Opportunities for Vietnamese agricultural products during the Covid-19 pandemic

"The Covid-19 pandemic has affected many areas of social life but also brought new opportunities for Vietnamese agricultural products. The thing is that what should we do to speed up the restructuring process of supplying chain ”, said Mr. Hoang Vu Quang, Deputy Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).

Mr. Quang spoke at a workshop titled Opportunities and Challenges for Trade of Vietnam's Agricultural Products in the Context of Covid-19 held on the morning of April 27.

The world's agricultural exports showed signs of decreasing since 2019. The Covid-19 pandemic started to spread out in early 2020, resulting in a dramatic change for the global agricultural market. According to the IPSARD, about 60 countries have adjusted their agricultural trade policies to respond to the pandemic, including the US, China, Russia, India, and South Korea.

 Grain is a commodity getting particular concern during the pandemic because it is regarded as a factor that helps stabilize food security. The grain price index has increased sharply since the end of 2020, leading to a rise in the food price index.

In such a context, Vietnam got an increase in rice exports but a decrease in seafood and fruit exports. Ms. Do Lien Huong from the IPSARD said: "Trade of agricultural products has decreased, but lower than general trade, and kept a surplus at USD10 billion ".

According to Ms. Huong, Vietnam currently does not have a separate support policy for agriculture. This places the sector in many big challenges, especially when demand from familiar customers such as China and the US tends to decrease.

In October and November of 2020, the IPSARD conducted researches on three good categories of rice, seafood, and fruit targeting three subject groups of state management agencies, businesses - cooperatives, and farmers in seven cities and provinces of Hanoi, Ho Chi Minh City, Soc Trang, Can Tho, An Giang, Dong Thap, and Ca Mau.

The results showed that the two groups of businesses and farmers had common difficulties due to a lack of information. They also faced obstacles in accessing sources of support from the State. According to Official Letter 860/BHXH-BT, a condition for enterprises to benefit from support is that 50% of their employees who are entitled to social insurance premiums, quit their jobs or the enterprises lose 50% of the total value of assets due to pandemic.

"But in fact, if the business enterprises meet this condition, they almost go bankrupt", Ms. Huong stressed.

For the farmers, the IPSARD said that each of them currently has only about half a hectare of cultivated land, the lowest in the world.

"The pandemic has clarified the weaknesses of the agricultural sector, at the same time more strictly requires a synchronized innovation in policies, production and cultivation methods ", Ms. Huong continued.

A representative from the IPSARD also said this was a common issue of many countries in the world, and expressed: "If it can timely change and adapt, the agricultural sector can find new markets, which were left vacant during the Covid-19 pandemic.”

The IPSARD presented a solution for Vietnam's agricultural products focusing on linking farmers with farmers and farmers with businesses to promote the mechanization and application of science and technology in farming. This is done in addition to the encouragement of businesses to expand their markets, especially those outside of China.

Mr. Hoang Vu Quang, Deputy Director of the IPSARD suggested the agricultural sector should focus on producing high-quality rice for sale in the high standard markets, diversifying products, and increasing investment in the warehouse and specialized logistics.

"We should also consider moving from trade relations to investment cooperation in agricultural production," he concluded.