Growth opportunities for Mekong Delta production and export

06:00 | 08/10/2020 Society

(VEN) - With an area of about 3.94 million hectares, accounting for 12 percent of the country’s area, the Mekong Delta is the leading grower of rice, seafood and fruit producer and exporter in the country.

growth opportunities for mekong delta production and export
Export of agricultural and aquatic products from the Mekong Delta is expected to recover

Facing a double crisis

Export turnover of Mekong Delta agricultural products reached over US$8.5 billion in 2019, accounting for 56.7 percent of the region’s total and for 20.1 percent of Vietnam’s agricultural export turnover. Rice grown in the Delta provinces accounts for 80 percent of the country’s turnover, pangasius for 95 percent, shrimp for 60 percent, and fruit for 65 percent. Provinces in the region are focusing on exploiting their strengths and investing in agricultural economics to take advantage of new export opportunities.

The early 2020 witnessed the worst ever drought and salinity levels in the delta, surpassing the El-Nino induced 2016 drought. According to monitoring data, in the area about 68km inland from the river mouth, the salinity level exceeds the threshold for cultivation of most rice varieties. Many provinces and cities also face a scarcity of fresh water for domestic use.

The Covid-19 pandemic has disrupted supply chains, significantly reduced consumer demand, and stopped much production. Most import and export activities were suspended, leading enterprises to stop buying agricultural and aquatic products, or being unable to make payments on time for small producers. As a result, farmers did not have capital to re-invest, severely affecting their livelihoods.

According to Nguyen Phuong Lam, Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s branch in Can Tho, the pandemic has slashed production and business everywhere, and in the delta in particular. Mekong Delta enterprises have focused on agricultural production and processing, delaying the impact of the pandemic on production and business activities to some extent. Whereas trade, services and tourism are affected immediately by the pandemic, the agro-seafood processing industry continued to operate. However, the major consumer markets such as the EU, the United States, China, Japan and the Middle East all significantly reduced their orders.

Many key Delta export products have plummeted in the first seven months of 2020. Fruit exports were down 21.4 percent, pangasius exports dropped 39.1 percent, and shrimp 14.5 percent. Inventories of many agricultural production and processing enterprises are currently full, suspending production.

However, the entry into force of the EU-Vietnam Free Trade Agreement (EVFTA) has slashed taxes on many agricultural and aquatic products, promising renewed growth momentum for the Delta’s production and exports.

Rehabilitating growth

According to assessments by the Ministry of Agriculture and Rural Development, the region still has about 41,900ha of damaged winter-spring rice and 6,650ha of affected fruit trees damaged by drought and salinity. In addition, thousands of hectares of vegetables and more than 8,715ha of aquaculture have been damaged despite efforts to save them.

In order to adapt to changes in natural and market conditions, the Mekong Delta needs to focus on processing, exploiting resources, and applying scientific and technological advances to cultivation, production, harvesting and processing. The Delta also needs to prioritize the development of processing and trade in the agricultural value chain, and focus on solving issues of seeds, food and processing in research and application of science and technology.

The region should not only promote production linkages to increase the value of agricultural products, but also apply technical standards and processes to production, build brands and expand consumer markets, thus increasing growers’ incomes and promoting the development and popularization of economic models along value chains.

In order to increase the value of key agricultural products, many agricultural cooperatives in the Delta hub of Can Tho have invested in applying science and technology in production, guided members and farmers to apply production standards to increase their productivity, product quality and value.

According to Nguyen Minh Toai, director of Can Tho City Department of Industry and Trade, the industry and trade sector will coordinate with relevant industries to help enterprises improve production efficiency, participate in trade promotion programs, especially those linking agricultural and aquatic product supply and demand in the Delta and elsewhere. The department will also promote brand advertisement, sale of agricultural products and local specialties, and continue to organize programs to help enterprises and cooperatives innovate, improve operational efficiency, build and popularize models of cooperation.

Ngoc Thao