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VN faces tougher competition with global integration

Update: August, 24/2015 - 09:28

Dang Kim Khoi, Acting Director General of the Institute of Policy for Agriculture and Rural Development, spoke to Hai quan (Customs) newspaper about the challenges

Viet Nam is an agriculture country, but it has to import quite a lot of raw agricultural materials to manufacture products for export, including animal feed. This is an unacceptable paradox! What's your point of view on this issue?

I don't think it is a paradox. It is a normal thing in the rule of supply and demand.

The world economy nowadays is open, so import and export activities or trade in general is based on each country's comparative advantages. In the case of Viet Nam, exporting rice, aqua products, timber and fruits are our comparative advantages. So, we should utilise the surplus we gain from exports to compensate for imports.

More recently, many people have expressed their concern about the decline in the export value of rice, rubber and others while the import value of raw materials for manufacturing animal feed is increasing considerably.

In my opinion, this is an issue that requires the Ministry of Agriculture and Rural Development and other concerned agencies to conduct a study to find out what are the reasons causing the decrease in the export value versus the import value.

Recently, Viet Nam has imported quite a lot of soybean for manufacturing animal feed. This is easy to understand as our climate is not suitable for soybean. For the case of maize, I think there is still room for us to increase the maize growing area, particularly if Viet Nam grows genetically modified maize.

However, in the case of importing timber to manufacture export products, I think this is a good sign since Viet Nam is good at timber processing. In addition, wooden furniture is one of Viet Nam's strong export products. So if Viet Nam has to import raw materials and turns into a world "workshop," I think we should do it. This is a proper way for us to utilise people with high skills to produce high value added products. China is a good example for us to learn from. They import a lot of raw agricultural materials to produce products for exports.

In your opinion, what's the biggest concern in the import-export of agriculture products in Viet Nam at present?

I think the weakest point in our exports at present is that we mainly export raw materials with low value and weak comparative advantages.

A very important principle in securing a sustainable exporting market for agricultural products is that the products must have lower production costs compared with those produced by foreign competitors. Another important characteristic is that we should export special products that no other countries grow or produce. For example, Viet Nam is a tropical country, so we should export our special products to Northern Europe, the USA, Canada and others. Of course, the products must meet their quarantine requirements and be of high quality.

Regarding imports, I think, we can import a variety of raw materials for production, but priority should be given to importing seeds. A critical issue facing Vietnamese producers is that they don't have sufficient information about the seeds nor the access to high quality seeds. This has led to the problem that the producers don't have a choice to select the best seeds they want. They rely totally on local suppliers. As a result, every few years they have to buy the new seeds as the old seeds degrade.

In the long run, we should invest more on the research for high yield seeds and good breeds of domestic animals.

Viet Nam's economy has deeply integrated into the world economy and has signed and will sign a number of Free Trade Agreements with many countries, including the Trans Pacific Partnership (TPP) Agreement. How will these agreements affect our agricultural import-export activities?

During the course of international integration, husbandry is the sector that will face many challenges. As we all know, our husbandry industry is very weak, right in our domestic market, let alone the regional or world market. A big quantity of foreign meat has been imported into Viet Nam.

For example, in recent years, chicken and pork from Thailand are sold widely in Vietnamese super-markets. And in a near future, when the TPP agreement is signed, our beef or dairy products will face a very tough competition with those from Australia, New Zealand while our pork will have to compete with imported pork from the US. But, we still have from five to seven years ahead to build and consolidate the husbandry industry in our own market before these FTAs or TPP come into force.

However, these agreements will present more opportunities to Viet Nam, particularly agricultural products and fisheries. Further more, it will all depend on Vietnamese companies' ability to seize these opportunities or not.

In my opinion, the Ministry of Agriculture and Rural Development should work closely with the Ministry of Trade and Industry, the Ministry of Planning and Investment and the Ministry of Science and Technology to help our agriculture sector to develop professionally and scientifically. Of course, the government should play the role as the "director" in the co-ordination between ministries and sectors. — VNS



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