VietNamNet Bridge - Vietnam's agricultural sector still has an opportunity to change in order to compete with foreign rivals when Vietnam participates in Free Trade Agreements (FTAs), said experts at a forum on strengthening the competitiveness of the rice and animal husbandry market of Vietnam, held in HCM City on September 8.

Doan Xuan Truc, Deputy Chairman of the Vietnam Livestock Association, emphasized that in the context of integration, the livestock sector has to reform, particularly feed production enterprises. Feed accounts for 60% -70% of the production cost of the livestock industry.

The Chairman of the Vietnam Feed Association, Le Ba Lich, said that the production cost of animal feed of Vietnam was still higher than that of countries with a developed livestock industry in the region, such as Thailand, Indonesia, and Malaysia.

Lich said Thailand sets the ceiling profit for this product of about 5%, but in Vietnam, nobody controls it. Profits of Vietnam's animal feed companies are up to 10% -15%.

He added that information about the cost price of feed enterprises are not accessible and proposed to fix the ceiling profit for animal feed.

Vietnamese animal feed businesses said they could not fix the prices themselves, but have to base the prices of foreign-invested feed firms and this makes the price for feed high.

To help Vietnamese livestock products compete with foreign imports, Lich said the government should have preferential credit for agriculture and livestock in particular because the interest rate for agriculture is currently at 7%, which is still high in comparison with 5% in China and 3% in Thailand.

Lich also suggested raising technical barriers to protect domestic producers.

Another problem is cumbersome administrative procedures. Some feed companies said to import one ton of feed, they had to get the approval of the Department of Livestock, and then the technical council, and the Ministry of Agriculture. This process lasts for six months to 1 year.

For Vietnamese rice, the situation is not better. Nguyen Duc Thanh, Director of the Institute for the Vietnam Economic Research and Policy (VERP), said the rice market of Vietnam is increasingly dependent on China.

Vietnam is losing its traditional markets. Meanwhile, Thailand is diversifying the market with quality products so it takes footsteps in every market, from picky ones like the US, Japan, Europe, and China to less choosy markets like Africa.

"The problems of the Vietnamese rice market are: difficulty seeking markets for high quality rice; unable to build rice brands for Vietnam; rice price in the domestic market dependent on export prices; and lack of cooperation among local rice traders and exporters,” Thanh said.

Professor Vo Tong Xuan, a senior expert in agriculture, said that while Vietnam’s rice exports fell in both volume and value, Cambodia's rice exports in the last eight months of 2015 increased by 50% compared to the same period of 2014. Cambodian rice is exported to picky markets like China, France and some European countries.

To promote its rice, Cambodia launched a large-scale marketing program. It participated in all international rice fairs held in Thailand while Vietnam was absent. They not only brought rice samples for customers to see and taste but also offered a price and signed contracts on the spot.

Nguyen Duc Thanh, from VERP, said that to enhance the competitiveness of Vietnamese rice, it is a must to have transparency of export market information, to remove the floor price for rice exports and to ease conditions to become rice exporters.

Compiled by Nam Nguyen