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VN still to add value to key export items

Update: March, 10/2014 - 08:51

Plantation workers harvest coffee beans in the Central Highlands city of Buon Me Thuot. Export prices of Vietnamese coffee are $50-70 per tonne lower than other countries. — VNA/VNS Photo Tran Viet

HA NOI (VNS) — Viet Nam's failure to exploit economies of scale and ensure consistent quality of its produce has prevented it from adding value to key agriculture export items, experts say.

The nation should identify what needs to be done to achieve a "breakthrough" that adds export value to each and every agricultural product, Vietnamese and South Korean experts say in a recently released report.

The report on the 2013 Knowledge Sharing Programme (KSP) carried out by both countries noted that the export value of Viet Nam's farming produce has increased sharply in recent years from US$13-14 billion in 2009 to $27.5 billion in 2013.

The programme aims to provide lessons for Viet Nam on joining global supply chains, based on South Korean experiences.

The report says that the sharp increase in export value indicates increasing competitiveness of Viet Nam's agricultural produce, but says the country has not been able to exploit its full potential.

It notes that coffee and some other farm produce are exported to many foreign markets, but export prices of Vietnamese coffee are $50-70 per tonne lower than the produce of other nations due to inherent weaknesses in the sector.

The Thoi bao Kinh te Viet Nam (VnEconomy) newspaper cites Yong Teak Kim, a representative of the Chonnam National University, as saying at a conference held in Ha Noi last Thursday, that coffee, rubber and shrimp are three of Viet Nam's key export products, but they have not joined the global supply chain.

Kim said that this has happened because of small-scale production and a lack of quality control for export products.

Viet Nam has great potential in increasing agricultural export value, but the local farming industry has developed its exports of farming products based upon raw materials, low technology and products without trademarks, even for the three key high value ones, Kim said.

Stretched thin

The report says that another key export industry, rubber, is hampered by the lack of capital and land for expanding plantations. The absence of a comprehensive development plan for the industry is another reason Vietnamese rubber products are not being sold in large markets like Europe.

Meanwhile, Viet Nam's fisheries industry has not properly developed intensive cultivation or disease control mechanisms that can increase the value of Vietnamese shrimp, which is currently not selling at high prices in the world market, the report says.

Kim advised Viet Nam to develop its agricultural sector using advanced technology to offer products of higher quality and value. If the Government focuses on the agricultural sector's participation in the global value chain, Viet Nam's economic development would remain sustainable in the years ahead, he said.

The state should also focus on boosting research and development in the agricultural sector, a system for controlling diseases and an effective credit system, Kim said.

Viet Nam needs to have production based upon specific contracts, and the model of the Public Private Partnership (PPP), creating cooperation between the Government and companies, would promote further investment in coffee, rubber and shrimp sectors, he said.

Meanwhile, a system controlling the quality of products should be developed to meet the demand of local and foreign customers.

Nguyen Sy Dong, head of Production Industry Development from the Institute for Development Strategy, said Viet Nam should define which stages are important to increase value and create solutions to assure efficient and sustainable development of the value chain.

The KSP covers four areas: the national energy policy; joining the global supply chain; social housing development; and developing the Law on Environmental Protection.

According to the Institute for Development Strategy, the RoK's experience and recommendations will be useful in building a socio-economic development strategy for Viet Nam.

In the coming years, more topics are set to be added to the programme.

The KSP was launched in 2004 by the RoK's Ministry of Strategy and Finance, with the purpose of sharing the country's experience with developing nations. — VNS

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