Agriculture sector preparing to survive EVFTA challenges

06:00 | 07/07/2020 Society

(VEN) - The Vietnamese agricultural sector will face significant challenges but benefit from technology renovation opportunities and tax incentives as soon as the EU-Vietnam Free Trade Agreement (EVFTA) comes into effect in the coming months.

agriculture sector preparing to survive evfta challenges
Producers and distributors need to improve product and service quality to attract consumers

Competition pressure

Vietnam will open its doors to European goods and services as soon as the EVFTA takes effect, generating heavy competition pressure on the Vietnamese agricultural industry. The price of farm produce imported from the EU, including pork, beef and fruits, among others, is competitive even before the EVFTA takes effect.

The Ministry of Agriculture and Rural Development’s statistics showed that in the first four months of this year, Vietnam imported meat and meat-based products worth US$1.36 billion, up 17.6 percent from the same period last year. Imported pork is sold for 20 percent less than domestic pork despite the 15-27 percent import tax.

According to the Vietnam Fruit and Vegetable Association (VINAFRUIT), in the first four months of this year, Vietnam imported fruits and vegetables worth US$376.9 million from Thailand, China, New Zealand, the Republic of Korea (RoK), and South Africa. VINAFRUIT Secretary General Dang Phuc Nguyen said the increasingly open market has led to a growing presence of imported fruits in Vietnam. Their attractive appearance and high quality have attracted Vietnamese consumers.

Surviving competition in the domestic market

Since the Covid-19 pandemic obstructed farm produce exports early this year, the Ministry of Industry and Trade has found solutions to boost domestic sales. Many fruits and vegetables such as dragon fruits and mango are selling well domestically.

VINAFRUIT Secretary General Dang Phuc Nguyen said vegetable and fruit producers and distributors should ensure their products have known origin, good quality and a competitive price in order to attract domestic consumers.

Vina T&T Trading and Import-Export Trading Service Co., Ltd. opened its first store in Ho Chi Minh City in 2019 to sell domestically made products that were only targeted for export in the past. A company representative said the store had earned monthly revenues of VND500 million, which increased 30 percent during the pandemic thanks to the stable quality, nice design and diversity of the company’s products. The company intends to open two more stores in Ho Chi Minh City in the near future.

The Kim Hai Food Technology Co., Ltd. has introduced products that EU businesses do not have, some of which include dragon fruit juice and dried fruits (fruits dried with high technology), said Company CEO Pham Cao Van. These products are sold in supermarkets nationwide, he said.

Phan Minh Thong, Board Chair of the Phuc Sinh Group, said that apart from promoting sales through supermarkets, Phuc Sinh is strengthening online sales and sales promotion programs, and the group has earned stable revenues despite the pandemic.

VINAFRUIT Secretary General Dang Phuc Nguyen said vegetable and fruit producers and distributors need to

ensure their products have known origin, good quality and a competitive price to attract domestic

consumers.

Thuy Duong