Vietnamese fragrant rice has immense opportunities for entering the EU market

On September 4, the Government issued Decree No. 103/2020/ND-CP regulating the certification of fragrant rice exported to the EU. Deputy Minister of Agriculture and Rural Development (MARD) Le Quoc Doanh affirmed that in addition to the nine types of fragrant rice enjoying tariff quotas under the EU-Vietnam Free Trade Agreement (EVFTA), many of Vietnam's specialty rice such as ST24 and ST25 will have an enormous opportunity for exporting to the EU market in the future.

How do you evaluate the actions of the Government, ministries and branches to solve problems for Vietnam's fragrant rice exports to the EU to get benefits from the EVFTA?

- Only two months after being assigned by the Government to draft a Decree on certification of fragrant rice exported to the EU, the MARD presided over the drafting and submission to the Prime Minister for signing on September 4. Undoubtedly, this document has a very important meaning for exporting fragrant rice to the EU, clearly stating regulations for enterprises to register for the rice type when exporting to this market.

Right after the Government issued Decree 103, the MARD quickly issued a decision on certification for rice exporters to this market. Currently, three units have submitted their dossiers to MARD, and the certification completion time is within five days. Enterprises can send their registration documents through the online public service portal or by post. The service for granting this certification will be free.

Decree 103 took effect from the date of its signing. The MARD suggested enterprises that have fragrant rice listed in the EVFTA and have export orders for fragrant rice urgently send documents to the Department of Crop Production (MARD) to quickly complete procedures for exporting to the EU.

Right after the EVFTA took effect from August 1, 2020, the EU gave Vietnam a quota of 80,000 tons of rice per year (including 30,000 tons of milled rice, 20,000 tons of un-milled rice and 30,000 tons of fragrant rice).

Annually, the fragrant rice cultivation area in the Mekong Delta provinces reaches about 25% of the total cultivated area, equivalent to about one million hectares, fragrant rice production is estimated at 5.5 million tons, equivalent to about 3.5 million tons of fragrant rice. According to the EVFTA, the amount of fragrant rice exported to the EU enjoying a preferential tariff quota is 30,000 tons, equivalent to 1.2% of the fragrant rice domestically produced. Therefore, the export potential of fragrant rice is great. If the EU regulations are implemented and 30,000 tons of fragrant rice in particular and 80,000 tons of rice in general are exported to the EU with high selling prices, it will contribute to improving the efficiency of Vietnam's rice production.

According to the EVFTA, there are nine types of fragrant rice exported to the EU that are eligible for tariff quotas: Jasmine 85, ST5, ST20, Nang Hoa 9, VD 20, RVT, OM 4900, OM 5451 and Tai Nguyen Cho Dao. Why are only nine types of fragrant rice eligible for the tariff quotas? Is there any chance for Vietnam’s specialty rice such as ST24 and ST25?

- The EVFTA negotiations between Vietnam and the EU have been going on for many years. During the negotiation process, the two sides agreed on nine types of fragrant rice to enjoy the tariff quotas.

However, according to the provisions of the EVFTA, the two sides will review it every year to add new fragrant rice types to the list. For the specialty rice, which has been reputed and won the title of the best rice in the world such as ST24 and ST25, we are going to work with the EU to add them to the list. I believe that with the quality and prestige of the product, our EU partners will accept them.

In recent years, the rice industry has had a policy of restructuring and expanding the acreage of fragrant and specialty rice. Is the EU opening a quota to export Vietnam’s fragrant rice with a volume of 30,000 tons in the first step for the rice industry to access "difficult" markets?

- During the agricultural restructuring, rice is one of the most successful industries. Five or six years ago, Vietnam only had 35-40% of the area of high-quality rice, now it accounts for 80% of the area, even 90% in many localities. Vietnam’s rice export prices increased in the eight months of 2020, exceeding Thailand’s at some point. Vietnam also has a good set of rice varieties, meeting many market segments.

The EU granting a quota of 30,000 tons of fragrant rice enjoying tax incentives is a good sign. Twenty-seven EU countries are "difficult" markets, with high requirements on food safety and origin. Therefore, being accepted by the EU market will contribute to enhance the value, quality and prestige of Vietnamese rice.

It must be affirmed that the volume of 30,000 tons is not huge, but is a potential sign. If people and businesses control the rice quality well to meet partners’ requirements and our rice is accepted by the EU, I firmly believe that the quota will increase.

In your opinion, what should Vietnam's rice industry do in the future to make good use of the opportunities and incentives offered by the EVFTA, to better exploit the EU market?

- In my opinion, the rice industry must do two things well. First, to ensure food security for 100 million people, spend a part for export, especially in the context of severe climate change and shrinking rice land, it is necessary to have a strategy for the rice industry. Currently, our average rice cultivation area is about 7.7 - 7.8 million hectares, the yield is about six tons per hectare. Vietnam has to keep this productivity to ensure enough output.

Second, the whole industry needs to improve the value of rice to increase its selling price and reduce production costs to increase farmers' income. The rice industry restructuring is following that direction.

Thank you, sir!