Farmers harvest pepper in the central province of Quang Tri. Falling productivity, disease and oversupply threaten the incomes of pepper growers. — VNA/VNS Photo Hong Hoa

HCM CITY (VNS)— Pepper farmers in Viet Nam have to pay more attention to sustainable farming as they face falling productivity, disease threats and an oversupply situation that will reduce prices and incomes, an expert has warned.

Do Ha Nam, head of the Viet Nam Pepper Association, said uncontrolled expansion of pepper farms in the country would lead to a sharp fall in prices as supply exceeds demand, the Viet Nam Financial Times (VFT) reports.

The sector has had a good year in 2012 with a bumper crop, export revenues up nearly 10 percent and prices up nearly 16 percent over the previous year, despite falling productivity.

Pepper yield will continue to fall this year and the coming years because of "inappropriate expansion of pepper farms," Nam said.

Rising pepper export prices for the past six consecutive years has motivated pepper farmers to expand cultivation, but poor cultivation methods and epidemics have affected productivity.

According to statistics compiled by the Viet Nam Pepper Association, Viet Nam harvested 125,000 tonnes of pepper in 2011, but this decreased to 115,000 tonnes last year.

The Ministry of Agriculture and Rural Development says the country exported 118,000 tonnes of pepper last year, earning US$802 million. This marked a decrease of 4.3 percent in volume, but an increase of 9.6 percent in value over the previous year.

The area under pepper cultivation, however, increased from 55,400ha in 2011 to 57,500ha last year. In 1995, the country had just 7,000ha under pepper cultivation. Zoning plans prepared by the Government envisaged the maximum area under pepper cultivation at 50,000ha.

The high prices pushed farmers to ignore the advice of local experts and focus on expanding their farms. This factor, and the fact that some of the pepper varieties used had no clear origins made the farms more susceptible to diseases.

The VFT cited a report prepared by the Ministry of Agriculture and Rural Development that said average pepper productivity last year fell to 2.4 tonnes per hectare from 3.5 tonnes in 2010.

Another problem is that Viet Nam has set a target of producing 150,000 tonnes of pepper by 2020. International experts are worried that consumption in the global market will be a problem.

The amount of pepper consumed annually in Viet Nam is around 4,700 tonnes. The rest must be exported, but pepper demand in the global market is only around 200,000 tonnes each year.

Nam said that in order to meet the future target of earning $1 billion from pepper exports, the agriculture ministry should set limits for pepper cultivation for the next five and ten years.

Viet Nam has been the largest pepper exporter in the world for several years now, contributing 50 percent of the spice consumed in the global market.

Major buyers of Vietnamese pepper are the US, Germany and the United Arab Emirates.

Viet Nam expects to harvest about 100,000 tonnes of pepper in 2013, lower than in the previous two years despite the increase in cultivation area, the VFT report said. — VNS