietnamese agricultural products do not have a strong brand in the market. Therefore, building and developing the agricultural product value chain to meet market needs is an urgent requirement in the current context of deep integration.

Recently, many places have set up synchronous value chains in production, processing and consumption of agricultural, forest and aquatic products, engaged by enterprises, cooperatives, and farmers. With the introduction of support and incentive policies by the Government and central agencies for businesses and cooperatives to form production and consumption chains, Vietnam has established development chains at three levels: National key product, provincial key product and local product. To focus resources on developing value chains for key agricultural products in the country, the Ministry of Agriculture and Rural Development of Vietnam has issued a list of those products at national level to shape investment priorities in the agricultural and rural development according to Decree 57/2018/ND-CP with 13 key products, including rice, coffee, rubber, cashew, pepper, tea, vegetables, fruits, cassava, pork, meat and eggs, pangasius, shrimp and woodwork.

Accordingly, closed value chains of national key products from production to consumption have been gradually completed. Especially, the rice value chain has been implemented by the Ministry of Agriculture and Rural Development for the past 10 years. Many localities, businesses, cooperatives and farmers have joined the value chain. However, due to the lack of specific policy solutions for capital resources, the value chain based on contractual production and consumption is still very weak.

For your part, how have you prepared to seize EVFTA opportunities?

Trung An Company already brought its products to Europe before the EVFTA came into effect. We have prepared to export our products to demanding markets such as Europe, America, Australia and Singapore since 2011.

To meet quality requirements in the European market, we have focused on applying large-scale farming methods directed by the Ministry of Agriculture and Rural Development. We have advocated direct cooperation with farmers for mutual benefits. At present, Trung An is proud to be one of companies selected by the Ministry of Agriculture and Rural Development as a model for developing large-scale fields in the Mekong Delta for scale-up to other regions.

We are currently running 30,000 ha of rice fields that meet export requirements.

More specifically, Trung An uses 6,000 ha in Kien Giang province (800 ha owned by the Company) to grow rice that meets Global G.A.P standards and grow organic rice to meet fastidious customer demands for quality (free from pesticide residue). Up to now, 615 ha has been granted GlobalG.A.P certification and 100 ha has been certified by Organic Certification of the U.S. and Europe. Depending on actual market demand, the Global G.A.P. and Organic acreages will be expanded on the remaining area. Notably, unlike other farmers' fields, its 800 ha of land used to be in a primitive Melaleuca forest and cultivated rice with Organic and Global G.A.P standards from 2015. Therefore, the remaining 700 ha can meet organic farming standards at any time rather than spending time on improving the soil for three years like other traditional fields.

With such preparations, at the beginning of July 2020, Trung An successfully exported three containers of Trung An-branded rice (TRUNG AN RICE) to France. "This is the first time a Vietnamese-branded rice product is directly sold to European consumers”.

Thank you very much!

In order to export all the quotas that the EU has granted and increase the quotas for the following years, the only way that the Vietnamese rice industry can go is producing and cultivating rice in a sustainable manner and strictly adhering to market requirements. To be more specific, it must apply large-field cultivation and boost cooperation with farmers.

Source: Vietnam Business Forum