Agricultural sector strengthens deep processing to increase added value

Vietnam is the 17th world’s largest agro-forestry-fishery exporter. However, because of raw export, most Vietnamese goods are of low value. For instance, although export turnover reached US$41.25 billion last year, it merely accounted for less than 2 percent of the import value of agro-forestry-fishery products of the world.

Processing red dragon fruits into canned drink. (Photo: SGGP)

The Ministry of Agriculture and Rural Development also confirmed that this development process still has many uncertainties with unsustainable growth. It has not met the requirements of centralized, large-scale, and high-standard commodity production from the international market. The agro-forestry-fishery processing industry has not developed strongly yet, especially in the preservation, deep processing, and supporting industry. Post-harvest losses remain high. It has not yet created a solid production link in the value chain to promote the mechanization and application of high technology to reduce intermediary costs to increase added value.

Currently, the whole country has about 7,500 enterprises that process agricultural products on an industrial scale associated with export and thousands of small processing establishments and households. It is estimated that these economic sectors are capable of processing, preliminarily processing, and preserving about 120 million tons of materials of agro-forestry-fishery products each year. However, the Agro Processing and Market Development Authority under the MARD said that only 20-30 percent of enterprises and establishments export through deep processing. For instance, Vietnamese coffee is exported to more than 80 markets around the globe, with a total annual output of 11.6 million-11.8 million tons, a turnover of about $2.6 billion-$2.8 billion. However, the value remains at a low level because of the large proportion of coffee beans.

Mr. Le Minh Hoan, Minister of the MARD, said that agro-processing activities had received special attention from the Government, enterprises, and society. Therefore, the agricultural sector must open more ways to export agricultural products, determine a development direction, create added value, and solve the problem of excess supply to reduce pressure on farmers, who often face the situation of bumper crops, low prices.

Lately, the Prime Minister issued Directive No.25/CT-TTg on tasks and solutions to develop the agro-forestry-fishery processing industry and mechanize agricultural production. The domestic deep-processing ability of agricultural products still has great potential, so the problem here is to create a stable environment and policies to stimulate investment capital flows. The State and enterprises should join hands to connect, expand the market, and research technology for post-harvest processing and preservation to improve the value of agricultural products. It is essential to establish a market mindset to adapt to the new normal market context, build logistics infrastructure, cold storage, and storage, and make the planning of raw material growing areas attached with processing in localities.