VN needs to invest more in agricultural processing sector

Thursday, Aug 08, 2019 09:20

Dang Phuc Nguyen, general secretary of the Viet Nam Fruit and Vegetables Association

Viet Nam’s exports of farm products, fruits and vegetables in particular, have been rising consistently. But they are exported mainly as raw and fresh items, offering low value addition. Besides, poor harvesting and post-harvest preservation technologies result in a further decline in value.

With increasing competition in the global market, the country needs to invest heavily in deep processing of fruits and other farm produce to increase exports as well as the competitiveness of the sector. Dang Phuc Nguyen, general secretary of the Viet Nam Fruit and Vegetables Association, speaks to Viet Nam News about this.

How do you assess the fruit and vegetable export prospects for the rest of the year?

Fruit and vegetable exports reached US$3.8 billion last year and $2 billion in the first six months of this year.

According to statistics, the export revenues in July were slightly lower than in June. That was because, starting in June, China stopped importing through border trade and switched to official imports.

Many businesses are still unfamiliar with such official export procedures (such as getting export permits, having codes for cultivation areas and packaging facilities, product bar codes, and traceability), resulting in a fall in exports in July.

Hope everything will progress quickly.

In addition, China usually has high demand for fruits in the latter months of the year for the holidays. Viet Nam’s fruit and vegetable exports to the market are expected to increase in the remaining months.

In addition to nine kinds of fruits allowed for official export to China, the Ministry of Agriculture and Rural Development has negotiated with the Chinese counterpart to open their market to durian and pomelo.

The US has opened its market to Vietnamese mango and the EU-Viet Nam Free Trade Agreement will promote the export of Vietnamese fruits and vegetables to the EU market.

Fruit and vegetable exports are expected to achieve the target of $4 billion set for this year.

What do you think of the current status of the farm produce processing industry, especially fruit and vegetable processing?

Our farm produce processing industry is still poor compared to other countries in the region such as Thailand. For instance, we still export grapefruits and durian as fresh fruits. While Thailand, besides fresh fruits, also exports products processed from grapefruits and durian such as sweets and candy, increasing the export value of its farm produce.

Our processing industry lacks capital and technology.

So it is necessary to solicit investment in technology to improve processing of agricultural products in general and fruits and vegetables in particular to add value to farm produce and improve farmers’ incomes.

Post-harvest losses of fruits and vegetables remain high at 30-40 per cent. If we have good preservation technologies, the post-harvest loss rate will decrease, products will have more competitive prices, and farmers’ incomes will go up.

How is the investment situation in the farm processing sector?

The number remains modest.

Foreign direct investment (FDI) in the agricultural sector, including the processing sector, is very small, accounting for just 1-2 per cent of total FDI pouring into the country.

Why is investment in the farm processing industry low? How can we develop the processing sector?

Investing in agriculture is for a longer term than other sectors. The return on capital is very slow; so foreign investors show less interest in this field.

The Government has called on both local and foreign investors to invest in agriculture, including modern processing plants to create added value for Vietnamese agricultural products.

The Government has issued incentives to attract local and foreign investors.

To develop the farm produce processing industry, in addition to resolving the capital and technology issues, the country also needs to develop traffic and logistics infrastructure in agricultural areas.

The Government, from the central to local levels, attaches special importance to developing the agricultural processing industry, including for fruits and vegetables. — VNS

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