Vietnam Agriculture: "The domestic market is still endless"

Famous as a vegetable growing land, the head of the Lam Dong Farmers' Association, Mr. Tran Duy Viet, had to exclaim that Lam Dong farmers are producing in a way that is "gambling with the sky."

Lacking market information and production links, farmers in specialized production areas always face countless risks, and the most heartbreaking story is still the story of good harvests and low prices.

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Go against the current

A real story is happening and is also worth thinking about, when on the same land, at the same time and with the same type of crop, there are a few farmers "living well and healthy" in the context of the whole region being devastated by the problem of good harvest but low prices.

In mid-October, hundreds of hectares of tomatoes in Da Lat were ready for harvest when the purchase price dropped to 500-1,000 VND/kg and it was not easy to sell. This forced many garden owners to dump ripe tomatoes, and many places destroyed their gardens and changed the crop varieties.

On the contrary, some farmers have learned from their experiences after unstable harvests, and have sought to cooperate with commercial enterprises to grow clean tomatoes according to prescribed quality standards. The output has been stable, and the prices have been outstanding. Specifically, in this crop year, farmers growing tomatoes in greenhouses according to VietGap standards have been sold at 13,000 VND/kg.

“I know, it's hard, but… I don't want to talk about it forever.”

Although the questions are still “I know, it’s hard, I keep saying it,” at this point, Mr. Dang Duc Thanh, Chairman of the Economists Club, Vietnam Chamber of Commerce and Industry (VCCI), still has to emphasize, “What does Vietnam need to do to save the agricultural sector? How to save agricultural production from the risk of stagnation? What to do to solve the risk of mass bankruptcy in the coffee industry… and then the prices of many agricultural products and foods fall dramatically, leading to losses for producers?...”

It is time to stop talking, Mr. Thanh proposed, the authorities need to urgently implement a detailed master plan for land and farming areas.

According to Mr. Thanh, this is one of the decisive measures to solve the problem of output for agricultural products through basic investigation, research on soil and land in each region, suitable for producing what plants and animals...

Based on scientific investigation and synthesis of output needs for export, domestic use needs, and national food security reserves needs, it is possible to establish a master plan for each region for key agricultural products, paying attention to soil quality analysis, building geological infrastructure technical maps, and on that basis, building agricultural land maps.

“Within a certain period of time (from 5 years) or when there are major fluctuations in the world agricultural market, it is necessary to adjust the planning of production areas of key agricultural products accordingly,” Mr. Thanh said.

High-tech agricultural and industrial cooperation

According to senior economist Truong Dinh Tuyen, promoting agricultural restructuring, associated with new rural construction, is a content that the Party has proposed quite early and the new rural construction movement has achieved some achievements.

“However, due to the important socio-political significance of agriculture, rural areas and farmers, Vietnam needs to make agricultural restructuring associated with new rural construction a key content of restructuring (along with the three key contents identified in the Resolution of the 3rd Central Conference),” said Mr. Tuyen.

Accordingly, Mr. Tuyen proposed that agricultural restructuring solutions should be carried out simultaneously in two directions. The policy aims to encourage land concentration according to different models and methods, depending on the characteristics of each locality, in order to create large, specialized commodity production areas. Thereby, bringing industry and science and technology into agricultural production, managing food quality and hygiene and safety, stabilizing supply, forming a value chain from farming, processing to circulation, ensuring reasonable distribution of benefits among the stages in that value chain.

Specifically, applying science and technology, especially biotechnology, information technology, farming techniques, and processing in agriculture, gradually forming high-tech industrial and agricultural complexes.

In addition, Mr. Tuyen also said that the Government needs to develop mechanisms to encourage businesses, including FDI (foreign direct investment) enterprises, to invest in agriculture and rural areas, in order to create many new industries and promote the shift in labor structure in agriculture and rural areas.

Agriculture attracts... "sharks"

Ms. Thai Huong - in addition to being known as the owner of the bank (Vice President and General Director of Bac A Bank) - is also known as a modern-day "farmer", Chairwoman of the Board of Directors of TH Group.

TH True Milk's application of high technology in production has improved farming efficiency, turning 1 hectare of land that previously yielded only about 70 million VND/year into a hectare of land that now yields from 500 million to 1.5 billion VND/year thanks to growing grass and sorghum using high technology. This is also a milestone marking the development of the dairy industry in Vietnam.

Recently, the fact that companies considered to be “sharks” in the industrial and financial sectors have shifted their investment to the agricultural sector is no longer just a phenomenon but is gradually becoming a trend.

Specifically, Thu Duc Housing Development Company chose to add a new business direction in agricultural and forestry products and fertilizers to supplement its main field. Hung Thuan Group (real estate and industrial park business) has expanded its investment to raising swiftlets, growing orchids, and raising fish. Tan Tao Industrial Group announced the establishment of a fragrant rice research and export company...

Chairman of Saigon Securities Company (SSI), Nguyen Duy Hung, assessed that in 2014 agriculture will be the most attractive investment channel, followed by consumer goods production.

Not just words, in recent years, SSI has invested heavily in the agricultural sector. At the end of 2013, the company signed a cooperation agreement with LR Group to mobilize and manage a closed-end fund with a scale of 150 million USD, specializing in investing in companies in the agricultural-food value chain in Vietnam and the Southeast region.

Assessing the domestic market as still endless, Mr. Hung emphasized, “Agriculture is Vietnam’s strength. With the mindset of people working in the global financial industry, we cannot miss the business opportunity, when the domestic market can be said to still be endless.”

According to Vietnam+