Vietnamese agriculture suffers from corona epidemic

In the first days of 2020, an acute respiratory infection caused by a new strain of corona virus (nCoV) has caused severe agro-fishery exports. The prolonged epidemic will continue to push Vietnamese agriculture into difficult situations, forecasting a year of poor growth.  

Unable to export to China, in recent days there are places where the price of watermelon is only 1,000 VND / kg. Photo: Nguyen Thanh.

Agricultural output decreases sharply

After a long wait to reopen Vietnam-China border markets on February 9 as planned, recently the Consulate General of Vietnam in Guangxi (China) said the provincial government of Guangxi decided to extend the closure of border markets and continue to suspend exchange of goods for border residents until the end of February. There is no official information on the Yunnan provincial government, but due to the complex developments of the nCoV epidemic, it is likely that the Yunnan provincial government will make the same decision.

According to the Ministry of Industry and Trade, for many years, exports in the form of exchanging residents at border markets have been the main export method for some agricultural products of Vietnam, including dragon fruit and watermelon. Therefore, the decision to extend the time to close the border markets and continue to suspend exchange of goods of border residents is expected to have a significant impact on the exports of these products.

Assessing the impact of the epidemic on the export of agricultural products in the future, Phan Van Chinh, Director of the Import and Export Department (Ministry of Industry and Trade) said: "If the disease occurs within 1-3 months, cross-border agricultural exports will be affected by US$400-600 million. If the epidemic lasts for more than three months, the impacts will be about $800 million.

On a large scale, the Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the nCoV epidemic affected agricultural economy in three aspects. "The first is the impact on agricultural trade. China is a market that accounts for 24 percent of total Vietnamese agricultural exports to the world. In January, the export value of agricultural products to China fell by 14 percent. We think that in the future, trade effects will be very clear and very significant," he said.

The second influence came from the perspective of investment because businesses of the two sides were trading and the epidemic applied preventive measures affects the exchange of trade and investment services. In addition, some agricultural products of Vietnam have been accepted by the Chinese side, up to the final risk assessment stage to license for official export, this time due to travel restrictions, delegations from China cannot go to Vietnam and vice versa, so it is impossible to continue negotiations and agreements.

Cannot be optimistic

Dang Kim Son, former Director of the Institute of Policy and Strategy for Rural Agriculture Development (MARD), said the most worrying issue for Vietnamese agricultural products and farmers is still markets. Currently, the nearest and largest market of Vietnam is China which has been directly affected by nCoV. This will cause market demand to return to basic products such as foodstuffs, and to ignore other products such as fruits. Thus, the impact on fruits and vegetables in the long-term is available. Son said demand decreased once more from the effects of limited trade such as supermarket chains and retail systems stalled. Meanwhile, trade was interrupted by epidemic preventing activities of the market, causing high transaction costs, and fresh products of Vietnam would not be preserved.

"Not to mention this disease at the beginning of 2020, the Minister of Agriculture and Rural Development has forecast that 2020 will be a difficult year for the agricultural sector. For example, the African swine fever epidemic caused hardship for farmers last year. In 2019, by 2020, there will still be many other impacts such as technical difficulties, re-herds and capital. In addition, this year, agriculture faces the drought of the Mekong Delta, for a long time this situation has not occurred. These impacts are still hidden, but we have to overcome these difficulties. Thus, it is impossible for us to be optimistic with the difficulties in agriculture this year," said Dang Kim Son.

On solutions to remove difficulties for the agricultural industry amid the epidemic, Minister Cuong said that the first job was to review the total volume of agricultural products and commodity groups for export to China, specifically for each month from now to the last months of the year, based on the evolution of the situation in each stage with a plan to cope, strengthen trade in the country; focus on processing, suggest processing enterprises closely associate with the raw material areas, reduce fresh exports and raw exports.

It is not known when the nCoV outbreak will stop. In February, MARD will promote trade in some markets, for example, it will send a mission to the United Arab Emirates; the mission continued to the US market, Japan market, Brazil market and other markets. "The promotion is a longer-term strategy. This time needs promoting more impetuously, facing difficulties with the nCoV epidemic continues to be one of the lessons and an urgent opportunity for us to continue focusing on agricultural restructuring towards regional commodity and deeper processing, close linkages to create long value chains, opening up many markets to export products," Cuong said.