Agricultural sector receives good news from large markets

Thursday, 2020-09-17 17:43:17
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Minister of Agriculture and Rural Development Nguyen Xuan Cuong
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NDO – Since the EU - Vietnam Free Trade Agreement (EVFTA) took effect, the agricultural sector has constantly been receiving good news as many agricultural products are now officially being exported to the EU. On the occasion, Minister of Agriculture and Rural Development Nguyen Xuan Cuong granted an interview to the media about the developing brands and new markets for agricultural exports.

Question: From earlier this month to now, many key agricultural products of Vietnam have entered the EU. How do you assess the opportunity for exporting agricultural products to the EU since the EVFTA took effect?

Minister Nguyen Xuan Cuong: In the EVFTA negotiation process, the agricultural sector identified its many advantages on three main pillars.

Firstly, it is possible to promote agricultural export trade in certain advantageous commodity groups such as shrimp, coffee, fruit and rice. Secondly, through the implementation of the agreement, we can update using Europe's modern processing technologies through FDI investment. Thirdly, we can improve governance capacity through training cooperation programmes on management and improving skills for market development, for mutual development.

The EVFTA was signed on June 30, 2019 in Hanoi. Following the approval of the European Parliament (EP), the European Council (EC) and the Vietnamese National Assembly this year, the deal officially came into force from August 1, 2020.

Accordingly, the agricultural sector had cooperated with the Ministry of Industry and Trade, businesses and farmers to actively prepare conditions before the agreement takes effect.

The agricultural sector actively promoted production restructuring in a linked chain from material organisatio to deep processing and product consumption.

Therefore, as soon as the agreement came into effect, we seized upon the opportunity, focusing on boosting export orders to take advantage of tariff and quota preferences. According to preliminary statistics, after only one month of the EVFTA agreement, agricultural product exports to the European market could have increased by 15-17% compared to July 2020.

Question: Could you tell us which products currently have advantages in terms of their export to the EU?

Minister Nguyen Xuan Cuong: On September 16, the Ministry of Agriculture and Rural Development (MARD) cooperated with Gia Lai province to hold a ceremony to launch Vietnam's first batch of coffee and passion fruit to the EU under EVFTA. Following this, on September 17, a ceremony was held in Ben Tre, to announce the export of fruit to the market with EVFTA tariff preferences.

Earlier, a ceremony was held on September 11 in the south-central province of Ninh Thuan to announce the export of the first batch of Vietnamese frozen shrimp to the EU following the implementation of the EVFTA agreement.

Specifically, with coffee products, we can add value to the EU market whilst enjoying a preferential tariff of 0%. In August 2020, Vietnam's coffee export value to the EU market was estimated at nearly US$76 million, up 34.7% compared to July 2020.

The EU is also the largest export market for Vietnamese coffee, accounting for 40% of the total volume and 38% of the total export turnover of the whole country (average coffee export value to the EU reached US$1.2-1.4 billion per year for the past five years).

Vietnamese rice exported to Europe also saw positive signals. Nearly one month after the implementation of the EVFTA, the positive effects have spread to the rice industry, in particular, the price of Vietnam's rice exports to the EU market has increased from US$80-200 per ton.

Thanks to the EVFTA, opportunities for exporting fruit and vegetables to the EU are opening up since August 1. Currently, the EU is the fourth largest export market for Vietnamese fruits and vegetables. The existing platform, along with tariff and quota preferences under the EVFTA are empowering Vietnam to increase the competitiveness of its fruit compared to the competition.

In particular, the export value of Vietnam's fruit and vegetable products to the EU in August 2020 was estimated at US$ 14.7 million, up 25.2% over the previous month.

Question: The opportunities are great, but the requirements from the EU market are also very strict. So, what should the agricultural sector do to respond to these?

Minister Nguyen Xuan Cuong: The agricultural sector is stepping up the restructuring of commodities, focusing on producing goods in a linked chain from raw materials, processing, and especially packaging and labels.

Accordingly, it is necessary to focus on exploiting a number of industries such as vegetables, fruit, aquatic products and industrial crops. These commodity groups have focused on speeding up the chain of production and carefully preparing commercial skills to enjoy a preferential tariff of 0% from since EVFTA Agreement came into effect.

Meanwhile, it is necessary to restructure agricultural production in the chain, including a close link between cooperatives, businesses and farmers; forming a closed process from material organisation to processing, ensuring traceability, food safety. The factors will help to exploit the EU market fully.

In particular, we must not only exploit the absolute value of exports to the EU, but use the market to prove the high standard of Vietnamese agricultural production and the linking of Vietnamese commodities groups with other markets in the world. From there, it will be possible to expand the process of organizing production to create better livelihoods and profits for farmers.

In the production chain, enterprise is an important nucleus, not only bringing scientific and technological advances into production, but also playing an important role in the organisation of processing and trade. Therefore, it is necessary to take care so that all sectors of business, especially ethnic businesses, grow to ensure linkages with farmers through cooperatives and the forming of production chains.

Organizing agriculture on the basis of single households is still modern. This can still be a principle and requirement to ensure victory in Vietnam’s international integration in the global agricultural sector.

Thank you very much for your interview!