Difficult to build beef cattle industry

In the past 5 years, Vietnam’s cattle herd has decreased by about 1.5 million, the main reason being the decrease in pasture area. Some businesses have invested in beef cattle farms but only at a scale of about 200 cows.

-The Pioneers

A few years ago, realizing the growing demand for beef in Vietnam, some investors established Viet Farm Agricultural Company with the purpose of investing in building beef farms to supply the market.

In an open letter to shareholders, Viet Farm said it will invest in two imported beef cattle breeds, Red Angus (USA) and Brahman (Australia) in Cu Chi district, Ho Chi Minh City.

According to the company's calculations, if we compare the savings interest rate of banks with the project's (minimum) profit interest rate of 47%/year, the high-quality beef cattle investment project at Trang Trai Viet is an attractive investment channel.

However, Mr. Phan Van Thang, Business Assistant of Viet Farm, said that the company has temporarily suspended its cooperation program with investors in building and developing beef cattle farms.

Currently, Viet Farm is raising 200 beef cattle on the company's 2.5 hectare land area. Thus, the plan to increase the beef cattle herd to 5,000 cows in a closed process in the period 2013-2018 of Viet Farm can be said to be unachievable.

More than 3 years ago, Mr. Luu Tri Dien, from Ben Tre, an overseas Vietnamese in Switzerland, also invested in a beef cattle farm in Giong Ao hamlet, An Hiep commune, Ba Tri district (Ben Tre). He invested in a beef cattle farm on an area of ​​7 hectares with 200 cows.

According to the Department of Livestock, Ministry of Agriculture and Rural Development (MARD), these can be considered two enterprises with large scale of beef cattle farming in Vietnam in recent years, the rest mainly fall into households with herds of only about 10 beef cattle. The reason is due to lack of land fund, high cost of breeding, so it is difficult to have large scale beef cattle farms, mainly raising on a scale of a few cattle to take advantage of natural food sources.

There will be no beef cattle industry.

Mr. Nguyen Xuan Duong, acting Director of the Department of Livestock, Ministry of Agriculture and Rural Development, said that the beef cattle herd in Vietnam has decreased by about 1.5 million heads in the past five years, from 6.7 million heads in 2007 to 5.2 million heads in 2012 (see table). The reason is that the area of ​​grasslands, dikes, and banks of land plots is gradually shrinking due to the concretization process.

“Compared to other countries, Vietnam does not have the strength to develop beef cattle on a large farm scale, but only in households with less than 10 cows to take advantage of available natural food sources,” said Mr. Duong.

According to Mr. Duong, the strategy for developing Vietnam's livestock industry in the past and coming years is to focus on existing strengths and limit imports.

Therefore, regarding beef, the domestic livestock industry can only try to supply the market to a certain extent, and the rest must depend on imports to meet people's needs.

Due to the continuous decrease in the total cattle herd over the past 5 years, Vietnam has had to import cattle through unofficial channels from Laos, Cambodia, and Thailand to meet domestic demand.

According to the Quang Tri Farmers Association, there were times when up to 500 cows were imported from Laos every day. These cows originated from Laos and Thailand but were legalized as being raised by local people.

According to the Department of Animal Husbandry, in recent years, because cows are imported across the border mainly through unofficial channels, there are no specific statistics, but it is a quite large number.

Also because of the increased demand for domestic beef consumption, recently some businesses have imported beef from Australia thanks to the advantage of import tax incentives to import and sell at competitive prices with domestic beef.

The total herd of cattle (million heads - rounded) in Vietnam has been on a downward trend over the years. Data from the General Statistics Office.

According to Saigon Economic Times-PH