VN agricultural products need emergency aid

VietNamNet Bridge - Although the export turnover of agricultural - forestry – fishery products in the past four months reached $9.13 billion, a series of export items, which are considered Vietnam's strengths, saw a strong downward trend.

VN agricultural products need emergency aid

Specifically, rice exports fell 9.2% in value, coffee with 39.3% fall in value and 41% in volume, pepper 25% in volume, and seafood 16.6% in volume.

Unfavorable exchange rates, market difficulties, high production costs, and narrowed outlets are the problems facing by agricultural, forestry and fisheries enterprises of Vietnam. They have asked for assistance from the Government and the Ministry of Industry and Trade.

The Ministry of Industry and Trade on May 4 held a conference to seek solutions for agricultural-forestry-fishery products.

At the conference, the Ministry of Industry and Trade showed the panorama of Vietnam’s exports in the January-April period, which was quite gloomy.

Of the total $50.1 billion of export turnover in the first four months of 2015, $8.5 billion came from agricultural and aquatic products, down 5.1% over the same period of 2014. In particular, fisheries saw the biggest drop with 15%, forest products decreased by 6.6% and agricultural products 5.1%.

Difficulties related to the market, especially the fluctuation of the VND/USD exchange rate, are the main reasons for the fall of agricultural exports to major markets of Vietnam.

Deputy Secretary General of the Association of Vietnam Seafood Exporters and Processors (VASEP) Nguyen Hoai Nam said that the two major export items of Vietnam - shrimp and catfish – to the US market were strong competition by Thailand and India.

Additionally, both shrimp and catfish of Vietnam are at a disadvantage as the US imposed higher anti-dumping duties. More than 90% of the seafood export contracts of Vietnam use the US dollar in payment. The exchange rate between USD and Euro or Japanese Yen has increased strongly so importers have forced Vietnamese exporters to constantly reduce prices, while the cost of domestic production and imports of raw materials have not reduced.

Nam also said that the shrimp farming area is declining, signaling a decrease in export volume from the third quarter 2015 while many shrimp breeders have no more output.

To save seafood exporters, Nam proposed to the State Bank of Vietnam to reduce interest rates below the current rate of 7.5%.

The General Secretary of the Vietnam Coffee Association Nguyen Viet Vinh said: "In the context of the coffee market with a shortage of supply, the prices are still falling, and adjusting exchange rates is a solution to save the coffee industry.

“Brazil, the largest coffee exporting country in the world, has lowered the exchange rate, and Indonesia also has done the same. If Vietnam does not follow the trend, Vietnamese enterprises will suffer."

Market for agricultural products

Recently, the Ministry of Agriculture and Rural Development held three conferences to discuss solutions to rescue agricultural products, to create a link between production and market.

Deputy Minister of Industry and Trade Tran Tuan Anh said the system of Vietnamese commercial counselors in other countries does not work well to open markets for Vietnamese products.

Chu Son Ai, director of a tea export firm, said the biggest difficulty is seeking foreign markets.

Concerning the opening of markets for Vietnamese vegetable and fruits, Le Van Anh, Deputy Chair of the Vietnam Fruit and Vegetable Association, said that Vietnam has not effectively carried out market promotion. For example, Russia is defined as a potential market, but trade promotion campaigns in Russia have not been organized frequently.

Regarding exports of watermelons to China, the Vietnam Fruit and Vegetable Association repeatedly proposed to relevant ministries to negotiate with the Chinese side and open more border gates during the peak season for fast customs clearance.

Nguyen The Nang, CEO of the Southern Food Corporation (Vinafood 2), said the traditional markets for Vietnamese rice have saturated. The permanent solutions for Vietnamese rice remain reorganizing of production and logistics services, market diversification and variety restructuring.

To promote exports, state agencies and enterprises have much work to do.

According to the Ministry of Industry and Trade, seafood export in the first quarter of 2015 to major markets fell sharply over the same period. Export revenues to the US market reached $260 million, down 33.8%; Japan $192.7 million, down 15.1%; South Korea $118.8 million, down 5.2%; Australia $36.5 million, down 31.3%; the EU 11%. Rice exports to the Philippines also fell 41%, China 45%, Hong Kong (China) 41.2%.

Coordination among state agencies will help

Deputy Minister of Industry and Trade (MoIT) Tran Tuan Anh said that his ministry is in charge of market promotion but this agency cannot do this task alone, and it needs collaboration with the Ministry of Agriculture and Rural Development (MARD), based on the general plan.

MARD only focuses on agricultural output and MoIT pays attention to value, while exporters are interested in profit only. These groups need exchange of information and policies for the development of Vietnam’s agriculture, said VASEP Vice Chair Nguyen Huu Dung.

Mekong Delta: big investments made in agriculture but farmers still poor

Outstanding loans for agriculture in the Mekong Delta reached about VND163 trillion, an increase of nearly 2% from the end of 2014, accounting for 22% of total outstanding loans to agriculture and rural areas across the country and over 46% of the total loans for the region.

Of which, loans for production and consumption of seafood and rice were VND59,586 billion. Most of the major banks in Vietnam are present in the area. These are figures recently announced by the State Bank of Vietnam (SBV).

Vo Minh Tuan, Deputy Director of SBV’s Credit for Economic Sectors, said the banking sector’s effort had contributed significantly to creating positive change of the Mekong Delta economy, particularly the development of aquaculture and aquatic product processing, the change of crop and livestock structure, and mechanization to increase productivity and product quality.

However, Nguyen Huu Nghia, SBV chief inspector, said that although huge capital has been poured into the region, the results are not commensurate with the potential due to incompetent policies, the small scale of agricultural production and poorly trained labor.

Compiled by Mai Nguyen

VN agricultural products need emergency aid