Minister of Agriculture and Rural Development Nguyen Xuan Cuong speaks about the efforts made towards digitalization in the agriculture sector of Vietnam.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong
■ How would you evaluate the performance of Vietnam’s agriculture sector in the first nine months of 2019?
The annual plan assigned by the government and the Prime Minister for the agriculture sector is to record growth of 3 per cent, with an export target of about $41-42 billion. This year has been quite challenging for the agriculture sector because of natural disasters and epidemics.
Growth stood at 2.02 per cent in the first nine months. This is a positive result that reflects the efforts of all involved, especially farmers, in the context of natural disasters and epidemics.
The effect of movements in global trade on agricultural products has also presented a raft of difficulties. Average prices are low and trade tensions between some countries and protectionist policies now exist, in which agriculture is one of the most vulnerable sectors. Therefore, achieving this growth of 2.02 per cent is a positive, reflecting our efforts in dealing with natural disasters, epidemics, and issues from greater integration.
Exports were $30.6 billion, up 2.7 per cent year-on-year. We expect the agricultural sector will reach the annual targets set by the government.
■ With Industry 4.0 in mind, what are your views on the development of Vietnam’s agriculture sector towards digitalization?
After more than 30 years of development since “doi moi” (renovation), Vietnam’s agriculture sector has posted significant achievements. From a country importing 2 million tons of food a year, we now produce enough food for our 100 million people and for export. However, Vietnam’s agricultural economy is still primarily made up of small households, so economic efficiency in the production chain for farmers and other parties remains low. Vietnam’s agricultural products are exported to 185 countries and territories around the world, but most are raw materials with low added value and overall trade activities have not been good.
Therefore, in the context of Industry 4.0, to ensure that the agriculture sector, rural areas, and farmers continue to develop, it is necessary to focus on restructuring the sector towards global integration to create larger value chains at all stages and to focus on building a clean and organic agriculture sector through scientific and technological advances. Regarding production organization, Vietnam has key enterprises working with cooperatives and farmers to take advantage of scientific and technological advances from Industry 4.0. Over the last three years, the number of enterprises investing in agriculture has tripled and many large enterprises operating in other business lines have also invested in the sector.
The establishment of the Vietnam Digital Agriculture Association (VIDA) was based on these positive signs and the good conditions found in Vietnam’s agriculture sector in the context of Industry 4.0.
Agriculture businesses that wish to integrate into the global economy should join the association to learn about the governance of the digital economy in general and digital agriculture in particular. This is the basis for using achievements in science and technology in production.
The association is also a bridge, with the role of consulting, proposing, and contributing to perfecting institutions and mechanisms and policies towards smart and integrated digital agriculture. We expect that members of VIDA will build a digital management ecosystem for the agriculture sector.
■ Many say there are still too few Vietnamese enterprises investing in digitalization in agriculture, and those that are investing are primarily large corporations. Why is this the case?
Although the number of businesses investing in agriculture is not large, there are key businesses doing so. For example, in fruit and vegetables, export growth has doubled over the last seven years and export value now stands at over $4 billion; higher than rice exports. To achieve this result, processing has been the most important factor, with large enterprises investing in modern technology. Vietnam had lacked a modern pork processing facility for 30 years, for example, so Masan decided to invest in one. This shows that large enterprises have made great contributions and had a pioneering role in the development of Vietnam’s digital agriculture.
Investment in agriculture remains risky and profits are low, so positive results will not come quickly. Product diversification is also very difficult, due to land being fragmented. In order to secure a large production scale, enterprises must work with farmers, but links must be created via cooperatives to do so. Credit is also a challenge. Businesses must have clear production plans that lenders can trust before resolving capital problems.
Finally, in my opinion, the greatest difficulty is the lack of high-level human resources to manage digital agriculture. If we focus on resolving this problem, we can make use of advances in science and technology.
■ What mechanisms and policies does the agricultural sector need to attract businesses and move towards digitalization?
There are few businesses with long-term experience in the field, so if enterprises want to develop, they must improve themselves. The government should also accompany and encourage businesses, because they are the nucleus in restructuring agriculture towards digitalization. The government should perfect institutions and policies in matters such as customs, exports, and quarantine, so that enterprises can produce products that meet market needs.
From the ministry’s perspective, we consider VIDA in particular and all associations and businesses in general as companions in realizing the goals of agricultural restructuring and new rural development. The ministry stands ready and will address all problems facing associations and businesses.
■ Vietnam’s rural area is currently home to about 70 per cent of the population and about 40 per cent of the workforce, with millions of small land plots. To what extent has digital agriculture already been applied in Vietnam?
We hope that VIDA will attract businesses and be a bridge for them to cooperate with cooperatives and farmers to take advantage of and exploit the scientific and technological achievements from Industry 4.0.
■ What are the prospects for Vietnam’s agricultural sector in general next year and the development of digital agriculture in particular?
We hope that each sub-sector of the agriculture sector will have leading enterprises perfecting the digital management ecosystem from the application of science and technology, and focus on processing with modern technology to create products not only for Vietnam but also for the global market.
I hope that, in the near future, key agricultural products will have digital management ecosystems. With the establishment of VIDA, we also expect to open training centers to resolve the problem regarding the lack of high-quality human resources for the restructuring of agriculture in the context of the digital economy.
VN Economic Times