June 29, 2022 | 12:16 GMT +7

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Friday- 15:34, 24/06/2022

Agricultural production planning in Vietnam needs to be less restrictive

(VAN) Ms. Carolyn Turk - World Bank Country Director for Vietnam commented in an interview with the Vietnam Agriculture Newspaper.
Ms. Carolyn Turk - World Bank Country Director for Vietnam. Photo: WB.

Ms. Carolyn Turk - World Bank Country Director for Vietnam. Photo: WB.

"Farmers must be given the opportunity to flexibly convert to alternative crops based on their comparative advantage and market demand", suggested Ms. Carolyn Turk.

Vietnam needs to promote the "green, clean and safe" brand

The agricultural sector has always been in search of solutions to overcome the challenge of fragmented, small and spontaneous production. In your opinion, what is the solution to this problem?

Undeniably, one of the main challenges affecting agricultural efficiency in Vietnam is the fragmentation in the production system. Our analysis shows that Vietnam has one of the most fragmented agricultural lands in the Southeast Asia, with over 65% of farmers owning less than one hectare of agricultural land.

In addition, farmers are not linked to form production groups, cooperatives or partnered with businesses to strengthen agricultural value chains. Moreover, their production methods are not sustainable. Namely, farmers tend to overuse inputs such as fertilizers, pesticides and water to maintain high yields.

These practices have raised concerns about food safety and negatively impacted the environment. The fragmented production system also leads to inconsistent product quality, small economic scale and high transaction costs - thereby limiting farmers' capacity to gain access to favorable market.

There are many ways that the issue of production fragmentation can be resolved. Firstly, the Government should encourage and support farmers to form production groups and/or cooperatives to collectively deploy and coordinate production methods that meet market standards. There should also be an incentive mechanism to promote and support the cooperative model. In countries such as China, the adoption of group production helps farmers integrate seamlessly into organized supply chains.

Secondly, there should be training programs to support capacity building for cooperatives, with emphasis on cooperative management team. Thirdly, the concentration of land will improve the economic scale, mechanization and the provision of other input services (e.g. spraying, seeding, harvesting, etc.).

Last but not least, agricultural production planning in Vietnam needs to be less restrictive, allowing farmers to flexibly convert to alternative crops based on their comparative advantage and market demand, with support from the Government and the private sector in research and development.

Vietnam's agricultural products have reached over 190 countries and territories. However, the value of Vietnam's agricultural products is relatively low and products are  mainly exported through intermediaries. What lessons can you share to help Vietnamese agricultural products build and affirm their brands in the international market and establish a position in the high-value segment?

Yes, Vietnam is one of the major suppliers of agricultural products in the world in terms of volume, not value. This is because Vietnam mainly supplies unprocessed or low quality products to the international market.

Although Vietnam is the third largest rice exporter, providing nearly 10% of the rice output supplied to the international market; in terms of export value, Vietnam only ranks 10th. Despite improvements in the quality of rice produced at the household level in the last ten years thanks to the adoption of high quality rice varieties and good production practices; there is still no Vietnamese brand that is considered a green, clean and safe product. This has negatively impacted many value-added benefits of Vietnam.

Vietnam needs to develop and apply standards for all important national commodities, in line with international standards on food safety, environmental sustainability and national commitments on greenhouse gas emission reduction. 

An increasing number of importing countries, especially European countries, are raising their sustainability standards and setting requirements for green and cleaner products, so Vietnam needs to rebrand its products as "green, clean and safe". Vietnam can learn from many models of countries around the world.

Looking for new sources of growth

One of the important goals in Vietnam's Sustainable Agriculture and Rural Development Strategy for the period of 2021 to 2030, with a vision towards 2050 is that: "By 2030, the rural residents' income will be twice or thrice that of 2020”. In your opinion, can Vietnam achieve this goal? How can we increase income for farmers when agricultural land is shrinking to make room for urbanization?

First of all, I would like to congratulate Minister Le Minh Hoan for paving the way for the Sustainable Agriculture and Rural Development Strategy for the period of 2021 to 2030, with a vision towards 2050. This strategy will contribute to transforming agriculture following a green, low-carbon route.

The World Bank believes that agriculture in the future must achieve productivity growth while promoting adaptation and resilience to climate change as well as reducing greenhouse gas emissions.

Farmers cultivating organic oranges in Tan Lac district, Hoa Binh province. Photo: Tung Dinh.

Farmers cultivating organic oranges in Tan Lac district, Hoa Binh province. Photo: Tung Dinh.

With the strategy approved by the Ministry of Agriculture and Rural Development, Vietnam will become a pioneering countries in promoting sustainable agricultural and rural development. Productivity growth is essential to maintaining high labor productivity, supporting comprehensive poverty alleviation, and  ensuring that agricultural and rural areas remain pressing matters in the face of urbanization and economic growth.

However, higher productivity is only significant when it is coupled with increased adaptability, resilience and reduced greenhouse gas emissions. Therefore, accelerating productivity growth, improving adaptability and promoting low-carbon production practices are key to sustainable agricultural and rural development.

New sources of growth need to be identified, including the application of modern technologies, precision agriculture and digital technologies, which will also help increase efficiency. Strengthening the agricultural value chain and adding value will also help improve product quality and value, reduce production and transaction costs, as well as increase income for farmers.

And to ensure comprehensiveness and sustainability, the digital distance needs to be addressed between rural and urban areas and between tech-savvy households and outdated farmers.

Can you share the key priorities in the cooperative relationship between the World Bank and Vietnam in the future regarding agriculture, farmers and rural development in Vietnam?

The World Bank and Vietnam have always maintained a close cooperative relationship. We are proud to have made many contributions to Vietnam's economic growth over the past decades, including remarkable achievements in Vietnam's agricultural transformation, from food insecurity to being self-sufficient and later, one of the world's largest food suppliers within just a few decades.

We are developing a Country Partnership Framework (CPF) for the period of 2022-2025 based on the priorities of the Government of Vietnam and the World Bank. In the immediate future, we will focus on supporting green growth, in line with the Government's goal of reducing carbon emissions and achieving neutral carbon level by 2050.

In the agricultural sector, the World Bank's support will focus on promoting green, low-carbon agricultural production practices, with focus on rice production and livestock production, to reduce greenhouse gas emissions. The World Bank also provides support for crops and fruit trees to enhance carbon sequestration and storage capacity.

We will also support the Government in implementing policies and investment programs to promote resilience and improve the resilience of the agricultural systems, food systems, and agro-environmental in face of climate change. As a long-term and reliable partner of Vietnam, we are committed to supporting Vietnam's agricultural sector so that Vietnam can become a high-income country by 2045.

The World Bank and IFC will also continue to coordinate with MARD to organize High Level Policy Dialogues and provide Vietnam with world experience and knowledge to address the challenges outlined above. We will also build a forum for education and debate among stakeholders, including the private sector.

Thank you!

Author: Dong Thai

Translated by Nguyen Hai Long

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