Vietnam urged deeper integration into global agricultural value chain

October 8, 2019 | 07:00 pm PT
Vietnam has an important opportunity to use its agricultural strengths and deepen its integration into the global value chain, experts say.

To do this, Vietnamese enterprises need to invest in technology across the board, from production and processing to packaging and consumption, they said at a recent forum titled "Vietnam enterprises: Links to participate in global agricultural value chain."

The forum was organized by the Ministry of Agriculture and Rural Development (MARD) and the Vietnam Chamber of Commerce and Industry (VCCI).

Pham Hoang Van Anh, an expert with the World Bank Group, said the world's demand for food will increase 70 percent between 2017 and 2050 due to population growth and changes in eating and drinking habits, presenting a great opportunity for Vietnam to make agricultural contributions to the global value chain.

However, the country has not unlocked its entire potential despite having many advantages in agricultural production, said Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI).

He said that Vietnam has so far only succeeded in low value addition to its agricultural produce because there was insufficient focus on processing and packaging. "Besides, there were many issues with bank’s providing credit to incentivize businesses into investing in agricultural value chains."

A representative of a rice exporter pointed out the inadequacies in the current chain, saying that 5-7 million tons of rice is exported each year, but most of the rice does not come from model large-sized fields. 

The number of large integrated fields that can take advantage of economies of scale was getting smaller and smaller, mainly because of the lack of capital, especially for long and medium-term investment in equipment like rice dryers and short-term capital for farm inputs and paying farmers to harvest.

International experts at the forum said the weaknesses of Vietnam's agricultural production chain were rooted in a lack of policy and planning coherence and technology limitations.

Park Hyang Jin, General Director of South Korean-invested Dreamfarm Company, said that in order to improve the sector’s competitiveness, Vietnamese enterprises need to invest in technology, from production and processing to packaging and consumption, ensuring that the entire process is properly controlled.

He said this would help new businesses contribute to improving the value of agricultural products by participating in the global agricultural value chain.

The World Bank’s Van Anh said Vietnam should build quality infrastructure because it was "a key factor for the development of the agriculture and food industry."

By the end of September 2019, Vietnam had 1,478 chain models, up by 660 compared to the same period last year. The country also had 1,462 products and 3,267 locations for selling chain-controlled safe agricultural products in all provinces and cities, according to the Ministry of Agriculture and Rural Development, 

Vietnamese agricultural products are exported to 185 countries and territories, ranking it the second in Southeast Asia and 15th in the world. The country has signed 16 free trade agreements of which 12 came into force, creating more opportunities for agricultural exports.

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