FOSTERING AGRO-INDUSTRY: OPPORTUNITIES AND CHALLENGES

ISG Plenary Meeting 2014 with the theme: “Fostering Agro-Industry: Opportunities and Challenges” was organized and co-chaired by the Minister of Agriculture and Rural Development Cao Duc Phat, Chairman of Dong Thap PPC Nguyen Van Duong, and IFAD Country Programme Manager Henning Pedersen. The aim of the Meeting was to exchange and share information on the current agricultural products processing industry, policy dialogue, and the environment of investment in agricultural products processing industry towards increasing added value of Vietnamese agricultural products.

Some 150 participants, who were representatives of development partners, embassies, international organization, leader representatives from the Government, ministries, provinces, associations, businesses, research institutes, and mass-media, attended the Meeting.

Delivering the speech at the Meeting, Minister Cao Duc Phat stressed that ISG Plenary Meeting had been known as a high-level policy dialogue forum since 1998 organized under an initiative of donor community, international organizations, and it had been maintained to open dialogue for pressing and important issues of the agricultural sector.

ISG Plenary meeting aimed at fostering agricultural product processing industry in order to increase the added value of Vietnamese agricultural products, improve current situation of Vietnamese agricultural products, which are mainly exported with raw materials, low price, poor packaging, unavailable brandname, etc., In fact, the lower price of Vietnamese agricultural products, normally some 15%-50% compared to the same products in other countries Vietnam derives from its small-scale processing industry with out-of-date equipment.

Agreed with the view of the Minister Cao Duc Phat, Mr. Nguyen Van Duong, Chairman of Dong Thap People’s Committee expressed that Dong Thap had strong advantages of agricultural production, however Dong Thap’s agricultural products value were still low, and fostering agricultural product processing industry was really necessary for increasing its added value, creating more jobs, and increasing workers’ income. Dong Thap province was ready to pilot the agricultural sector restructuring policies, create a good environment for fostering the investment and economic development of the province.

Mr. Henning Pedersen, IFAD’s Country Programme Manager, shared that we were facing with global difficulties, building infrastructure, concentrating on increasing the added value of agricultural products, providing suitable policies for rural development were the critical issues that Vietnam needed to pay more attention. At present, providing a favorable investment environment should be considered as one of the priorities of the local authority, which had been successfully implemented in the Mekong River Delta, whereas other provinces still confused and struggled with. Further to the support policies provided by the Government, local management agencies should be provided with capacity building, knowledge, evaluation ability, technical assistance, farmers’ capacity in rural areas should be strengthened as well.

From discussion session, participants’ comments showed that, over last 10 years, Vietnam’s trade on agricultural products was developed significantly with strong involvement and contribution of private sector and businesses in the process. However, in order to overcome the foreseen challenges, take the opportunities for fostering the processing industry, have accessibility to domestic and international market, it needs a significant improvement of the whole system with the most applicable policies, the respect of technical regulation, quality standards and the market rules. The State’s supporting roles in terms of making policy, training, fundamental research should be integrated with market driven mechanisms, new approaches, and new thinking way.

As conclusion, Minister Cao Duc Phat confirmed that the Meeting had achieved a high consensus on the necessity of investment in the agricultural product processing industry and relying on businesses, particularly the private sector was necessary for further development. With the view of that market was the starting point for promoting and adjusting the allocation of resources in the agricultural production activities, the Ministry of Agriculture and Rural Development encouraged businesses to make more intensive investment in the segment, where required higher added value, such as processing and trading in the agricultural product value chains.

Minister Cao Duc Phat reaffirmed that the agricultural sector restructuring process needed the participation of all economic sectors of the whole society, of which businesses played the role as “Stimulator” in linking production-processing with market. The State would have strong supports through providing breakthrough policies, smooth and favorable investment environment. The development of processing industry could be understood as the way to encourage businesses, especially the domestic and international private businesses to invest in the agricultural sector. In the other hands, fostering the processing industry also meant to create favorable investment environment for smooth operation of businesses in the agricultural sector.

Implementing the Prime Minister’s direction, the Ministry of Agriculture and Rural Development was quickly reviewing mechanisms and policies for improving investment environment in the agricultural sector. The most important measures were (1) continuously develop and improve policies on: tax, land, human resources capacity building and training, etc. to bring better conditions, transparency, and equality to all economic sectors.

The Ministry of Agriculture and Rural Development had determined the two key issues to be focused on in the process of the agricultural sector development, that were (i) develop science and technology research and technology transfer; and (ii) improve the investment environment, and encourage the proactive participation of all sectors in the agriculture and rural development.

Through ISG Plenary Meeting 2014, Minister Cao Duc Phat expressed his sincere thanks to donor community and international organizations for having been providing financial and technical assistance, supporting in the development of policies, which helped the agricultural and rural development sector achieve significant outcomes. The Minister also highly appreciated further support from donor community and international organizations for the agriculture and rural development of Vietnam.