VietNamNet Bridge - An ecosystem for organic agriculture is taking shape in Vietnam, helping ease  difficulties for startups in the field.

An ecosystem for organic agriculture is taking shape

Analysts note the strong rise of startups in organic agriculture and food, and higher interest by investors in the startups. Most recently, two projects raised funds through ‘Thuong vu bac ti’ TV Show (Multi-billion dong affairs). 

The project with farmers to produce Hoa Nang organic rice got VND10 billion worth of investment, while the project on Soya Garden, a chain of soybean milk shops, received VND15 billion. 

According to Pham Phuong Thao, managing director of Organica Investment JSC, which runs Organica chain, it is now easier to start up in organic agriculture production than some years ago.

“New startups can learn experience from pioneers. The ecosystem for startups in organic agriculture is taking shape, from input material suppliers to consultants. Many organic food certifying organizations have set up their representative offices in Vietnam,” Thao said.

However, she commented that there are still difficulties and challenges.

Nguyen Lam Vien, chair of Vinamit, a dried food producer, commented that the organic food market is considered a niche market which won’t see explosive development like industrial products, and startups in the field needs patience to exist and develop.

“The Vietnamese market has 90 million consumers, but 70 percent remain inaccessible to organic food, while 29 percent are still learning about organic food and only one percent is ready to buy organic food,” Vien said.

“Vietnamese consumers buy products with their eyes and ears, not their wisdom,” he commented. “Therefore, it’ll take organic food producers a long time to persuade consumers to accept the real value of organic products.”

Thorny path

In 2016, Vu Nam Thai, the founder of 7A farm model which produced organic meat and vegetables, turned up regularly at workshops to introduce his project. The operational activities of the farm were often updated on social networks, but new images have not appeared recently.

Thai, when talking with reporters some days ago, admitted the failure of the project.

“I had to relocate my project twice. I made a big investment in the project, but I have lost everything as the landlords changed their decisions,” he explained, saying that startups should organize production on their own land, not leased land, to avoid risks.

Also according to Thai, the demand for organic food exists, and the number of producers has increased rapidly. With the price of 20,000-25,000 per kilogram of vegetables, producers cannot make profit.

However, Thai still is optimistic about organic agriculture development, saying that he would resume production after buying two hectares of land.

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