Export of Quang Tri agro-forestry and fishery products in the course of international economic integration

Sunday - 10/04/2016 20:57
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Mr. Nguyen Huu Dung
Standing Committee Member of Quang Tri Provincial Party Committee, Vice Chairman of Quang Tri Provincial People’s Committee
 
Quang Tri province has geographical and economic advantages and is a transport hub located at the central point of the country, the first point on the main arterial route of the East - West Economic Corridor connecting Laos - Thailand - Myanmar via Lao Bao and La Lay international border gates to the sea ports of Central Vietnam such as Cua Viet, Chan May, Da Nang. This creates a very favorable condition for Quang Tri to expand economic cooperation in the region, enhance trading goods and international transport, as well as develop trading, services, tourism and investment  in collaboration with ASEAN countries.
Current situation of production to the export of agro-forestry and fishery products
Quang Tri has over 30,000 hectares of basaltic soil suitable for the development of strategic crops such as rubber, coffee, pepper. The annual production of rubber accounts for 13,000-14,000 tonnes per year, that of coffee 5,000-6,000 tonnes per year, that of pepper 1,600-1,800 tonnes per year..., which is an abundant and high-quality source of raw materials for export processing industrial output. Besides, Quang Tri has over 100,000 hectares of production forests with reserves of 7.5 million cubic metre of timber and the annual production of seafood making up 15,000-30,000 tonnes, including many specialties such as lobster, mackerel , cuttlefish... This is an enormous advantage for Quang Tri to develop agricultural products with high quality and productivity for export to the world’s markets.
With so many advantages, however, the export of agro-forestry and fishery products of the province has encountered many obstacles over the last years due to shrinking market and exporters’ difficulties in finding consumption markets. Fresh coffee prices have dropped from 3,000 VND to 4,000 VND per kilo. Rubber prices have decreased sharply, equal to only 25-30% of the previous year. Prices of some products have remained steady, for example, tapioca starch has increased slightly by 0.24%; MDF wood has decreased by 4.97%. At the end of 2014, the number of inventory for tapioca starch was more than 3,500 tonnes, that of rubber more than 800 tonnes.
In fact, the export of agro-forestry and fishery products are currently unsolvable problems for export companies. Farmers still face the uncertainty of the product output. The reasons for this are that the knowledge and skills of sustainable production of farmers is limited, products fail to be produced in accordance with the importers’ process and standards which led to products with low competitiveness. Except for deep processing products such as tapioca starch, most of agro-forestry and fishery products are exported in the form of raw or semi-processed, low-quality ones. At present, Quang Tri is facing the reality of importing agricultural products. The main agricultural products imported to Quang Tri consist of rice, sticky rice, maize, coffee (raw), fruit, cattle (cows). Thai rice is dominating the market segment of high quality rice in Vietnam and Thai cows are imported agricultural products into Quang Tri and consumed in the domestic market before being exported to China. This is a proof that Quang Tri products in particular and those of Vietnam in general do not have a competitive advantage because of their low quality.
On the other hand, the lack of market information is still the cause of declining export of agro-forestry and fishery products. Farmers, manufacturers and exporters keep regular update on market information to study customers’ habits and tastes... to meet the market demands, but to run after seasonal orders. Marketing capabilities of the local businesses are limited, apart from traditional markets such as China, Laos, Cambodia, has not yet been extended to major markets such as Europe, Japan, Korea...
International economic integration helps create momentum for the export of agro-forestry and fishery products
The process of international economic integration and becoming a member of the regional and global organizations, together with the signing of the bilateral and multilateral free trade agreements (FTAs) with other countries in the world has opened up a new space for development, creating export opportunities for Vietnamese goods and those of Quang Tri province. In particular, at the end of 2015, the ASEAN Economic Community (AEC) was officially established, some FTAs have been prepared, for example, FTAs signed with the European Union (EU), South Korea, etc.; in addition, Trans-Pacific Partnership (TPP) which is expected to complete negotiations this year will bring more opportunities for Vietnamese agro-forestry and fishery products when most of the tariff barriers for this item are lifted. The exporters of agro-forestry and fishery products can expand market share to regional and global markets, some tax benefits will be exempted. The province’s main export commodities such as MDF, rubber, tapioca starch, coffee, pepper... have an opportunity for growth and productivity improvement. Apart from traditional markets such as Laos, Cambodia, China, when integrated, new markets, such as Indonesia, Thailand, Singapore and Malaysia, will be opened at the same time without tax pressure. A competitive economy will create favorable conditions for businesses in the province to renew itself and improve human resources, capital resources, business administration and management resources.
Besides, My Thuy Port in association with Southeast Economic Zone of Quang Tri Province will be established in the near future is the shortest gateway to the east of the East-West Economic Corridor. Currently, Quang Tri Province is actively calling for investment in the form of BOT to build ports and key projects in this economic zone. The formation of La Lay international border economic zone will promote the socio-economic development of the mountainous areas of the west of Quang Tri province, creating favorable conditions for trade and tourism between Quang Tri and provinces in the Middle - Southern Laos, Northeast Thailand and Northeast Cambodia, enabling the export and consumption of goods, including agro-forestry and fishery products, in such provinces in a more favorable way.
International economic integration brings advantages, opportunities and also many potential challenges for the export of agro-forestry and fishery products. The fully open markets for agricultural, forestry and marine products in the ASEAN region, the import duty of these items are 0%, enterprises will face the stiff competition, the market share will be shrinking and even risk losing domestic market share. There's also internal challenges as we still lack cohesion between sectors, localities and deployment process without the proper preparation of internal resources for both businesses and farmers. Especially for the agricultural, forestry and marine products, which are attached to the object groups vulnerable farmers in integrating. Also, Quang Tri province have not yet to build programs and long term priorities to support the production and export of key commodities of the province.
Solutions to the export of agro-forestry and fishery products
To contribute to implementing effectively the strategy for import and export of goods in the period of 2011 - 2020, projection to 2030 approved by the Prime Minister, striving goods export growth per period from 2016 to 2020 at 12-14% /year and reaching 14-19%/year over the period of 2020-2030, including the period from 2011 to 2020 focusing on the development of production for the export of strategic agro-forestry and fishery products such as coffee, tapioca starch, rubber, pepper, seafood, wood and timber products. The export turnover of the province by 2020 is projected to about 250 million. So how to achieve the above objectives, promote the consumption of the domestic market and export market expansion? This requires the participation of ministries, departments and government agencies at all levels, businesses and farmers in the current period, including the need to focus on some key solutions:
Firstly, for the provincial People’s Committee and departments
To promote agricultural restructuring, setting up specific projects and programs in order to develop comprehensive and sustainable agriculture, link production to processing and consumption, determine the advantages of strategic agro-forestry and fishery products of the province for export to restructure sustainably and improve productivity. To carry on researching and issuing specific policy to support and encourage agricultural production, increase sciencetific and technological concentration in all stages from production, harvesting, storage to processing of agricultural products in order to gradually improve the productivity and quality as well as lower the price. Accordingly, to improve the competitiveness of the Vietnamese agro-forestry and fishery products in general and those of Quang Tri province in particular on international markets.
To strengthen the links between agriculture and industry and trade, produce based on export demands, overcome the shortcomings in the existing model of production and consumption. To issue certain supporting mechanism for a number of strategic and agro-forestry and fishery products with competitive advantages such as rubber, tapioca starch, pepper, seafood, wood and timber products. Policies on debt freezing and rescheduling as well as preferential lending at low interest rates should be provided for the replanting of coffee, rubber, pepper trees and for farmers affected by natural disasters to develop production conditions and contribute to a stable life; and specific needs of policies to encourage organizations and foreign enterprises to invest in agriculture and rural development in particular areas associated processing product sales.
To build schemes on development of key export commodities of the province until 2020 and projection to 2030 with a view to boosting export activities in the province, encouraging the development of producing raw and auxiliary materials for the purpose of production and processing of agricultural goods for export such as coffee, pepper, peanuts, bananas, agro-forestry and seafood processing, fruits and vegetables, timber products...
To provide support for capacity building of small and medium-sized enterprises (SMEs) in the area, enhance information sharing on trade and investment opportunities, expand export markets, improve the effectiveness of market information and forecast, business perception of the barriers of importing countries, avoid risks for enterprises for performance of export contracts.
Secondly, for farmers:
There should be further efforts in the production and improvement of agro-forestry and fishery products’ quality to meet the needs of international consumers. Farmers need to follow proper procedures and quality requirements from importers.
To keep up to date with market information to guide the production and business. Farmers have to gradually give up the habit of doing business spontaneously and change into contract business and affiliate associations. To understand and raise greater awareness of rights and responsibilities in the implementation of economic agreements.
There should be more active measures from the linkage of 4 houses (the state, scientists, enterprises and farmers), in which the link between farmers and enterprises is a direct and regular cooperation.
Thirdly, for exporters:
Enterprises must improve their competitiveness, focusing on products branding, raising the value of Quang Tri agro-forestry and fishery products.
Apart from maintaining existing traditional markets, export companies should seek to expand into other potential markets. Instead of direct confrontation on major markets, businesses should select niche and small markets, focusing on narrow but new and less competitive market segments. In particular, the expansion of the domestic consumer market should also be of concern now.
To improve business capacity, marketing, branding, customer service, companies need to understand their supply chain, also actively research the rules of origin, tariff reductions, technical barriers... in a thorough manner and prepare for an effective negotiation of foreign trade contracts.
In the economic development space for intensive international integration, Quang Tri, the beginning of the East - West Economic Corridor on the Vietnamese side, where there are two international borders, has favorable natural conditions to form a trading flow from the Pacific to Indian Ocean as well as the opportunities for the development of export of agro-forestry and fishery products in the coming years.
 

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