Maintaining Vietnam’s agricultural industry during the pandemic

Tiếng Việt

Maintaining Vietnam’s agricultural industry during the pandemic

“It’s time to focus more on value-added products” in the agricultural industry in Vietnam, according to one RMIT Vietnam academic.

RMIT International Business Program Manager Dr John Walsh suggested that Vietnam’s agricultural industry should focus more on value-added products in response to theCOVID-19 pandemic.

This is RMIT International Business Program Manager Dr John Walsh’s response to a decreased demand of agricultural products due to closed down supply chains and limitations to local and international transport during the COVID-19 pandemic.

Dr Walsh acknowledged two COVID-19 burdens in particular, placed on agriculture by COVID-19; closed domestic retail markets and a slowdown of international trade.

A recent report published by the Ministry of Industry and Trade showed the pandemic was having a direct impact on distribution businesses. Total retail sales of goods and services in the first three months were estimated at VND1.25 trillion, up 4.67 per cent compared to the same period last year, but the lowest increase in recent years.

“In cities like Hanoi, some agricultural products are still available in supermarkets and smaller retailers but the demand has become unpredictable as some are closed without much notice,” Dr Walsh said. “Many people have less money to spend because their jobs may be stopped or slowed down. Consequently, people will be looking for cheaper food which can be prepared at home.”

Dr Walsh referred to a recent meeting held by the Vietnamese Minister of Agriculture and Rural Development Nguyen Xuan Cuong with Chinese Ambassador to Vietnam to discuss measures to boost bilateral cooperation in agricultural trade while the two nations manage the COVID-19 pandemic.

“Vietnam-China agricultural trade is down 7 per cent year on year. Trucks remain lined up at the border, although that situation might improve,” he said.

He noted the global trade is expected to drop 40 per cent next year “as we still have not seen the impact of the virus in Africa, South America, Central Asia and other regions where the level of healthcare is limited”.

“The Asian Development Outlook 2020 showed that agriculture declined slightly in 2019 across Asia because of extreme weather, and there still remain long-term problems of global climate change and land and water degradation,” said Dr Walsh.

He also emphasised the increasing sense that the intensive agricultural methods used in Vietnam and around the world are inevitably part of the production of diseases that will repeat the effects of the current virus.

“The World Food Programme warns that up to one quarter of a billion people will be threatened with food insecurity in the next few years because of economic turbulence and warfare,” he said. “The COVID-19 pandemic has added 130 million people to this total.”

Move to online sales and break through the commodity product status

Dr Walsh noted that moving to online sales will work better when existing supply chains transport produce into urban areas where there’s demand, or demand can be fostered.

Dr Walsh suggested online sales as one response to the current issues in agriculture.

“This is what some cooperatives have been doing,” he said. “China is an example of a country where agricultural e-commerce can be a thriving sector, if supported by the necessary infrastructure. We have all seen the number of delivery vehicles increasing and there are businesses that will operate this way just to keep going and maintain some cash flow, rather than close down altogether.”

But starting this process in Vietnam “from scratch” would be very difficult.

“It will work better if existing supply chains transport produce into urban areas where there’s demand or demand can be fostered,” Dr Walsh said. “Some districts in Vietnam have been active in promoting local production of value-added or potential value-added products, such as Ngoc Linh Ginseng in Quang Nam and sturgeon in Lao Cai.

“While this will not be immediately suitable for all farmers, some groups and cooperatives would benefit from greater access to produce accredited organic food and distribute it. Vietnamese consumers, like consumers around the world, are concerned about the need to provide safe and clean food for their families.”

According to Dr Walsh, cashew nut production is breaking through from commodity to branded product status.

Dr Walsh used cashew nuts as an example of one agricultural sector that is breaking through from commodity to branded product status.

According to the Vietnam Cashew Association, Vietnam exported about 370,000 tons of cashews in 2018, or 14 per cent of its total production.

“This makes Vietnam the world's top cashew exporter by volume,” Dr Walsh said.

“There is an opportunity with this for government to support local producers by following the One Village One Product concept [an innovative program in which each local community identifies one or a few products as locally specific, concentrates resources on its production, establishes it as a local brand, and markets it to the entire country or beyond] that was popularised in Japan, successfully applied in Thailand and now also being used in India.”

Story: Ha Hoang

Business and management

Media Release

20 May 2020