Transforming the mindset from agricultural production to agricultural economy
NDO - 2021 was a challenging year for Vietnam’s agriculture, but the sector managed to overcome difficulties to fulfil their targets successfully. In this interview, Minister of Agriculture and Rural Development Le Minh Hoan reviews the past year and outlines the sector’s sustainable development orientations, in 2022 and subsequent years.
Q: Agriculture was one of the sectors hit hardest in 2021. What is your assessment of the past year?
A: The period around August and September was the most difficult time when social distancing measures were put in place throughout the southern region, with major cities and industrial parks, which are the engine of the Vietnamese economy. At that time, the chain of agricultural products was disrupted, from production to transport and processing. The distribution network came to a standstill and export was also disrupted.
With such difficulties, the set targets were unlikely to be realised. But the sector overcame everything, not only fulfilling, but also exceeded the targets. That came as a result of dynamism and the rapid adaptation of agriculture officials from the central to local levels as well as the whole society. The business community’s resilience and the actions of trade bodies helped Vietnam maintain the markets. Amid restrictions and rising input costs, farmers were still able to produce agricultural products, so that the agricultural chain could recover quickly.
We can also take pride in the fact that despite having more than ten million people placed under social distancing measures, food was able to reach every home. During that difficult period, ensuring food security for the people has reinforced public confidence in the Party and State’s leadership.
The Ministry of Agriculture and Rural Development, through its special working group, has also done its best to help both farmers consume products and businesses with processing materials.
It is impossible not to mention that the connection between ministries and branches together also contributed to the results of the agricultural sector over the past year. In particular, in the context that, at the same time, each locality had different regulations on social distancing, the connecting and coordinating role of the Ministry's working groups and other ministries, such as Ministry of Transport, Ministry of Industry and Trade, Ministry of Public Security and Ministry of Health, are all very important.
Thus, it can be said that the overall achievement of the industry in 2021 is a great effort of the entire society. In particular, I am proud of the team of agricultural officials from the central to local levels in the past year, who have done their best and brought about the common results as we all know. Since then, once again affirming the supporting role of agriculture when the country falls into difficulties.
Q: During the difficult time of social distancing, each locality had different regulations in controlling means of transport through their province, that has also greatly affected the circulation of goods and disrupted the agricultural product chain. What measures did the Ministry of Agriculture and Rural Development take to overcome and quickly solve the congestion of agricultural products at that time?
A: As I said, initially there was a lack of consistency due to local regulations on social distancing. But then, through seminars in each region, as well as through forums connecting the production and consumption of the Ministry of Agriculture and Rural Development and the coordination of other ministries and branches, we don't let supply chain disruptions linger.
Maybe, there is not yet a definite regulation, but in each moment, in each knot, we have promptly removed it. Therefore, the enterprise has access to the raw material areas, and at the same time, the agricultural products of farmers from the raw material areas to the processing factories to create high-quality products.
From there, both domestic and foreign markets will gradually be activated. Through that, agricultural products and processed products with high added value will be formed. The product chain comes together with open markets, creating an added value chain. From that added value, it is possible to create statistics on the achievements and results of the agricultural sector, the sub-sectors of the intra-industry from cultivation to animal husbandry and fisheries.
Spring arrives in a H’Mong village. (Photo: Thuan Viet)
Spring arrives in a H’Mong village. (Photo: Thuan Viet)
Q: With unprecedented results, we also have devised unprecedented solutions, with these results, how will it create momentum for the new strategy the Ministry set out in the coming year?
A: In my opinion, what we learned during the pandemic is really important. If during that time, we came up with solutions to handle certain situations, over the coming period, we must consider it as additional solutions that will give us a process, regulation, and scenario, for us to respond in a flexible manner for any situation.
If it weren't for the epidemic, the nature of the market would still be volatile, what is considered the core value must be added. For example, production is no longer a decisive issue to develop the agricultural industry, but it is necessary to focus on strengthening the supply chain. It is necessary to determine the market size throughout each period so that we can adjust production to suit the scale and situation.
That supply chain must be secured by the logistics system in the agricultural sector. We used to talk about export-oriented logistics in the past, but now, with a market of one hundred million people, we must invest more in the supply chain of the domestic market. To participate in the global supply chain, the domestic supply chain must first secure our 100 million people.
Therefore, in the Government’s recent economic recovery programme, the Government has approved our proposal to invest in the supply chain and logistics of the agricultural sector, which will create foundations for distribution while helping the domestic market in a more proactive and less dependent manner.
Secondly, it’s data and information. I have once said there is a lack of information sharing in agriculture within our country. The problem has already posed difficulties for the sector’s development. In the context where many other factors appear, the lack of information can lead to interruptions. The lack of data and information will result in surplus or shortage of goods and strains in the supply chain.
Therefore, the data-driven digital transformation in agriculture and data transparency in the supply chain is crucial. Through a database, the Ministry of Agriculture and Rural Development will promote its coordinating role. When we direct production in a market economy, there are times we have to intervene within the market. Normally, the market will operate on its own, but whenever there is an interruption or abnormal development in the market, the State must intervene and play the role of coordinator in production, distribution, and circulation.
That's what we have learned after the COVID-19 pandemic and the shortcomings of the agricultural industry have existed even without the pandemic. As the market can become volatile due to many impacts, we must be ready and develop flexible adaptation plans for different scenarios. It requires a more dynamic thinking rather than just a complete plan. Adaptive flexibility is the key to success.
Q: Vietnam's agricultural export value reached a record high in 2021, so has the Ministry of Agriculture and Rural Development set a higher target for agricultural exports in 2022?
A: I have travelled to many European countries and realised that Vietnam's export value has increased over the years, but it is unsustainable and spontaneous.
It means that the export of goods is mainly due to the dynamism of enterprises who connect with foreign markets to export goods, but we have yet to have a sustainable export strategy for each type of market, including the way to promote exports to each market.
Most of our export products to foreign markets are to serve the demand of Asians living in those countries and our products have not yet firmly penetrated into the major distribution systems of those countries.
Therefore, although the export value increased rapidly, it is not sustainable. For example, when we see the high prices of longan and lychee on the shelves in Japan and the United States, we feel happy and proud. But in fact, logistic costs already account for the majority.
The Ministry of Agriculture and Rural Development is consulting with embassies and trade offices abroad, both in the EU and China, to develop a sustainable agricultural export project, under which we should build standardised raw material areas.
We have to start from the local raw material areas where the farmers must follow the standardised cultivation process and use fertilisers and pesticides in accordance with the market requirements.
If agricultural products are not clean, then processing is also not clean. Even enterprises and logistics enterprises must participate in the chain to create a more competitive value.
In the near future, the Ministry of Agriculture and Rural Development will establish an association alliance of agricultural exporters with the participation of logistics businesses for the first time to reduce intermediary costs.
We discussed with airlines such as Bamboo Airways and VietJet Air and they basically agreed to reduce transportation costs for exported agricultural products. When the sustainable agricultural export project is implemented, I think we will not only export 48.6 billion USD, but also a higher and more stable value.
Q: You have repeatedly raised this point of view that the agricultural sector must switch from thinking about agricultural production to agricultural economics. How will this thinking be expressed in 2022?
A: The goal of agriculture following the agricultural production thinking is to create higher values. In the triangle development of State – Business – Farmer, the sides must work together and support each other, towards creating a common development space, supplement strength and utilise each other’s advantages. When the Ministry of Agriculture and Rural Development sent out this signal, the enterprises made enthusiastic responses.
In my opinion, the development of agricultural support policies should embrace the breath of life and resonate with the market thinking of businesses and the production of farmers.
If the policies are in the cold room while farmers work in the field, there will be lameness in practice. The businesses do not have to wait for support policies, but use recommend policies in practical ways.
In 2021, VARIABLE was the only word used for the agricultural sector. However, through the fluctuations, we can clearly see the advantages, disadvantages and driving force for a stronger transformation of agricultural economics thinking.
With the thinking of agricultural economics, it is possible that a certain rank in the output of agricultural products may decrease; however, their values will be higher, thereby farmers can earn higher incomes.
Thank you very much!
Production manager: VIET ANH, XUAN BACH
Content: THANH TRA
Design: DANG PHI, THANH TRA
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