Restructuring the livestock industry: No more time for hesitation

That was the affirmation of Minister of Agriculture and Rural Development Cao Duc Phat when talking about the urgency of the task of restructuring the livestock industry on the threshold of a series of free trade agreements (FTAs) that have been and are about to be signed and are about to take effect.

View from the "fight" of the chicken

Since the end of December 2014, chicken farmers have not had a single happy day. The continuous price “shocks” have left them with no strength to cope, and many households have had to “hang up” their coops.

In Dong Nai, in April 2015, the price of white feather chicken (also known as industrial chicken) was only 20,000 - 25,000 VND/kg, while the cost of raising chicken was 30,000 VND/kg. This means that farmers suffered a loss of 5,000 - 10,000 VND/kg.

Commercial pig farming model of Mr. Tran Nghe Tinh's household, Cam Thang commune (Cam Xuyen - Ha Tinh).

Mr. Duong Anh Tuan, Director of Binh Minh Livestock Company (Trang Bom, Dong Nai) said that in recent months, chicken prices have continuously dropped sharply, causing many difficulties for farmers. Mr. Tuan's company raises about 1 million white chickens, supplying about 10,000 chickens (feathered chickens and slaughtered chickens) to the market every day. With a loss of about 30% compared to the cost price, farmers cannot hold out for long. Explaining the problem of chicken prices falling sharply in recent times, Mr. Tuan said that it was because too much imported frozen chicken flooded the domestic market.

While the price drop still leaves farmers shocked and unable to recover, in recent days, frozen chicken (supposedly imported from the US) has appeared on the market at very cheap prices. At Binh Dien wholesale market, frozen chicken imported from abroad is selling very well. This type of chicken is divided into many types such as wings, legs, necks, thighs, bodies, organs... and is packaged in different quantities. Very few stalls sell whole chickens. It is worth mentioning that imported frozen industrial chickens are extremely cheap. Chicken thighs are the item sold at the lowest price, only 20,000 - 25,000 VND/kg; chicken legs 30,000 - 35,000 VND/kg; chicken wings 50,000 - 60,000 VND/kg. Meanwhile, fresh industrial chickens are raised domestically and sold whole for about 50,000 VND/kg. Other types are priced 30 - 50% higher than imported chicken.

From this situation, Mr. Duong Anh Tuan warned: "If frozen white chicken products continue to be imported in large quantities into the domestic market in the coming time, it is certain that not only domestic white chicken will be severely affected, but other products such as colored chicken and pork will also be affected."

Currently, the import tax rate on chicken meat into Vietnam is still quite high, from 15 - 40%. But when the FTAs ​​are signed and come into effect, the tax rate will be only 0%, the damage to the livestock industry will be much greater if there is no timely adjustment.

New trend emerges

Speaking at the Conference to evaluate the implementation of the Project on restructuring the livestock industry and deploy urgent tasks for the last 6 months of the year, Mr. Hoang Thanh Van, Director of the Department of Livestock (Ministry of Agriculture and Rural Development), said: Pig farming has not had a clear shift from areas with high livestock density (Red River Delta, Northern midlands and mountains, Southeast) to areas with low livestock density (North Central Coast, Central Highlands).

Regarding chicken farming, according to the project, the structure and scale of chicken flocks in the Red River Delta, the Northern Midlands and Mountains, the North Central Coast and the Mekong Delta will be maintained, then expanded to the Central Highlands. However, currently, the chicken flock tends to decrease in the Red River Delta (from 28.54% in 2013 to 27.23% in 2014 and 25.64% in April 2015); the chicken flock in the Central Highlands tends to increase (from 5.5% in 2013 to 5.9% in April 2015); while other regions have not had significant fluctuations.

Beef cattle farming is developing strongly in the provinces of the Central Coast (Ha Tinh, Nghe An) and is developing in the Central Highlands. Dairy cattle herds are developing strongly in Moc Chau (Son La), Ba Vi (Hanoi), Lam Dong, etc., which are traditional farming areas.

During the restructuring process, localities have encouraged the development of appropriate livestock farming systems for livestock and poultry; focusing on shifting from small-scale farming to concentrated farming on a farm or ranch scale or maintaining household farming but applying high technology. The number of livestock farms increased from 9,377 farms (2013) to 9,897 farms (2014). Nationwide, 186 livestock farming models applying VietGAP have been certified.

According to Mr. Van, there are some new changes in the process of restructuring the livestock industry, that is, FDI enterprises and international organizations continue to invest in the field of animal feed and breeds; domestic enterprises are also participating more strongly. Typically, Austrex Group (Australia) is implementing an Australian beef cattle breeding project and building a beef cattle breeding area imported from Australia in Quang Ninh; the Netherlands is coordinating with Ha Nam province to build a dairy cattle breeding complex in Duy Tien district. If in 2013 there were only 58 factories and animal feed production facilities in the form of joint ventures or 100% foreign capital, now it has increased to 61/203 factories and facilities.

Not out of this trend, domestic enterprises also strongly invest in livestock farming, including Hoang Anh Gia Lai investing in raising beef and dairy cows with a total investment of 11,300 billion VND; Dak Lak province has 8 new projects put into implementation with a total investment of over 5,000 billion VND invested by corporations and companies in the area; Binh Phuoc province has 14 enterprises approved by the Provincial People's Committee to invest in livestock farming,...

The good news is that the livestock production structure is rapidly shifting towards farms, large households, and professional households; more and more linkage models in production such as livestock processing models, cooperatives, and closed production chains are emerging. For example, in An Giang, it is expected that about 1-2% of livestock households will switch to livestock farming in the form of family farms, farms, and industries.

Promote attracting private investment

Although many new trends have emerged, Mr. Van also admitted that the implementation of restructuring in localities is still slow. Up to now, only 27/63 provinces and cities have issued Projects and action plans for restructuring local agriculture, including livestock; many localities are still confused in the implementation process, unable to distinguish the content and solutions for implementing the restructuring project. Livestock planning is still heavy on formality, not closely following the content and goals of restructuring. Policies to support livestock development have not been effectively implemented, procedures are still cumbersome, not yet put into practice; investment in livestock development is still not synchronous, the investment level in the household livestock sector is still very low; most businesses and livestock farmers only focus on investing in profitable fields and stages such as animal feed, veterinary medicine, while breeding, slaughtering, and processing still have many shortcomings.

To promote the restructuring of the livestock industry, Mr. Van said that he will focus on a number of groups of solutions such as: Completing livestock planning in line with the content and objectives of restructuring, ensuring the promotion of comparative advantages of each locality in terms of natural conditions, socio-economics and environment; in which the market is an important factor that needs to be carefully considered in livestock development planning options. Adjusting the structure, improving the efficiency of public investment and strongly attracting private investment, encouraging businesses to invest in livestock through organizing production chains.

Instead of the state directly supporting individual producers, it should support enterprises and cooperatives. Minimize administrative procedures that cause inconvenience to enterprises and people, including issues of time and inappropriate costs, first of all the time for project appraisal and customs clearance of imported goods. Manage well the quality and safety of materials and livestock products, especially the quality management of breeding animals, animal feed, etc.

Minister of Agriculture and Rural Development Cao Duc Phat said that there is no more time to hesitate in the task of restructuring the livestock industry. “When the FTAs ​​are signed, we will also become a free market, at that time there will be many extremely strong competitors. Implementing urgent solutions to restructure the livestock industry is not for export anymore but to stand firm at home.”

According to the General Department of Customs, in the first 5 months of 2015, Vietnam imported nearly 54 million USD worth of chicken meat of all kinds. Of which, imported US chicken meat accounted for 65% of the import value (about 34.8 million USD). And the average price of US chicken is also very cheap compared to similar products from other countries. Specifically, frozen US chicken wings cost only 1 USD/kg, US chicken thighs cost only 0.9 USD/kg.

According to kinhtenongthon