Logistics costs are twice as high as in Thailand

According to Minister Le Minh Hoan, to form a synchronous logistics system serving the agricultural economy, we need to develop a plan, have a scheme, strategy, plan... However, each plan and strategy requires many years of surveys and evaluation.

The Minister suggested that relevant units separate the scope and tasks to focus on implementing each year based on actual conditions and capacity.

Previously, in February 2021, the Prime Minister issued Decision No. 221, approving the action plan to improve competitiveness and develop Vietnam's logistics market until 2025.

In particular, the Ministry of Agriculture and Rural Development was assigned to build and complete logistics infrastructure for agriculture, especially planning and implementing the construction of a warehouse system and logistics centers serving agriculture in agricultural production areas of large-scale goods and connections between industries to logistics centers and seaports, airports and border gates.

Mr. Nguyen Quoc Toan - Director of the Department of Agricultural Product Processing and Market Development, said that agricultural products that require logistics services are mainly in the fruit industry. Currently, we have more than 7,500 industrial-scale agricultural, forestry and fishery processing establishments. However, many establishments are not attached to raw material areas.

However, because the cost of complex infrastructure has not been synchronized, the average logistics cost for agricultural exports accounts for about 20-25%, quite high compared to other countries in the region (such as Thailand, logistics costs of agricultural exports account for only about 10-15%).

Many limitations in logistics infrastructure along the agricultural value chain pointed out by Mr. Toan include: Storage capacity has not met the requirements; logistics service supply chains are performed mainly by small businesses at each stage; Logistics services have only been developed in big cities while critical agricultural production areas such as the Mekong Delta have not had many.

In addition, the distribution channel of agricultural products through the system of wholesale markets and people's markets has not met the requirements in terms of quantity and quality, limited infrastructure and services for border trade…

Building a logistics center associated with the raw material area

According to statistics, there are about 4,000 enterprises providing logistics services, of which 88% are domestic enterprises, 10% are joint venture enterprises, and 2% are 100% foreign-owned enterprises. Although the number of foreign enterprises is small, they hold a significant market share.

In Vietnam, some modern and professional logistics models have appeared. Typically, the smart cold supply chain of the Belgian business group proposed to be deployed in the Mekong Delta and Southeast region in association with the river transport system, built according to the system of ports in the region.

Minister Le Minh Hoan emphasized that in building logistics service supply models in raw material areas, it is necessary to associate with the participation of purchasing and processing enterprises and cooperatives. In which, the enterprise will guide cooperatives in management and system operation skills professionally and effectively.

Deputy Minister of Agriculture and Rural Development Tran Thanh Nam shared, realizing that farmers' organizations are weak in terms of logistics knowledge, infrastructure, and linkages, in the 2023 - 2027 period, Thailand will focus on supporting the cooperatives to develop logistics systems to increase the added value of agricultural products. MARD also needs to develop a program to establish agricultural logistics systems in agricultural cooperatives.

Mr. Nguyen Van Viet - Director of the Planning Department (Ministry of Agriculture and Rural Development) said that if we only focus on building programs and projects without identifying resources and having policies to support development, It is complicated to form an effective logistics service delivery system for agriculture.

According to Mr. Tran Cong Thang - Director of the Institute of Policy and Strategy for Agriculture and Rural Development, the country's logistics system includes small centers, connection centers, and services to bring goods and agricultural products into significant markets. Therefore, it is necessary to assess the agricultural value chain and address each stage in that value chain.

The Department of Agricultural Product Processing and Market Development proposed to focus on supporting logistics hard and soft infrastructure in border corridors to gather and trade directly to the import market, especially on the land. The second model is to invest in forming community logistics points in the countryside associated with raw material areas.

Translated by Ha Phuc