A spectacular jump

According to statistics from the Ministry of Agriculture and Rural Development, over 70 percent of Vietnam’s population and 60 percent of labourers are working in rural areas.

After one year of joining the World Trade Organisation (WTO), farmers and enterprises now have access to a huge market for farm produce with trade turnover reaching nearly US$600 billion per year. In 2000, total export turnover of agro-forestry and aquatic products reached only US$4.197 billion and is expected to reach more than US$12 billion in 2007, surpassing the set target.

In 2007 many agro-forestry and aquatic products have obtained an export turnover of over US$1 billion, with coffee reaching around US$1.7 billion, seafood US$3.6-3.7 billion, processed wood products US$2.5 billion, and rubber around US$1.4 billion. Cashew nuts obtained a record export turnover of around US$650 million while pepper export turnover amounted to US$249 million.

It was forecast that Vietnam would face more technical barriers in the post-WTO period, causing difficulties for exporters. However, on the contrary, Vietnam has become a successful country in exporting agricultural products.

Challenges

There are great opportunities for Vietnam to penetrate the world’s agricultural market in spite of some challenges. Minister of Agriculture and Rural Development Cao Duc Phat said high production costs are becoming one of the biggest hindrances to farmers. Their rural economy has developed in a spontaneous fashion due to a lack of materials and modern technology. Sugar production is a case in point. After a decade of implementing a one-million tonne sugar programme, Vietnam’s sugarcane productivity has increased from just 48 to 55 tonnes per ha per year while the figure in developed countries is more than 100 tonnes. Sugar mills in developed countries are able to process 8,000 tonnes of sugarcane per day. Meanwhile, although Vietnam has imported a series of production lines with capacity of 1,000 tonnes per day, the country is likely to lose out in the local market due to low productivity, high costs and the high percentage of newly-built mills.

The world market always requires a huge quantity and high quality of products and timely delivery. However, the country’s agriculture is based on scattered and small-scale production while traditional processing technologies lead to low export values for farm produce. For example, Vietnam has 750,000 hectares of fruit trees, but the country’s export turnover has reached barely US$200 million per year. Meanwhile, Thailand has only 260,000 ha of fruit trees but its export turnover is much higher.

After one year of joining the WTO, the agricultural sector still face challenges and shortcomings in the fields of plant protection, and intellectual property rights.

Rapid adjustment

At the second session of the 12^th National Assembly, Prime Minister Nguyen Tan Dung said to integrate deeply into the world economy, Vietnam should adjust rapidly. Many people said it is necessary to draw a roadmap for the agricultural sector in the context of Vietnam’s WTO membership. At first, is it necessary to clear fertile plains to build industrial parks or urban areas or protect scarce agricultural land fund to ensure the country’s sustainable development?

The Red  River Delta and the Mekong River Delta are Vietnam’s two main granaries to provide agricultural and aquatic products for the South East Asian region. Due to a lack of detailed planning for these areas, farmers continue to grow plants and raise animals in a spontaneous manner, leading to a low economic efficiency. In the current context of integration into the world's agricultural market, farmers need large investment to raise both productivity and value of plants and animals. How to help them is still a hard nut for the agricultural sector to crack.