New World Bank report says reforms and policy shifts essential to success
Hanoi, September 27, 2016 – Vietnam’s agriculture and overall food system are at a turning point. While having a strong track record and ample opportunities for future growth—both at home and abroad—the sector faces major demographic, economic, and environmental challenges. The Vietnam Development Report 2016, “Transforming Vietnamese Agriculture: Gaining More from Less,” launched today, details challenges and opportunities facing the sector.
To remain competitive in the international market, the report says Vietnam needs to improve supply, quality, and food safety with added value. It outlines an agenda of short- and longer-term strengthening of public and market institutions which will be needed to achieve the ambitious goals for Vietnam’s agriculture and overall food system.
“The country’s agricultural output is exacting a price on the environment,” says Ousmane Dione, World Bank Country Director for Vietnam. “’Business as usual’ is no longer an option for the sector–growth has slowed down, it is vulnerable to climate hazards, and leaves a large environmental footprint. Change will help overcome these challenges, ensure the future of agricultural growth, and better meet the expectations and aspirations of the people of Vietnam.”
The report notes that Vietnam’s agricultural sector has made enormous progress. The country has emerged as one of the world’s leading exporters of agro-food commodities and is among the top five for aquatic products, rice, coffee, tea, cashews, black pepper, rubber, and cassava.
However, the sector is experiencing a low quality of growth, as shown by low profits for smallholder farmers, considerable under-employment among agricultural workers, unreliable product quality and food safety, and limited technological or institutional innovation. Agricultural growth has mostly involved an increase in cropping areas or more intense use of inputs (such as fertilizers) and natural resources (such as water).
The report offers various policy recommendations to address the challenges. The government can deploy an effective combination of improved regulations, better incentives and streamlined services to stimulate and monitor a greener agriculture and a more effective food safety and consumer protection system.
It can help with policy instruments to better manage agriculture related risks, as well as create and maintain a favorable enabling environment for agribusiness.
In a more flexible, market-driven, and knowledge-based agriculture system, reducing direct state involvement will make the modernization of the Vietnamese agro-food system smoother.