Agriculture sector contradictions highlight need for large-scale reforms: official

Ngo Quang Tu, a representative of the Agrotrade Vietnam under the Ministry of Agriculture and Rural Development, said at a forum Thursday that the contradictions showcase a range of problems in the sector, including a lack of synchronization.

The situation calls for large-scale reforms in the sector towards better organized production, harvest, post-harvest processing, logistics and trade, the forum heard.

It is a common situation that during harvest season, exporters are unable to ship produce abroad for several reasons, forcing their sale in the domestic prices at low prices. Meanwhile, processing facilities complain that they only receive produce to function at around 60 percent of their capacity, Tu noted.

He said this happens because most farming is done individually and separately, resulting in uneven quality and supply of produce. At the same time, the lack of cold storage equipment and other post-harvest inadequacies lead to a loss of 20 percent of agricultural yield.

High logistics costs, which account for 35-50 percent of produce prices, also push prices up and makes them less competitive, he added.

Farmers and farming businesses also lack capital to upgrade and expand operations. More than 80 percent of farming companies have a capital of under VND2 billion ($85,600), Tu noted.

These businesses do not have assets to secure loans and access to credit remains too complicated, he added.

Tu stressed the need for practical support policies so that agriculture businesses can access loans, which in turn will help them modernize and increase produce quality.

Some localities are aware of the challenges and are striving to improve produce quality with various measures, the forum heard.

For instance, the Central Highlands province of Gia Lai has 26 agriculture produce processing facilities, but most of these are of small scale and only four can be called factories, said Doan Ngoc Co, deputy director of the province’s Department of Agriculture and Rural Development.

He said the province was seeking investment in this sector to increase produce quality as it targets to have 50,000 hectares of farms meet Vietnamese Good Agricultural Practices (VietGAP) criteria by 2025.