Farm producers squirm in global supply chain

09:11 | 22/08/2016 Trade

(VEN) - As a farming country, Vietnam has tens of farm products listed among the world’s top export items in terms of revenue. However, Vietnamese agro producers are still squirming in finding out possible ways to position themselves in the global value chain.

Farm producers squirm in global supply chain

Poor investment in technology has caused the low quality of Vietnamese agro-products

Weak competitiveness

At a workshop to promote the role of small and medium-sized enterprises (SMEs) in the food supply chain held recently in Hanoi, Deputy Minister of Industry and Trade Nguyen Cam Tu said that the deeper the regional and international integration is, the larger the mutual dependence is among participants in a supply chain. However, only a few Vietnamese agro-products are qualified for the global supply chain.

According to Assoc. Prof. Dr. Vu Thi Minh from the National Economics University, poor investment in technology is the first reason for the low quality of Vietnamese agro-products. The technological content of Vietnamese agro-products increased from 11.1 percent to 14.2 percent from 2000 to 2010, lower than the increase from 21.2 percent to 32.2 percent in the case of Chinese agricultural products in the same period.

Another reason is that Vietnam does not have strong agricultural brand names. Due to lack of brand names, Vietnam’s 25 percent broken rice often fetches lower than Thailand by US$30-40 per tonne.

A vast majority of domestic agro-SMEs lack capital, are burdened with administrative and transport costs, are vulnerable to environmental and economic risks, and are weak in trade promotion.

Key solutions

Early this year, a series of Vietnamese agro-products were selected for the global supply chain. This was a good piece of news for the agricultural sector. For example, the Starbucks Company selected the Starbucks Reserve Vietnam Da Lat branded coffee for its global supply chain. The Ajinomoto Company selected Adeco as a chicken egg supplier to make mayonnaise products to be sold in some markets including Vietnam and Singapore. This is the result of good material resources and intensive investment in technology. Experts in the agricultural sector said that domestic agro-producers are totally able to join the global supply chain, but they should invest considerably in agro-technologies.

Branding is also a major issue for domestic agro-producers. The government should support agro-businesses to build brand names, with the aim to ensure price stability and improve competitiveness of agricultural products.

Consultant Nguyen Huong Tra from the Small and Medium Enterprise Support Center suggested that domestic enterprises invest in agro-technologies, while improving product quality and competitiveness through enhanced links.


Phuong Lan