Restructuring the livestock industry: There's no more time for hesitation.

This was the assertion of Minister of Agriculture and Rural Development Cao Duc Phat when speaking about the urgency of restructuring the livestock industry in the face of a series of free trade agreements (FTAs) that have been and are about to be signed and come into effect.

Seen from the perspective of the chicken's "battle".

Since the end of December 2014, chicken farmers have not had a single happy day. The continuous price drops have overwhelmed them, forcing many households to close down their farms.

In Dong Nai province, in April 2015, the price of white-feathered chickens (also known as industrial chickens) was only 20,000 - 25,000 VND/kg, while the cost of raising them was 30,000 VND/kg. This meant that farmers were losing 5,000 - 10,000 VND/kg.

This is the commercial pig farming model of Mr. Tran Nghe Tinh's household in Cam Thang commune (Cam Xuyen district, Ha Tinh province).

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 considerable difficulties for poultry farmers. His company raises about 1 million white chickens, supplying approximately 10,000 chickens (both live and slaughtered) to the market daily. With losses of about 30% compared to production costs, farmers cannot sustain themselves for long. Explaining the sharp drop in chicken prices, Mr. Tuan attributed it to the excessive influx of imported frozen chicken into the domestic market.

While the recent price drop continues to shock and overwhelm poultry farmers, frozen chicken (allegedly imported from the US) has recently appeared on the market at very low prices. At Binh Dien wholesale market, imported frozen chicken is selling very well. This type of chicken is divided into many categories such as wings, legs, necks, thighs, bodies, and offal, and is packaged in varying quantities. Very few stalls sell whole chickens. What's noteworthy is that the imported frozen industrial chicken is incredibly cheap. Chicken thighs are the cheapest item, selling for only 20,000-25,000 VND/kg; chicken feet for 30,000-35,000 VND/kg; and chicken wings for 50,000-60,000 VND/kg. Meanwhile, fresh, domestically raised industrial chicken, sold whole, costs around 50,000 VND/kg. Other types of chicken are priced 30-50% higher than imported chicken.

Based on this situation, Mr. Duong Anh Tuan issued a warning: "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-feathered chicken and pork will also be impacted."

Currently, import tariffs on chicken meat into Vietnam are still quite high, ranging from 15% to 40%. However, once the FTAs ​​are signed and come into effect, the tariff rate will drop to 0%, and the damage to the livestock industry will be even greater if timely adjustments are not made.

A new trend is emerging.

Speaking at the Conference to review the implementation of the Livestock Restructuring Project and to deploy urgent tasks for the last six 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 yet seen a clear shift from areas with high livestock density (Red River Delta, Northern Midlands and Mountains, Southeast region) to areas with low livestock density (North Central region, Central Highlands).

Regarding poultry farming, according to the plan, the structure and scale of the chicken flock in the Red River Delta, the Northern Midlands and Mountains, North Central region, and the Mekong Delta will be maintained, and then expanded to the Central Highlands. However, currently, the chicken flock is trending downwards in the Red River Delta (from 28.54% in 2013 to 27.23% in 2014 and 25.64% in April 2015); in the Central Highlands, the chicken flock is trending upwards (from 5.5% in 2013 to 5.9% in April 2015); while other regions show no significant changes.

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

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

According to Mr. Van, there are some new developments in the restructuring of the livestock industry, namely FDI enterprises and international organizations continuing to invest in animal feed and breeding; domestic enterprises are also participating more strongly. For example, Austrex Group (Australia) is implementing a project to raise Australian beef cattle and building a beef cattle breeding area in Quang Ninh; the Netherlands is cooperating with Ha Nam province to build a dairy farming complex in Duy Tien district. While in 2013 there were only 58 animal feed factories and facilities under the joint venture or 100% foreign-owned model, this number has now increased to 61 out of 203 factories and facilities.

Following this trend, domestic businesses are also investing heavily in livestock farming. Notable examples include Hoang Anh Gia Lai, which has invested 11,300 billion VND in beef and dairy cattle farming; Dak Lak province, with 8 new projects launched totaling over 5,000 billion VND by local corporations and companies; and Binh Phuoc province, with 14 businesses approved by the Provincial People's Committee to invest in livestock farming, etc.

Fortunately, the structure of livestock production is rapidly shifting towards large-scale farms, households, and professional production; and more and more models of production linkages are emerging, such as contract farming, cooperatives, and closed-loop production chains. For example, in An Giang province, it is projected that about 1-2% of livestock farmers will switch to family farms, large-scale farms, and industrial-scale farming methods.

Boosting private investment attraction

Despite the emergence of many new trends, Mr. Van also acknowledged that the implementation of agricultural restructuring at the local level has been slow. To date, only 27 out of 63 provinces and cities have issued local agricultural restructuring plans and action plans, including livestock; many localities are still confused during implementation, failing to distinguish between the content and solutions of the restructuring plan. Livestock planning remains largely formalistic, not closely adhering to the content and objectives of restructuring. Policies supporting livestock development have not been effectively implemented, procedures are cumbersome, and have not been put into practice; investment in livestock development is still inconsistent, with very low investment levels in household livestock farming; most businesses and livestock farmers only focus on investing in areas and stages that yield easy profits such as animal feed and veterinary medicine, while there are still many shortcomings in breeding, slaughtering, and processing.

To accelerate the restructuring of the livestock industry, Mr. Van stated that the focus will be on several groups of solutions, including: perfecting livestock planning to align with the content and objectives of restructuring, ensuring the leveraging of each locality's comparative advantages in terms of natural, socio-economic, and environmental conditions; with the market being a crucial factor that needs careful consideration 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 the organization of production linkage chains.

Instead of the state directly supporting individual producers, it should provide support to businesses and cooperatives. Administrative procedures that burden businesses and citizens should be minimized, including unnecessary time and costs, primarily the time required for project appraisal and import customs clearance. The quality and safety of materials and livestock products, especially the quality of breeding stock and animal feed, should be well managed.

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

According to data from the General Department of Customs, in the first five months of 2015, Vietnam imported nearly $54 million worth of various types of chicken meat. Of this, imported American chicken accounted for 65% of the import value (approximately $34.8 million). The average price of American chicken is also very cheap compared to similar products from other countries. Specifically, frozen chicken wings from the US cost only $1/kg, and American chicken thighs cost only $0.90/kg.

According to kinhtenongthon