Big investors eyeing organic food market

The area for organic farming makes up only 0.2% of total agricultural production, but the figure is expected to increase rapidly as more investors are considering developing organic farming projects.

High profits promised
A report showed that the organic farming area has been increasing in recent years, from 12,000 hectares in 2007 to 43,000 hectares in 2014, which has added Vietnam to the list of 10 countries with the highest number of organic farming area in Asia. There are nearly 3,000 organic farm producers in Vietnam.
big investors eyeing organic food market hinh 0
Many large investments in organic agriculture have been announced recently. Thanh Thanh Cong Group, known as a large sugar producer, said it plans to shift a part of the sugarcane growing area in Tay Ninh province into organic farming which would serve organic sugar production.
True Milk, a large dairy producer, has announced the development of projects on growing organic vegetable and making organic milk. The products are expected to hit the market by the end of 2016. Meanwhile, Vinamilk, the nation’s leading dairy producer, has launched an advertisement campaign about its dairy product which can meet USDA standards.
The representative of Organik Da Lat said the demand is always high. A company orders eight containers of organic coriander a week for export to Japan. However, Organik Da Lat still cannot meet the demand. The revenue from baby carrots and turnips can be up to US$1 million per hectare.
Smaller investors now also rush to pour money into the organic food market, which remains unexploited, and therefore, has high potential.
According to the Ministry of Science & Technology, the total area for organic agricultural production has reached 23,000 hectares, accounting for 0.2% of total agricultural production area in the country.
Most of the area for organic farming is wild and natural land, such as the Shan tea, cinnamon and anise growing area in the north and the ecological shrimp farming area in Mekong Delta. 
Very few farms have certificates on organic farming in Vietnam. Most of the organic food is for export, while the domestic organic food market was worth only US$2 million in 2014.
High risks
“Some investors have contacted us and suggested cooperation. But I have to remind them that it is very risky to invest in agricultural production,” said Pham Phuong Thao, director of Organica.

Organica opened four shops in the last four years. “The difficulty is how to approach customers and persuade them to buy the products at prices higher than market prices,” she said.

Organica now has 10 hectares of organic vegetable growing areas in Dong Nai, Lam Dong and Hanoi. All of the plants are pure, not GMO (genetically modified organisms).


Related news