Mr. Kakioka Naoki, Senior Representative at JICA Vietnam, tells VET's Quynh Nguyen about the advantages and disadvantages for Vietnam's agriculture sector in the global value chain.

■ How would you evaluate Vietnam’s efforts in recent years to develop its agriculture sector?

Vietnam has made huge efforts over recent years to increase the yield of agriculture products with a view to food security and as a result has become one of the leading exporters of agricultural products. 

Nevertheless, unit prices of export products are still low due to the following reasons: dissatisfaction over quality requirements in international markets; unsuitable post-harvest activities and products not being sorted into grades; complex distribution channels (where different products are mixed together); inadequate infrastructure (roads and cold storage); and the high cost of farming (land prices and the price of agriculture materials). 

The government has recognized that food value and food variety are important matters for agricultural development in the country.

■ What programs and projects are JICA conducting to support Vietnam in enhancing the food value chain?

The “Mid and Long-term Vision for Vietnam-Japan Agriculture Cooperation” program was approved by both governments in August 2015 and aims at establishing a food value chain in Vietnam, covering agriculture production, transportation, processing, and marketing, with investment from the public and private sectors of both countries.

JICA is working with the Ministry of Agriculture and Rural Development (MARD), provincial governments (such as north-central Nghe An and Lam Dong in the central highlands), and partners from the private sector to carry out activities within the scope of the intermediate and long-term vision: a technical cooperation project on development planning of the agriculture sector in Nghe An; the Project for Supporting Lam Dong Province in Formulating an Agriculture Development Model by a Multi-sector Approach and Promoting the Investment Environment in the Agricultural Sector; and a survey on the application of information technology (ICT) in agriculture in northern Ha Nam province (September 2014 - March 2016). 

Vietnam’s agriculture sector and its economy will be developed, reducing the country’s vulnerabilities.

■ What is your assessment of the food value chain in Vietnam?

I think that, compared to other ASEAN countries, Vietnam’s agriculture infrastructure has been well developed. 

In particular, water, electricity and roads, which are the most important factor in the establishment of food value chain, have been widely developed. 

However, issues include unsafe crop production, due to the incorrect use of pesticides; insufficient post-harvesting; unclassified produce; the difficulty in finding safe vegetables with good prices at food markets; complex distribution channels; and low competition.

■ What difficulties do Japanese enterprises face when investing in Vietnam’s agriculture sector?

There are several difficulties, including two major ones. 

Firstly, it is difficult for foreign enterprises to acquire large plots of agriculture land at a reasonable price, which makes it difficult to apply advanced technology. 

Secondly, agriculture contracts have not yet become common among farmers in Vietnam. 

These contracts are readily breached, which seriously affects the business of foreign enterprises and mutual benefit.

■ What kind of support has JICA provided to help enterprises deal with the difficulties?

JICA has made an effort to resolve these two major difficulties: supporting provincial governments that have communications with JICA and an interest in inviting private Japanese agriculture companies into their province and seeking land plots, and introducing “contract-based agriculture” in Nghe An by conducting pilot agriculture contracts, with provincial government officials and farmers acquiring real experience in developing contract-based agriculture.  

■ Many Japanese enterprises are promoting their cooperation with Vietnamese partners for the development of Vietnam’s agriculture sector. How effective has this cooperation been and is it a good model for the two sides in the future?

In August 2015, the Japanese and Vietnamese Governments agreed to encourage private sector investment in the agriculture sector in order to establish a food value chain in Vietnam. 

Many Japanese companies have visited Vietnam to seek business opportunities in agriculture since.

However, actual investment in the agriculture sector has only just begun, and with JICA’s support, the number of investment projects has gradually increased. 

We believe that Japanese investment can help to not only activate Vietnamese agriculture businesses but also improve the hygiene and safety of Vietnam’s agriculture.

■ What are your expectations for cooperation in agriculture between Vietnam and Japan this year and in subsequent years?

Previously, Japanese ODA, especially JICA’s support to the agriculture sector, was mainly technical transfer in agriculture production. 

Transportation, processing, and marketing in food value chains have been mainly dealt with by the private sector. 

Under both governments’ mid- and long-term vision, JICA has worked in cooperation with the private sector to approach these three matters as well as continued with technical support in agriculture production. 

This means that the “role of the private sector in agriculture development will become more important” and “the government is expected to set up a favorable environment for the activities of private sector in developing the food value chain”.

JICA recognizes that Vietnam’s agriculture sector has been well developed but still faces difficulties. 

JICA will support the Vietnamese Government in tackling the difficulties in economic and agricultural development.

VN Economic Times