Unleashing agriculture’s potential in Vietnam

At a recent conference in Hanoi, speakers from the Institute, a think-tank for the Ministry of Agriculture and Rural Development (MARD), addressed measures to bolster the competitiveness of agriculture.

“Most importantly,” said Nguyen Trung Kien, “industry participants need to capture some of the economies of scale that their foreign counterparts enjoy from advanced fertilizers and seeds.”

“Additionally, there needs to be more investment in agricultural research and technology development.”

While increasing agricultural yields is essential, said Mr Kien, more attention needs to be placed on the downstream segment of the ag-food system – assembly, storage, processing, wholesaling and retail.

For example, food processing companies located in Vietnam often prefer to import raw materials such as fruit juice concentrate, grains and vegetable oil rather than sourcing them domestically or developing substitutes based on local raw materials because local supply chains are too weak and fragmented to provide them reliably.

Appropriate policies will vary by market segment, but broad efforts to upgrade small and medium sized businesses in the food processing segment of agriculture should be a policy priority.

Strengthening the linkages between market-oriented family farms and their organizations with agribusiness of all sizes to enhance access to markets, inputs and support services should also be a top priority, said Mr Kien.

He emphasized, in particular, that special attention should be placed in supporting both women and young entrepreneurs, who play a key role in the ag-food system from farming through the supply chain to retail.

Lastly, he said the government should shift spending towards public goods such as roads, reliable electricity supply, research and schooling rather than towards subsidizing private goods such as fertilizer and tractors.

Dr Sergio Rene Araujo-Enciso, an economist at the Food and Agriculture Organization of the United Nations in Vietnam in turn shifted the subject to the expansion of overseas markets for Vietnamese fruit.

Dr Rene said actors in the agriculture segment of the economy in Vietnam should pay particular attention to accessing foreign markets for dragon fruit, rambutan, and litchi because more and more people are interested in them.

He said, however, consumers around the globe are highly concerned with the safety of Vietnamese fruit and vegetables— resulting in a reluctance to purchase them and that is a pivotal obstacle that needs to be rectified to unleash their potential.