Covid-19 epidemic puts pressure on agriculture restructuring

The spread of the coronavirus disease (COVID-19) has affected most aspects of Vietnam’s economy, especially the agriculture sector. Experts are advising the agriculture sector to focus on restructuring of production zones and deep processing, strengthen connectivity to develop value chains and seek alternative markets to minimize negative impacts, creating a foundation for growth once the epidemic is controlled.

Extensive impact on agriculture

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the bad effects of the epidemic are huge, and could last for a long time. It is predicted to impact the trade flow of agricultural products between Vietnam and China due to the fact that China is a major export market for Vietnam’s agricultural products, accounting for 24 percent of the country’s total farm exports. Since January 2020, the epidemic has reduced 14 percent of Vietnam’s export value to China. In addition, it impacts contract signings between Vietnamese and Chinese partners. Granting of official licenses for some goods has been suspended due to the epidemic since delegations from both sides cannot conduct working visits.

The Ministry of Agriculture and Rural Development (MARD) has offered a number of solutions, including a review of agricultural products and groups of goods exported to China in order to provide different scenarios, and promotion of domestic trade to serve the large 96-million people consumer market. The MARD will also support processing enterprises in connecting with raw material areas to reduce the volume of exported fresh products. It also asks the logistics sector to check their cold storage to support farmers and maintain the quality of agricultural products for longer. The ministry also updates information for associations and the business community regarding farm exports to foreign markets, especially China.

The MARD is also actively coordinating with the trade offices of Vietnamese embassies around the world to promote agricultural exports in key, potential and niche markets. It is also organizing export promotion delegations to foreign markets, including the United Arab Emirates on February 15, the US from February 22, and Brazil in March.

Opportunities for agriculture restructuring

Director of the Institute of Agricultural Market and Institution Research Dr. Dang Kim Son praised the short-term and long-term solutions of the agriculture sector in coping with the COVID-19 epidemic. At the beginning of 2020, Minister Nguyen Xuan Cuong forecast that 2020 would be a difficult year for the agricultural sector, including the impact of African swine fever, in terms of technical difficulties and capital. In addition, the agriculture sector continues to face a drought this year.

“Therefore, it is hard to be optimistic about the agriculture sector this year,” said Dr. Son. He recommended that apart from close coordination with localities to convert some plant growing and animal breeding to suit market demand and to take advantage of the comparative advantages of each locality, the agriculture sector needs to recognize this as an opportunity to promote restructuring based on deep processing, building value chains and developing markets.

Agriculture experts are also advising growers and enterprises that in order to prepare for farm produce exports after the epidemic, they should take into account long-term solutions, including upgrading and completing infrastructure for production, promoting science and technology application, and boosting aquaculture, rice production and other high-value crops.

In the meantime, businesses operating in the agriculture sector need to take the initiative in improving the quality of processed products, boosting trade promotion and strengthening connectivity to develop domestic and export value chains.