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Wednesday, November 30, 2022

It’s time to find the way home

By Tan Duc

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If the State really wants to help farmers free themselves from the vicious circle of unstable export outputs, it should take action now so that we can nurture hopes that in, say, five or 10 years, Vietnam’s agriculture will become fully mature. Otherwise, it will forever be dependent upon overseas outputs. Oddly enough, the big and stable market inside the country remains untouched!

When Vietnamese were counting down together with the world to welcome the New Year, more than 5,000 containers of Vietnamese farm produce still got stuck along the northern border gates desperately hoping to be cleared to be imported to China. To the business people and farming households relevant to these containers, in place of the New Year celebration was worries about not only the fate of their goods stranded at the border gates but also an imminent crop failure looming large.

Although China is among Vietnam’s largest agricultural export markets, she is also plagued with unpredictability. Sadly, Vietnam’s farm produce export has totally depended on that market which is precarious not only because of market reasons but also other unknown factors. When the way to China is blocked, it also means farm products of hundreds of thousands of Vietnamese faming families are dramatically affected.

For decades, it has been known that as long as Vietnamese unprocessed farm produce still goes straightly from fields in Vietnam to dining tables of the Chinese beyond the border, we are beset by considerable worries.

Processing agricultural products is the right way to sustainable development and the best measure for stabilizing the output. Although that is a known fact, it has not been tackled effectively. Why so?

Many have opined that Vietnam’s farm produce processing industry remains underdeveloped and that investment is desperately needed so that it can become a springboard for farmers’ commodities. However, it is not quite so. Don’t ignore the fact that Vietnam’s farm produce processing sector has to spend tens of billions of U.S. dollars every year importing raw agricultural materials.

According to statistics obtained from the General Department of Vietnam Customs, from early last year to December 15, 2021, Vietnamese businesses paid almost US$13 billion to ship in cashew nuts, corn, soy beans and other materials for animal feed manufacturing. When it comes to volume, cashew nuts, corn and soy beans alone accounted for nearly 14.5 million tons.

These few figures may clearly show that Vietnam’s farm produce processing industry is big enough to process all the agricultural products grown by compatriot farmers because its processing capacity is even larger than the production of the domestic agricultural sector. Therefore, the crux of the matter is not a shortage of markets but the inability to provide what markets are in need of.

That absurdity must have been known well by the Government and leaders of the agricultural sector as well as farmers. The problem is the production prices of many domestic agricultural products are way too high while those of import counterparts are much cheaper. The General Department of Vietnam Customs’ statistics also indicate that the import price of corn to Vietnam was US$286 per ton on average. Likewise, the price of imported soy beans was US$584 per ton and cashew nuts was US$1,483 per ton.

Therefore, considering the low import prices, persuading Vietnamese farmers to switch to planting corn, soy beans or cashew nuts to compete with imports is simply unrealistic.

To enable the agricultural industry to step by step return home, or satisfy the domestic market, to avoid overdependence on precarious markets—China is an example—policies formulated by the State are a prerequisite. First off, bigger investment must be pooled to research projects on cultivars and cultivation techniques so as to improve productivity and product quality. Also, development of agricultural products which may supplant material imports used for animal feeds must be spurred. Last but not least, the State should come up with a policy effective enough to promote businesses to use local farm produce for their input materials in place of imported counterparts.

This is definitely a hard problem which cannot be solved overnight. However, if the State really wants to help farmers free themselves from the vicious circle, it should take action now so that we can nurture hopes that in, say, five or 10 years, Vietnam’s agriculture will become fully mature. Otherwise, it will forever be dependent upon overseas outputs. Oddly enough, the big and stable market inside the country remains untouched!

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