AEC integration – no ‘magic bullet’ for Vietnam agriculture

Though the establishment will see tariffs on agriculture exports shipped to ASEAN member states progressively eliminated— a significant number of challenges will remain, particularly those related to overuse of chemicals and post harvest loss.

Officials at MARD revealed that during the first six months of the year, an alarming number of agriculture, forestry and aquatic products were unable to pass quality assessment tests.

They said 6.8% of meat randomly sampled tested positive for excess antibiotic residual. Meanwhile 1.24% of the samples for seafood and 5.4% for vegetables were substandard.

“This is a big red flag signalling violations of food hygiene and safety standards are at an alarming level,” they said adding that it poses a serious threat to the health and welfare of the nation’s residents.

Just as importantly these shortcomings are a forewarning the products won’t pass the strict standards for import set by other AEC member nations and therefore Vietnam will lose out on any increased export opportunities.

In addition, if products do not comply with the requisite quality standards of the importing nations, those products will be denied entry and importing nations allowed to impose high tariffs as a penalty.

The fundamental problem, according to MARD, is that businesses have failed to put internal control systems in place to insure products are consistently produced on a timely, economical and quality basis.

The problems associated with this haphazard and unorthodox approach to agriculture must be overcome if Vietnam is to become competitive in the marketplace following AEC integration.

Nguyen Minh Phong, a leading economist, in turn said he agrees with MARD’s assessment but also notes post harvest loss is another issue that must be resolved if Vietnam agriculture is to be competitive in the AEC.

Post-harvest loss (PHL) resulting from harvesting, drying and storage happens at all stages and results in substantial losses – both quantitative (physical losses caused by rodents, insects or infestations) and qualitative (loss of quality and value).

 “Farmers and businesses in the agriculture, forestry and aquatic sector must devise better post-harvest and transport plans to improve the freshness of their products for shipment to foreign markets.”

Products in these industries are quite naturally highly perishable and preservation methods need to be substantially revised to incorporate the latest technologies Phong said.

According to MARD officials, the abusive use of chemicals and antibiotics is the most alarming issue as it badly damages the reputation of agricultural products and serves as a low benchmark by which the Made-in-Vietnam label will be judged.

It’s a flagrant disregard for food hygiene and safety standards and with such an attitude businesses will find it difficult to establish themselves in any market, regardless of the tariff structure, they said.

Nguyen Phuong Nam, deputy head of the Competition Management Authority under the Ministry of Industry and Trade, in turn agreed that Vietnamese businesses are failing badly when it comes to food hygiene and safety.

“Most businesses in the agriculture and seafood industries need to completely revamp their production methods to ensure compliance with food hygiene and safety standards.”

Nam said the biggest stumbling block for producers and businesses seems to be post-harvest preservation methods and if not addresses satisfactorily will most likely result in their products being restricted from accessing other ASEAN markets.

Weak post-harvest preservation technology and capacity is not just a problem for the export market as it spills over and negatively impacts the domestic market due to spoilage and lost sales.

For his part, Hoang Trung, deputy head of the Plantation Protection Department (PPD), said substantial investment in upgrading the infrastructure with such items as new silos for storage and the latest technologies is the solution.

To deal with the current weakness in post harvest losses, the government must devise comprehensive specific policies and guidelines for agricultural businesses and raise the required investment needed, Trung said.

Currently, some businesses are experimenting with technologies such as GAP and some preservation technologies from Israel but there needs to be a more thorough coordinated broad based approach that extends to all kinds of products.