Small production hindered Vietnamese shrimp industry

Small production has been the "Achilles heel", making it difficult for Vietnamese shrimp to penetrate deeply into markets.

The shrimp industry is aiming for $ 10 billion in 2025. Photo: Internet

It is difficult to trace origin

In the first 3 months, shrimp exports continued to face many difficulties, down 11% in volume and 16.2% in value over the same period in 2018, reaching 67.7 thousand tons with a value of 611.3 million dollars. In the future, shrimp export is expected to continue to face strong competition.

The difficulties of the shrimp industry come from many sides. Typically, there are some factors of shrimp such as: India, Ecuador, Indonesia are planning to develop shrimp farming, leading to high supply, the price of shrimp cannot increase in the first months of the year ... However, when placing the Vietnamese shrimp industry in the context of the current strong economic integration, Mr. Tran Dinh Luan, Deputy Director of the General Department of Fisheries (MARD) said: Vietnam shrimp industry has many advantages but they must also meet a big challenge of climate change. If we want to increase areas of shrimp farming, we must invest in science, technology and equipment. Small-scale production currently accounts for 70-80% of shrimp production, this situation leads to difficulties in integration and meeting the requirements of traceability. "With the context of small production, poor links, difficulties in source traceability and infrastructure, the production cost of shrimp is high, causing weak competitiveness," said Luan.

Regarding this issue, Mr. Le Van Quang - Chairman of Minh Phu Seafood Joint Stock Company said: The biggest bottleneck of the shrimp industry is small production. With small production, origin of goods are untraceable so they do not have international certification. "It is very difficult for us to sell goods with the above status. The selling of shrimp in international markets is required to have international certification. Each market requiresdifferent international certificates. When farmers produce in small scale, they cannot get those certificates" Mr Quang said.

Promoting links between industries

In the Decision 79/QD-TTg dated 18 January 2018 of the Prime Minister promulgating the National Action Plan to develop Vietnam's shrimp industry by 2025, the expected target set for 2025 is a shrimp export value of 10 billion USD; of which 8.4 billion USD are giant tiger prawn and white-leg shrimp. In order to achieve these numbers, we need to try our best, especially solving the problem of current small production.

Mr. Tran Dinh Luan also stated: Tracking seventy four linkage chains of shrimp production in three provinces of Ca Mau, Bac Lieu and Soc Trang showed that profit increased, investment costs decreased by 10-30% and selling prices were stable. “Industry linkage is inevitable, one of the key tasks of the agricultural sector. Hopefully, in the future, the shrimp industry will test the complete link chain from input materials, scientists to businesses, banks ... We also want to have insurance mechanisms attached to the chain of linkage to improvethe brand and competitiveness of Vietnamese shrimp ", Mr. Luan stressed.

From a business perspective, Mr. Quang made a more specific analysis: enterprises have been searching for solutions for linkage chain ofshrimp farming for many years. First, businesses buy land or rent land to raise shrimp but they cannot. After that, they establish a joint stock company so farmers contribute land to raise shrimp but it couldn’t. Finally, Minh Phu business chose the solution to establish a social joint stock company. Accordingly, all farmers will contribute land, raise and sell products on their own land. Thus, a farmer is considered as a shrimp pond of a large enterprise and the problem of traceability for international certification can be solved.

However, Mr. Quang also stated that enterprises face certain difficulties when they deploy industry links in this form. Specifically, social enterprises are entangled with the provisions of the Securities Law. "Companies with shares of 100 or more shareholders, charter capital of over VND 10 billion must operate under the Securities Law. Meanwhile, social enterprises do not require farmers to contribute their shares but offer them voluntarily. When they do good business they participate, if they are not good, they will leave. We recommend that the Government say social enterprises are not subject to the Law on Securities" Mr Quang said.