Agricultural sector needs to be ready for leaner times ahead

Published: 09/12/2008 05:00



VietNamNet BridgeAs the economic crisis lowers demand for Vietnamese exports, Viet Nam News spoke with Deputy Minister of Agriculture and Rural Development Luong Le Phuong about domestic production in 2009.

We can raise the quality of rice and help farmers earn benefits from their fields by providing better seeds and good fertiliser.

The financial crisis is still very real and will continue into 2009, so Vietnamese exports, including agricultural, forestry and fishery products, will face a lot of challenges. To deal with these, we need a master plan.

In my opinion, we need to have a financial package to rescue businesses facing bankruptcy. Though the State Bank of Viet Nam has pledged to reduce the banking interest rate, some banks are still forcing businesses to pay all their old loans with old interest rates, so they have to get new loans at the new rates.

There is also a surplus of stock because demand is low. Once businesses are able to deal with the current challenges, there will be less pressure on farmers and people in rural areas.

What should be done to support businesses?

The financial package I mentioned before must be approved through policies. It is not that a certain business or bank is individually responsible.

We can go through banks to reduce the interest rate and define the exchange rate for Viet Nam dong to create favourable conditions for our exports. We should open the market, not only for agricultural products but for all other goods. Once we have demand we can start getting rid of our surplus stock.

The risk of opening the retail market is cheaper fruit and vegetables penetrating Viet Nam. How has your sector prepared for this?

In fact, we have made some preparations but implementation has been too slow. At the moment, agricultural output is still high, but quality is low, which blunts our competitive edge. So we should reduce products with low demand and work on increasing the quality of high-demand goods. For example, next year, we should not increase the quantity of tra and basa (catfish) but invest in raising the fish with higher quality standards and better processing. It should be the same with rice. We can raise the quality of rice and help farmers earn benefits from their fields by providing better seeds and good fertiliser.

There should also be a management chain to ensure production quality, from the raising ponds to the dining table, from the management plough to the plate. What I mean is there should be a link between production, processing and consumption.

In the past, processors could not estimate the amount of materials needed for production while farmers continued to produce materials with little knowledge on market demand. That’s why we need a better connection between them.

There are three relationships that need attention: between the State and enterprises; producers/processors and farmers; and between domestic and foreign markets.

Export turnover of the five biggest staples produced globally have been forecast to fall dramatically, especially rice and coffee. How has Viet Nam prepared for this?

We have to maintain production to ensure cooking security and have 4-4.5 million tonnes of products for export. We should take advantage of the cheap price of materials to boost production and exports.

In my opinion, more attention should be paid to improve the preservation and processing of staple products, such as rice after harvesting.

We also need better monitoring of market trends to make sure our products will be in demand.

What about the fishery sector?

We need to invest in sustainable fish farming under three criteria: economic effectiveness, social equality and environmental protection.

Advanced and environmentally-friendly technologies should be prioritised. Another solution is to maintain and restore fishery resources to ensure maximum sustainable productivity.

(Source: Viet Nam News)

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