Vietnam Academy Of Social Sciences

Workshop “Improving Vietnam agriculture value chain in international markets: The case of tea and lychee products”

10/07/2019

In the context of the deeper integration of Vietnam into the world economy, building large-scale and high value-added agricultural production is one of the goals to be aimed. Therefore, production and trade of agricultural products must start from market orientation, accompanied by production area planning and solutions to ensure market stability, especially branding.

Improving Vietnam agriculture value chain in international markets: The case of tea and lychee products. This is the name of the Ministry-level project by Dr. Le Van Hung, Vietnam Institute of Economics under the Vietnam Academy of Social Sciences (VASS), and also the theme of the workshop jointly organized by VASS and the Asian Development Bank (ADB) at JW Marriott Hotel, 8 Do Duc Duc, Me Tri, Hanoi on June 19th, 2019. The workshop aimed at exchanging issues around the analysis of tea and fabric product chains, as well as pointing out the barriers, restrictions when participating in the international markets; thereby offering solutions to improve competitiveness and value-added for products.

Dr. Le Van Hung, Vietnam Institute of Economics reported the presentation at the workshop
Through the reported content on the problems arising in the research process of Thai Nguyen tea products and Bac Giang lychee products, the research team said: "Currently, Vietnam Agriculture has developed quite comprehensively, shifted towards commodity production, productivity and quality.” In the 2008-2017 period, the GDP growth rate of the agricultural sector averaged 2.66%/year, the economic structure has shifted towards modernization, brought into play the market advantage, rapidly increased the proportion of industries, “room for growth” and high value-added products.

The development in production and trade of agricultural products has made a positive contribution to Vietnam agriculture - rural development in recent years. Some top agricultural commodities of Vietnam are rice, tea and lychee, which have affirmed their competitiveness and position in the global market.

However, in the process of integration, Vietnam's agriculture has faced many challenges, especially small-scale production; weak production and linkage of value chains; not uniform in the quality; non-branded products; restrictions in the level of participation in global value chains, mainly production stages, low added value. The fact also showed that we have been organizing production, trade based on international standards; competing based on the rules of the integration process; needing great changes and adaptations to stand firm in the context of economic integration, especially when joining new-generation free trade agreements.

The delegates took souvenir photos at the workshop
Evaluating and exchanging resources and conditions to allow Vietnam on international market barriers, the research team said that the level of participation of these two agricultural products of Vietnam in the global value chain was still limited. The analysis showed that Thai Nguyen tea-growing areas are 21361 hectares with more than 60,000 farmer households participating in tea production and supply, of which 80% are clean tea, 34% are obtained VietGap, GAP and other standards; 42.00 tons of processed tea products; 43 cooperatives and 140 tea villages in the province still standing in front of barriers such as low rate of VietGap tea certification; Certification of nearly half of the province has expired; A large number of farmers still abuse pesticides; Tea is mainly exported in raw form with low value-added because export prices are clearly lower than similar products in other nations. Domestic activities are mainly sold through retail agents or in traditional markets; No storage for fresh tea; Small scale production.…

Bac Giang lychee, specifically Luc Ngan lychee has been granted the title protection certificate in eight countries including Laos, Cambodia, South Korea, Japan, Singapore, Australia and the US; Part area and output of lychee labelled with brand, with QR code for tracking information and traceability stamps. However, lychee productivity still depends heavily on the weather; Product quality is not uniform because of small-scale production, mainly by household size; Lychee harvesting period is short, but the storage/preservation system is lacking; Most households sell fresh lychee immediately after harvesting, which will be pressured on the price (mostly by Chinese traders), leading to a high rate of broken lychees (15%); Export of fresh lychees to developed markets is very restricted.

Discussing the challenges of export lychees, according to the research team, it is necessary to raise the role of the State in granting the VietGAP and GlobalGAP certificates and production area code; Directly organize advice and recommendations households on time of day for spraying, fertilizing, trimming; Training for farmers on production techniques; Organizing trade promotion forums and programs; Issuing documents guiding regulations on conditions for exporting fresh lychees to the Chinese market; Promote linkages between businesses and farmers; reduce import tax; removing non-tax barriers to facilitate market access; Early warning of weather information is needed for households to have the necessary prevention plan…

The representatives of the research team took souvenir photos at the workshop
Discussions on barriers to these two products considered that more than 80% of agricultural products not yet built their brand with no label and no logo, and not fully participated in the global value chain. Most of these products are sold to the international market in the form of raw materials or using the brands of foreign importers. This is a major disadvantage that weakens the competitiveness of Vietnamese agricultural products, has not brought into play the full “room for growth” and the value of the products. The product has not been clearly defined on how to approach the market towards quality and brand positioning, associated with production area planning, policies and solutions to reach and expand and maintain market share, improving competitiveness in global value chains; The limitations in information system and market linkages: Capacity to analyze, forecast, capture market trends of agricultural products are still restricted; channels to share market information to enterprises and production facilities are weak and lacking; Market research work is mostly unexpected, momentary, seasonal.

As can be seen, brand building and development is a right direction to the potential of products, experiences and practices of countries for Vietnam's agricultural products to enhance the value, competitiveness and position in the global market in the context of international integration. Geographical indications, certification marks or collective marks are gradually proving an essential role in agricultural and rural development; contributing to the preservation of traditional cultural values, biodiversity conservation, boosting the growth of production and trade activities and enhancing value-added for Vietnamese agricultural products towards higher value-added and sustainable development.

Pham Vinh Ha



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