Strategies and policies enhance Vietnamese agricultural product value
duonghanhnguyen 1-01-2022, 21:46
Strategies and policies enhance Vietnamese agricultural product value

Dr. Le Xuan Nghia, former Vice President of the National Financial Supervisory Commission. Photo: Tung Dinh.

In reality, Vietnamese agriculture can be seen as a strategic spearhead and a real strength as there are few countries in the world that have such power of agricultural products as Vietnam.

Mr. Philip Kotler, one of the world's modern marketing founders, said Vietnam should become a “kitchen” of the world, because of its favorable nature and both tropical and temperate climate. Each region, each ethnic group in Vietnam has its own typical agricultural products, forming typical culinary that no other country in the world can have.

Therefore, assessing the value of Vietnamese agricultural products is based not only on export data, but also on many other factors behind it. It is really necessary to have national methodical strategies for it.


Looking at the 2021 export figure, we can clearly see the role of our agriculture, agro-forestry-fishery product quality value. In 2021, exports of agro-forestry-fishery products reached more than USD48 billion and the added value of agriculture was between 50 - 60%, equal to about USD25 billion of GDP. Meanwhile, among USD250 billion of industry, only 5% was the added value, equal to about USD12.5 billion. That means we only get benefits for the workers’ wage from FDI enterprises, the remaining profits were all transferred back to their home countries. Those figures show how essential a strategy for investments in agriculture and improving the value of Vietnamese agricultural products is.


I.

First is a communication strategy. The media is now a huge power and, in some ways, it can be said as a decisive factor for trade, especially for agricultural products. But our communication currently is still going in the traditional way and it is very difficult to boost.

These days, consumers do not have conditions to see and touch our agricultural products with their own hands, which are all digitized, so I think it is necessary to have a digital communication strategy to promote all that Vietnam has to the world.

Recently, Alibaba Group has implemented an extensive program on creating a communication platform for all small and medium enterprises worldwide, mainly for agricultural products. That shows the digital platform is a solution to help customers identify products so producers can promote trade, communication of goods, and selling their products. We cannot stay out of this trend.

 Product information needs to be transparent in order to let the world see what we have, then we will decide how to participate in the world market. It is necessary to have an ecosystem of diverse goods, many products with utilities for customers to have many choices of them.

The second strategy should be focussing on Vietnamese agricultural product quality, especially in the food processing industry. For a long time, we thought that with so many agricultural products, our processing agricultural products must be also our strength, but that is not true.

Many industrial strategists have affirmed agricultural product processing is one of the most complicated processing technologies. As it is human food, it is put under strict censorship barriers of countries. A car or motorbike can be recovered and repaired if something goes wrong with it after selling, but it can't be with food. Food is human life, if there is any problem, consumers will boycott and our reputation will also be completely lost, so it cannot be sold to anyone.

That means the food processing and food export must be considered a very high-level industry, nearly like pharmaceutical technology. It is not just as simple as a piece of food. However, for a long time, I have thought that all from policy-makers to producers and processors in Vietnam have not been deeply aware of the importance of this issue.

I still remember the time when industrial strategies were planned, someone suggested Vietnam should focus on food processing because we are always proud to be an agricultural country! But I also still remember at that time Mr. Tran Van Tho - professor of economics at Waseda University (Tokyo, Japan) firmly said don't think simple of food processing. He said it was much more complicated than making television or a computer. “If Vietnam wants to work in the food industry, first of all, Vietnam must focus on the electronics industry. Otherwise, you must learn from Thailand and Malaysia to link up with foreign businesses to take advantage of their technology. If you do it yourself, it will be very difficult,” he said.

Until now I do see what Mr. Tho said was true. Thanks to going into electronics, we can export... That said, exporting agricultural products with a market reputation needs a big strategy focusing mainly on the entire technology of production, harvesting, and processing.

The third is a preservation industrial strategy. It is often thought that input and the production process determine agricultural products, but in fact, preservation is extremely important because it is the easiest process to be contaminated.

Today, Vietnam and many countries are using Japanese frozen preservation technology. But in the world, there have also appeared many other new technologies for food preservation such as sonic freezing. This technology does not use ice but just a very thin snow layer that can keep the product four times as fresh and reduce transportation costs by about 70%.

The policy of applying new technology will solve the quality problem for Vietnamese agricultural products because it is like an “invisible hand” that can control production, harvest and preservation. However, what we are currently weak at in terms of agricultural products for export is the lack of comprehensive, detailed, modern strategies and a lack of funding for their implementation. 

Dr. Le Xuan Nghia. Photo: Tung Dinh.

II.

No matter what, Vietnamese agricultural products or cuisine cannot reach out to the world partly due to the lack of policies.

Try to see what Vietnam is weakest in? It is technology. All claims about 4.0 industry or digitization are not substantial and are partly still on paper. Vietnam's technology compared to other ASEAN countries is always weaker and we do not have the policy to improve it.

In Taiwan, they have a national institute for technology funded by the government and given very specific tasks. Thanks to a proper strategy, at a macro level, the value of Taiwan's agricultural products is so enhanced.

We have already had policies but sometimes we were wrong right from the moment we set out the case.

Some policies and regulations on licensing new technology are too long to take effect. For example, licensing semi-organic fertilizers still takes about two years to complete. In a time when technology develops and changes so rapidly but it takes two years to be licensed, what is technology anymore?. 

Convincing farmers to use new technology is a huge problem and the Government must have specific target programs. Applying new technology will result in a cost increase so it is difficult for farmers to accept, there must be supportive policies in a longer-term vision for them.

Moreover, it is a fairness issue. A man applies new technology to have a clean product, but still sells it at the price as a dirty one, which discourages others who follow new technology. Those problems cannot be solved by farmers or businesses but should be handled by the government, management authorities, and policymakers.

In short, policies need to be really substantive, supportive and, accompanying with businesses.

 

III.

Vietnamese agricultural product value should be enhanced not only for exports but also for promotion, introduction, and branding right in our own country.

For the past few years, I have found the added value per labor in the agricultural and service sectors has gradually increased but decreased in the industrial sector since 2005.

This shows strategies for developing and improving the value of agricultural products need to have a combination and mutual support between the two economic spearheads of the agriculture and service industry.

Combining agriculture and tourism is an extremely effective channel to promote and enhance the value of Vietnamese agricultural products.

Why such a combination? Because most of the surplus labor in our agriculture has been absorbed three times more by services than industry. This trend will become more and more obvious when the industry will continue to digitize and automate. The surplus labor in this area will be less and less. Solving the labor problem, combining agriculture and tourism is an extremely effective channel to promote and enhance the value of Vietnamese agricultural products.

The second aspect is culture. Vietnamese folklore exists mainly in the countryside and agriculture. That is a strength that I think we have not exploited properly to improve the agricultural product value.

Foreign tourists coming to Vietnam to travel, eat and then learn about our culture. Thus, only farmers and rural areas can provide cultural services to attract tourists and promote the image of our nation with great cultural value...

The third aspect is the cuisine. Tourism without the support of farmers and rural areas will not solve any problems. Vietnamese cuisine is among the healthiest in the world today and richer than any other country.

Finally, it is about scenery experiences. The more civilized people's lives become, the less the ego is. What we are here is for our community. Experiencing Vietnamese landscapes, community tourism, enjoying food, learning about Vietnamese culture will create unforgettable impressions in the hearts of tourists. Then when they return to their country, they will definitely buy Vietnamese agricultural products there.


Dr. Le Xuan Nghia

Edited by Hoang Anh. Translated by Linh Nguyen.

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