Vietnam is negotiating key free trade agreements (FTAs) with bigpartners, and once these deals are signed, they will put mountingpressure on the agricultural sector.

Foreign agriculturalproducts will flood the Vietnamese market in a couple of years, puttingdomestic products at a disadvantage, according to experts. VOVdiscussed the issue with Dang Kim Son, Director-General of the Instituteof Policy and Strategy for Agriculture and Rural Development (IPSARD).
 
* How will the trade agreements under negotiation affect Vietnam’s agricultural sector?

Vietnam has made use of international economic integration fornational development over the years. Among key economic sectors,agriculture has enjoyed a trade surplus for many consecutive years, andits export value hit a record high of nearly 30 billion USD, even at theheights of the economic crisis.

Research indicates policyreform and infrastructure investment, particularly for businessdevelopment, would reap even greater success. Vietnam has onlycapitalised on a fraction of the opportunities stemming from World TradeOrganisation membership. The same challenge is posed by the TPP and thesix other trade agreements.

The markets for key agriculturalproducts like seafood, coffee, and rice will expand as competition fromforeign imports intensifies. Farmers will suffer the most if the sectorand its businesses fail to adapt.

* What are solutions the sector should adopt to approach the changes?

Integration cannot deliver immediate success to both big and smalleconomies. Integration must proceed with reforms in State management andmarket transparency. A long-term strategy is needed to encourageinvestment from all economic sectors.

A healthy businessenvironment means all economic sectors are treated equally, especiallyfor farmers that still comprise the agricultural sector’s majority.Advanced technology should be applied to help agricultural businessesaccess international markets.

The State needs policies thatattract investment into rural areas or else risk international businessdomination of the domestic agricultural market.

Finite resourcescannot support the parts of the economy struggling to compete. Vietnam’sinherent competitive advantages deserve preferential treatment and thecountry should focus on producing those products of high competitiveadvantage.

* Some imports, such as sugar, will soon enjoy zerotax. What should businesses do to hone their competitive edge ahead ofthis change?

We should use the last moments of tariff protectionto raise competitiveness. Businesses specialising in sugarcane, oilproducing crops, tobacco, animal feed, and temperate produce - all ofwhich use imported input materials - need to play by the rules toconsolidate their integration.

Vietnam will have to boostexports while continuing to rely on imports for materials it cannotefficiently supply itself. Sugar is a case in point Vietnamese sugarprices are much higher than international market’s because ofprotectionism. Many other countries are in similar situations.

Poor farmers are most vulnerable and they deserve the most attention andassistance. The State should build new irrigation and cultivationsystems to enable farmers to grow and breed higher-yielding varieties.-VNA