Difficulties in expanding production
Vietnam shrimp industry is considered very promising thanks to EU – Vietnam Free Trade Agreement (EVFTA), which will take effect in 2019. EU, US, Japan and China are the largest shrimp import market of Vietnam nowadays. In the future, two markets of EU and US are considered the most potential market to increase Vietnamese shrimp export value. However, these two markets are also difficult markets, with high technical requirements. They are forcing the shrimp industry to change itself to meet these requirements.
Looking at the current situation, most shrimp production at household scale is still quite small, so it is difficult to control the goods quality. Typically, in Ca Mau province, where the total area of shrimp farming is up to 280,849 hectares and there are up to 30 processing plants with a capacity of 250,000 tons / year. This is the local assessment that many factories have modern technology equipment compared to the region and the world to produce more than 137,000 tons of shrimp each year, of which more than 120,000 tons are exported.
However, according to the leadership of the Ca Mau Department of Agriculture and Rural Development, the shrimp industry in Ca Mau province still has many difficulties and limitations such as development of production that is out of the provincial planning. Along with that, the infrastructure has not met the demand of production development, mostly about electricity and irrigation. Meanwhile, the production organization is still small and fragmented, the cooperation and linkage in production has much effort but the results are still limited.
In particular, the application of science and technology is limited, especially for super intensive farming. Standard farming process has not been applied widely, most of farmers are still using their experience. The application of quality standards is not much. Regarding the environment and diseases, it is also worrying when the water environment is polluted, there is no environmental monitoring network, so diseases on farmed shrimp are always potential risks.
In particular, in terms of input and output prices, according to the assessment of the Department of Agriculture and Rural Development of Ca Mau province, the price of input materials has always increased, especially food and shrimp seed. Shrimp prices are always very unpredictable, sometimes falling deeply, even below the cost of farming, causing ineffective production and losing money for farmers.
The difficulties of shrimp farmers in Ca Mau are also common difficulties for many shrimp farmers across the country. Currently, the number of businesses that are able to meet the technical standards of the developed market can count on fingers of one hand. But these businesses themselves also face many obstacles when expanding production to export.
According to Mr. Le Van Quang, Chairman and General Director of Minh Phu Seafood Joint Stock Company - Vietnam's leading shrimp export company, it is very difficult for enterprises to rent land from farmer. Thus, Minh Phu has found a social enterprises model without consolidating and exchanging plots nor requiring the large scale areas. Accordingly, farmers contribute land and do business on their own land. Since then, it has become a business that creates a large volume of goods.
However, according to Mr. Quang, what makes this model unable to distribute profits is because businesses have to carry out too many certifications if they want to enter different markets and it is very expensive.
Every market has a certificate so we need to adapt a lot of certifications. Some certificate can cost up to 8 billion VND and it takes 1-3 years for getting a certificate. So who could stand it? Besides, it must be noted that each year, we have to re-evaluate the certification at a cost of several tens of thousands of dollars, Mr. Le Van Quang said.
Standardize the chains to create quality goods
In January 2019, former US Secretary of State John Kerry paid a working visit to Vietnam. In this meeting, Seafood Watch (SW) - a US non-governmental organization that evaluates the quality of imported seafood into the US market has chosen the Department of Private Economic Development (Board IV - Society co-consulted the Prime Minister on administrative procedure reforms) as a Vietnamese partner to advise the Government on the standards of commercial shrimp if it wants to enter the US market.
In order to find a sustainable development direction for Vietnamese shrimp, SW and Board IV have come up with a solution at the workshop series of “Model of shrimp production chain with export standard to the US market” in February 2019 in Soc Trang, Tra Vinh and Ca Mau provinces.
The results of these workshops will be discussed at the constitutional session, before the Vietnam Economic Forum reports to the Prime Minister in plenary session, it is expected to take place in March 2019 here in Ha Noi.
Mr. Josh Madeira, Head of Marine Conservation Policy, Seafood Watch Program (SW), USA informed that the US is a big importer of shrimp. Among export markets that seeks to export shrimp products to the US, Viet Nam is one of them. Viet Nam also looking forward to expanding shrimp products in the US market. “The view now is not to expand the farming area, but to increase the quality of shrimp. In order to increase value in the US market as well as other major markets, it needs to understand the standards of the markets so that the country is able to establish a production chain, increase the value of farmed shrimp”, said Mr. Josh Madeira.
Currently, SW's partners are committed to increasing the procurement of environmentally sustainable products. According to SW statistics, 90% of the largest US retailers will only buy seafood from suppliers that ensure environmental sustainability, in Europe this rate is 75%. Retailers have specific schedules, preparing for the next 2-3 years, the demand for sustainable products is very high and this demand increases year by year.
SW said that after conducting a survey of its partners on the reason for buying environmentally sustainable products, the result showed that it is because the last consumer expects that suppliers must ensure the environmental protection environmental standards while producing products. Since then, SW offers criteria such as law, food, traceability, environmental protection, etc. to apply to shrimp farmers. ASIC standards applied in farms of SWs applied in Vietnam include: Traceability; Shrimp health management; Aquatic resources / Seed; Food sources and food management; Managing environmental impacts.
Currently, Board IV is proposing models from SW standards. Soc Trang, Tra Vinh and Ca Mau province will pilot the selection of shrimp farmers, food supply, infrastructure, banks, etc. forming a closed chain according to the standard process. The first step will be to pilot on a model of 10-50 shrimp ponds / local to ensure the quality of Vietnamese commercial shrimp can gain a yellow card and green card into the US market.
Huong Tra (source: baochinhphu.vn)