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Strategy tries to link economic sectors

Update: February, 22/2012 - 10:55

HCM CITY — The Government needs to have a long-term strategy to develop linkages among farmers, business people, scientists and the State in managing the supply of key agricultural items.

Linkages among these four segments of the economy would help improve the competitiveness of Vietnamese agricultural products in the international market, according to Do Van Nam, head of the Ministry of Agriculture and Rural Development's Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

Nam spoke at a seminar held yesterday in HCM City by the Ministry of Industry and Trade's Domestic Market Department in collaboration with the Multilateral Trade Assistance project (EU-Vietnam MUTRAP III).

Nam said the Government should develop detailed policies on land use, production scale, infrastructure investment, science and technology application, investment levels and credit preferences.

He said it was also necessary to develop strict measures to minimise unilateral termination of contracts.

With such policies, linkages among sectors to supply agricultural products would be sustainable, and the "trial linkage model" would become obsolete.

The Ministry of Agriculture and Rural Development has drafted a plan which is set to go before the Government to replace Decision No 80/2002/QD-TTg issued in 2002 on encouraging the sale of agricultural products by contract and creating linkages among the four sectors to ensure sustainable production.

"There is also a need to ensure mutual benefits among all participating sides, especially among raw-material collectors, scientists and banks," he said.

"Linkage among the four sectors in supplying agricultural products brings stable consumption and production, increases quality step by step, and enhances the prestige of agricultural items in the domestic market as well as overseas," he said.

Tran Nguyen Nam, deputy head of the Ministry of Industry and Trade's Domestic Market Department, said: "Linkage among the four sectors would balance supply and demand and improve quality management, as well as price stabilisation."

As a result, distributors, processors and buyers would be active in making business plans and expanding production scale.

In the near future, ministries and local authorities plan to create favourable conditions to support the development of linkages among the four sectors to stabilise the market.

The prices of agricultural products in the past few years have fluctuated strongly, as reflected in increases in the country's Consumer Price Index.

Weather, disease and world market fluctuations were contributing factors, affecting price hikes on food, pork, rice and fertiliser.

Le Ngoc Dao, deputy director of HCM City Department of Industry and Trade, said the city had given loans to HCM City businesses that collaborate with other companies in neighbouring provinces to create clean-food sources.

In the past, city businesses co-operated in husbandry, production and distribution network development, with neighbouring provinces providing a large quantity of agricultural products to customers.

For instance, pork supply was 10,156 tonnes last year, an increase of 89 per cent compared to 2010, while poultry was 46,601 tonnes, an increase of 19 times. The number of poultry eggs reached 196 million, an increase of 15 per cent.

HCM City authorities plan to develop policies that will strengthen linkages among the four sectors and expand the distribution network system to other provinces.

At the seminar, representatives from Vissan, Sai Gon Co.op and PetroVietnam Fertilizer and Chemicals Corporation's Phu My Urea Plant spoke about their experiences in linking the four sectors to ensure the quality of goods.

Nam said the biggest challenge to improve linkages was the small scale of agricultural production. Because of their small sizes, these companies often find it difficult to sign contracts with households.

In addition, smaller businesses made less use of scientific and advanced technology application and infrastructure investment, leading to unequal quality and unexpected prices, he said. — VNS

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