Agribusiness link with farmers key to restructuring
Agribusiness link with farmers key to restructuring
The Government is asking the agriculture ministry to quickly draw up policies to promote partnership between farmers and agribusiness companies, since the lack of such a partnership has been identified as the main reason why the sector has been lagging behind.
The move has been prioritised because the Mekong Delta, the country's biggest agricultural hub which has huge potential in rice and catfish production, has been struggling with slower sales of farm products despite lower price.
This is also in line with a larger plan to revamp the whole agriculture sector which requires changes in production practices, interaction between farmers and agribusiness companies and the way in which agricultural supply chains are managed.
One particular policy will touch on how rice companies will be deemed eligible for exporting rice. Those companies signing long-term purchase contracts with farmers will receive higher priority on the list. Eventually, contract farming will be mandatory for the major rice exporters, who will also be encouraged to participate in the production process.
The Government has also directed the food association, the catfish association and the association of seafood exporters and processors to come up with a co-operative method designed to prevent unhealthy price competition. Seafood companies are also urged to strengthen their partnership with farmers.
Opting for a bigger role in the private sector is an important game-changing policy for the Government in the future. Government intervention alone is no longer valid in the agricultural sector, instead the Government will now play a supporting role in terms of creating an attractive environment for other businesses in the economy, says Nguyen Do Anh Tuan, director of the Institute of Policy and Strategy for Agriculture and Rural Development ‘s Centre of Agriculture Policy.
Agriculture minister Cao Duc Phat has emphasised the importance of empowering farmers through the use of farming clusters and groups, otherwise it would be impossible to work effectively with 10 million farmers scattered across the country.
Agriculture is Viet Nam's primary sector and force behind the export market. The total value for agricultural exports has reached a record high of US$27.5 billion. To add more value to its products, the industry is now setting its sights on restructuring.
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