Agricultural businesses urged to work together

Agricultural businesses urged to work together

The statement was made by Deputy Minister of Agriculture and Rural Development (MARD) Ha Cong Tuan at the Viet Nam Business Forum jointly held by the ministry and Vietnam Chamber of Commerce and Industry in Ha Noi on Tuesday.

Tuan said the number of enterprises in the agricultural sector has rapidly increased over the past three years. To date, Viet Nam has about 500 enterprises involved in the chain, from production, harvest, processing, to trading, import and export of agricultural products.

He said the State had issued many policies to support agricultural enterprises, especially to enhance connections in agricultural production.

“Viet Nam has a system of businesses, co-operatives and many agricultural scientists, along with the State's support. That’s enough for us to promote the participation in global export chains,” Tuan said.

“Co-operation among businesses is extremely important, and needs to diversify towards safe, traceable and higher value-added agricultural production," Tuan said.

Statistics from MARD shows that Viet Nam had 1,478 production chains by the end of September, an increase of 660 units compared to the same period last year.

The country has more than 25,500 households co-operating with businesses in production meeting VietGAP standards. About 619,000 others are involved in production.

Viet Nam’s agricultural products are currently exported to 185 countries and territories, ranking second in Southeast Asia and 15th globally. The country has also signed 16 new-generation free trade agreements, thereby creating more opportunities for agricultural exports.

In the first nine months of this year, the country’s agricultural exports reached US$30.2 billion, up 2.7 per cent year-on-year.

General Director of South Korea’s Dreamfarm Company, Park Hyang Jin, said the weakest point in Vietnamese agricultural enterprises is production and processing technology. In addition, State support has not been effective while the linkage among enterprises to improve the value of agricultural products is poor.

Park said Vietnamese businesses needed to further invest in technology from production to processing, packaging and consumption, ensuring the entire process is properly controlled.

According to Pham Hoang Van Anh, an expert at the World Bank in Viet Nam, global demand for food will increase by 70-100 per cent by 2050 due to population growth and changes in eating and drinking habits.

“To catch up with these changes, Vietnamese businesses need to participate deeply in the global value chain, building an infrastructure of quality to raise competitiveness. This infrastructure is a key factor for the development of the agriculture and food industry,” Van Anh said.

Accessing credit

Pham Thi Thanh Tung, head of the central bank’s Department of Credit for Agriculture, said that the re-organisation of production in the value chain and application of science and technology is a key driver for the country’s development of sustainable agriculture.

However, she said production under the associated models revealed limitations due to weak co-operation and linkages. The number of safe agricultural chains is also low.

“Many associated contracts are not close, causing violations to people and businesses. This makes it difficult for credit institutions to control the cash flow when lending,” Tung said.

In addition, she said the agricultural sector is always at risk of natural disasters and epidemics. Many agricultural enterprises lack transparency and security assets, making it difficult to access credit.

In order to increase credit for agricultural development and encourage businesses to invest in agricultural value chains, Tung said that it was necessary to improve the appraisal efficiency and assess customers’ trustworthiness, as well as enhancing the possibility of lending without collateral and removing difficulties for agricultural enterprises.

At the forum, participants discussed and put forward solutions to increase the development of the agricultural sector, including training for businesses, planning production areas, trade promotion and market expansion.

They agreed that IT policies would need to be renovated, helping businesses access capital and land, in addition to strengthening the application of standards to enhance the quality of products, ensuring food safety, branding and supporting people to implement VietGap, GlobalGap and Organic standards. 

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