Competitive Advantage #1: Agriculture

If we want to change the country's economy and increase national competitiveness, we cannot abandon the task of "industrialization of Vietnamese agriculture" and start over right away in the national education policy.

In the short term, for example, if Vietnam does not promote its competitive advantages in agriculture to reach out to the world in 10 years, then once again, we will miss the opportunity.

Next year (2015), we will celebrate the 40th anniversary of national reunification. So, during those 4 decades, what have been our important achievements, and what will be the important challenges ahead? Here, in this short article, it is impossible to list all the achievements. The next challenge is how to optimize those achievements to develop the economy in a sustainable way.

In our opinion, let's first talk about the most sustainable competitive advantage, which is agriculture. Why?

Because, despite being a land of “small land and large population”, Vietnam is still an ideal country to develop agricultural export products. In the last 10 years, products such as rice, coffee, cashew, pepper are obvious examples showing that Vietnamese agricultural products have gained a good position in the world market.

The majority of Vietnamese people, accustomed to hard work, know how to rely on the laws of nature and always desire peace to build a better life. With a literacy rate of up to 98%, many of them should have basic education to be able to access new technology, new varieties and new equipment.

There are also famous professors of agriculture in the world who, when coming to Vietnam to research or transfer technology, have a common comment: Vietnamese farmers are intelligent and willing to learn, compared to farmers in other developing countries in... Africa. Professor Vo Tong Xuan once brought old Vietnamese farmers to Africa to teach rice growing! However, as Professor Vo Tong Xuan, a prestigious agronomist, commented: In reality, the figure of 98% is not substantial, the quality of general education is increasingly deteriorating. The general education program is too heavy, learning is mainly for taking exams and then forgetting, not for applying in practice. If so, this figure of 98% of the population being literate will not train many farmers with a basic cultural foundation for modern agricultural development. We still have to do more for Vietnam's agricultural education policy.

Meanwhile, the weather in Vietnam is not too harsh to develop a large enough agricultural sector as available resources. The two locomotives of agricultural development at the two ends of the country, the Red River rice granary and the Mekong Delta rice granary, can even pull the entire Vietnamese economic ship if we know how to operate them optimally. However, the Red River rice granary is still always short of food, so farmers cannot get rich if they do not grow crops that are valuable and suitable for the weather and soil of the North. According to the economic theory of "development locomotive", policy makers need to focus most of their resources on the Mekong Delta locomotive, in a more practical way.

Currently, labor costs in the agricultural sector are no longer low (to create an advantage). Professor Vo Tong Xuan commented: "Today's labor costs are very high, so landowners must rely on mechanical forces to bear the costs. For example: Harvesting rice by hand costs about 5 million VND in labor, while harvesting and threshing by machine only costs 2.5 million VND". Therefore, the path of agricultural industrialization is a great solution to create a competitive advantage for Vietnamese agricultural products in the international and domestic markets. Related to this issue is land large enough for large-scale production - a strategy that agricultural policy makers must face with the current legal and regulatory system.

Meanwhile, rural infrastructure has improved significantly over the past two decades. Political stability at the local level is also a strength, and could be improved if corruption and harassment were reduced...

Although there are still many criticisms of the Government's policies on rural agriculture, in terms of trends, the Government is promoting agricultural development. That said, in reality, investment is not commensurate with the potential. What is worrying is that the proportion of investment from all sources tends to decrease steadily over the years along with the alarming decline of the country's agriculture. According to reported data, agricultural investment is currently about 3% of GDP, but even that investment source is unclear for the purpose of increasing the added value of agricultural products and improving farmers' lives, sometimes falling into a situation of "more harm than good". Professor Vo Tong Xuan gave an example of ineffective investment: "The saline area of ​​the Ca Mau peninsula has been sweetened with too much investment, which has affected the potential for fish and shrimp farming, and rice production has also been damaged".

Agricultural growth rate

Period Growth Rate/year

1995-2000 4%

2000-2005 3.7%

2006 2.8%

2007 2.3%

2011 2.4-2.6%

(Source: Communist Magazine)

Investment rate in agriculture

Period Ratio of agricultural investment/total social investment

2000 13.85%

2005 07.5%

2008 06.45%

2009 06.26%

(Source: Communist Magazine)

We have also built a global reputation for rice, coffee, pepper, cashew nuts and seafood in the early days of our integration into the world market. However, our reputation is still limited to quantity, not quality, and we are sometimes sued for low prices. “In other words, the intellectual content of each Vietnamese agricultural product is low. This is a characteristic that needs to be improved in the future if we want to increase our competitiveness in the world of integration and free trade,” emphasized Professor Vo Tong Xuan.

5P in agriculture:If we take the 5P model, we would like to propose the following ideas:

a/P1- Product: Agricultural extension agencies can help farmers strictly apply GAP techniques, not following old practices (experiences) to increase the intellectual content of products. Agricultural policy makers must provide a roadmap for this issue, of course with a certain budget. This is within the reach of the Government. Farmers and investors in agriculture need to be advised by the agricultural extension agencies of the Ministry of Agriculture and Rural Development on choosing new seeds with higher productivity and better quality, more sustainable (using less water, growing faster, can grow on less fertile soil). In addition, it is also necessary to follow world standards such as parameters on green production. In addition, it is necessary to build a brand for the finished product. Exported rice has few brands because most food companies do not have raw material areas but only buy raw rice collected by hundreds of traders, with inconsistent quality.

b/ P2- Price:How to reduce production costs by applying GAP processes (not too much fertilizer, not sowing too thickly) to save money on fertilizer and pesticides, less effort in applying fertilizer and pesticides, and reduce the amount of greenhouse gases emitted from rice fields, which aggravates climate change. The government and industry associations can help improve farmers' profits by finding ways to lower logistics costs, and being able to sell at higher prices without increasing production costs.

c/ P3- Location: The distribution to the market must be radically improved according to the criteria of faster access to the market at lower cost and with better quality.

d/P4- Promotion:The government and specialized national promotion agencies can help implement marketing and PR campaigns. Of course, the premise is to have branded, high-quality products. Trade promotion agencies must be proactive in finding or opening new markets for Vietnamese processed agricultural products. For example, the story of OTOP in Thailand (1).

e/P5- The people here are farmersThe government must create conditions for farmers (with a strong desire to escape poverty) to participate in producing products suitable for the market using new technology and new varieties. Farmers must have access to more information, including information on land use planning, compensation prices, etc.

We are currently discussing the TPP (Trans-Pacific Partnership) with partner countries, hoping that our negotiators will soon reach an agreement with stronger economies and larger markets that can accommodate Vietnam's unique agricultural products.

Instead of concluding this short article are some focused suggestions, i.e. where to start?

a/ We must start from education, with training strategies focusing on agriculture. The sad reality today is that low-achieving students often choose to enter agricultural universities.

How to change that perception in society? The answer must start with national education policy makers. In the immediate future, the Government can create preferential scholarships for students in agricultural, forestry and fishery schools. Improve the curriculum at primary and secondary levels so that students are deeply imbued with the spirit of a poor agricultural country with development potential, with the central role being the younger generation. Communication and education policies need to be more frequent, for example, the density of news about policies, about leaders visiting, encouraging, and instructing in the agricultural sector must correspond to other political events on state media. Including information about job opportunities in agricultural investment programs.

Nowadays, we often see that whenever there is a natural disaster or storm or flood, the media is full of information about the field trips of leaders and the Central Committee for Flood and Storm Prevention. Surely people expect that the top leaders will regularly appear at other normal events (not when there is a crisis) related to agriculture and rural development. For example, during bumper crops or when going to the fields, etc. That is not a "form of propaganda" but a message encouraging action so that farmers - the majority of the population - and investors in agriculture (including state capital management agencies in this field) will have confidence and act more decisively and effectively.

b/ Redefining production strategy: With available resources, the government (specifically the Ministry of Agriculture and Rural Development) can fully support and promote growth in agriculture, improving farmers' lives. Professor Vo Tong Xuan believes that we need to emphasize the market factor. That means planning will no longer follow emotional targets but must follow the signals that the market is demanding, or the market can be opened anew.

c/ To increase competitiveness (domestic or global), we need to have national marketing campaigns. First of all, we need to regularly participate in regional and world agricultural exhibitions with the clear goal of promoting established local brands. There have been too many articles about the waste or ineffectiveness of investment promotion programs… over the years. Let’s spend that money on marketing Vietnamese agricultural products.

d/ Promote the role of associations such as coffee and rice associations, etc. in protecting farmers' income and prices. As Mr. Dang Le Nguyen Vu, General Director of Trung Nguyen Coffee once proposed: Why doesn't Vietnam, the world's second largest coffee exporter, host a world coffee conference with the aim of establishing a "World Coffee Association" in which Vietnam plays the role of rotating chairman?

“Agriculture is Vietnam's fundamental economic advantage. No one should turn their back on their advantages" - (UNDP General Director - Helen Clark).

One point we would like to “repeat” here is: Although our recent Development Resolutions have changed the structure towards increasing the proportion of services and reducing the proportion of agriculture in the economy, it does not mean reducing investment policies to increase the added value of agricultural products. Simply put, it is necessary to increase the value of services in the agricultural production sector. Because as Ms. Helen Clark, Director General of the United Nations Development Agency UNDP said at the Workshop on Vietnam Economic Reform in Hanoi on March 24, 2014: “Agriculture is the fundamental economic advantage of Vietnam. No one should turn their back on their own advantages.”

All the above information is only to add another voice to the national chorus about the role of the agricultural economy, to change the face of the Vietnamese economy, and above all, to “return to Caesar what belongs to Cesar”. More than 70% of Vietnam’s population comes from farmers, and once agriculture is industrialized, Vietnam can hope to achieve its dream of industrialization, whether by 2020 or beyond.

According to Chinhphu.vn