Improvement of food safety standards is a key for exports of agricultural products

Applying internationally recognized certification systems will help Vietnam increase exports, diversify opportunities to enter new markets, as well as expand the supply of safe food in the domestic market.  

The lack of food safety standards is one of the causes inhibiting the business growth

Expanding market

Mr. Nguyen Minh Kha (Dong Nai) said he started raising poultry in 2009. Although his farm's products meet the standards for exports to Japan, he still wants to raise the brand for easier access to regional and international markets as well as to expand its consumption in the domestic market.

With the advice of the International Finance Corporation (IFC), five months ago, Mr. Kha's farm was certified Global G.A.P. The application of Global G.A.P is bringing positive results to his farm. Specifically, the rate of death and disposal of poultry has decreased remarkably. In addition, for the same number of days of farming, the weight of chickens are now 3-4.6% heavier than the chickens farmed before application of the Global GAP. Kha said that the Global G.A.P certification will help his farm's products access to fastidious markets such as Europe. Meanwhile, the increase in productivity will help to make up the increase in input costs.

Therefore, Mr Kha is going to build a new farm with 10 Global G.A.P certified chicken cages by 2019 and employ more than 30 workers for the farm.

Mr. Kha's farm is one of two Global G.A.P certified poultry farms with the advice from IFC.

Over the past year, IFC has helped to build 40 cages for two independent chicken farms importing chicks from an IFC's client, which is Bel Ga Joint Stock Company - a world leading poultry breeding provider. By establishing a system that focuses on hygiene and biosecurity, reducing antibiotic use, and performing traceability, along with many other processes and standards, two farms that come from Binh Phuoc and Dong Nai have been able to provide about 3 million chickens, equivalent to over 6 million tons of chicken meat certified Global GAP for domestic market and export to Japan in the past year.

According to IFC, unsafe food causes disease to 600 million people and wastes more than US$ 100 billion as a result of costs arising from health care, reduces labor productivity in emerging economies.

In Vietnam, food and beverages account for 35% of the total monthly household expenditure. The annual growth rate of the industry is 15%, which is one of the leading markets in Asia. But, the lack of food safety standards can curb the development potential of the industry, threaten consumer health, and push local companies out of modern food chains and hamper revenue growth of these companies.

Thus, the improvement of food safety standards to access to new markets is a key for Vietnam to achieve its export target of US$ 40 billion for agricultural products in 2018 and following years.

Investment for the future

Despites of benefits, the cost for investment and maintaining the certification is still a concern of enterprises. However, according to Kha, the annual cost of US$ 2,500 to maintain the Global G.A.P certification, along with other costs to reorganize production, is absolutely reasonable.

Fred Devis, Executive Director of Bel Ga Corporation, said that investment in food safety standards in many cases is still considered as a cost of the business. But in fact, food safety helps to open up new markets and brings high return on investment in the long run, thereby making good the costs spending for implementing high food safety standards.

IFC has helped to raise awareness and to build capacity for food safety for Vietnamese agribusinesses from 2017. Within three years, in collaboration with New Zealand and the Slovak Republic, IFC will work with leading agribusinesses and their supply chains to improve food safety and help them achieve internationally recognized certificates.

By implementing modern food safety management systems, the project is expected to help at least 5 companies and thousands of farmers in their value chain participation, raising total sales by US$ 30 million. In addition, these companies are likely to increase by about US$ 25 million per year after the completion of the project.