The Trans-Pacific Partnership Agreement (TPP) which currently involves12 countries is expected to assist the local livestock breeding sectorby luring more foreign investment, but it appears hard to make this cometrue in the context that imported food is flooding Vietnamese market.An analysis by the Vietnam Investment Review.
Figures from theMinistry of Planning and Investment’s Foreign Investment Agency showthat as of December 15, 2013, there were a total 501 foreign directinvestment (FDI) projects in agro-forestry-fisheries worth 3.35 billionUSD in total committed capital but representing only 1.5 percent of thecountry’s total FDI capital.
Of this 3.3 billion USD, investmentsinto animal feed occupied for a lion’s share of more than 94 percentwhile over 4 percent of the capital was in breeds and merely 1 percentwas in animal husbandry, according to the Ministry of Agriculture andRural Development (MARD) statistics.
While livestock breeding is less attractive to foreign investors, foreign stock has flowed into the Vietnamese market.
Lastyear, Vietnam imported 167,000 cows and 96,000 tonnes of poultry,irrespective of tens of thousands of cows imported into Vietnam viaborders with Laos and Cambodia and poultry volumes illegally enteredVietnam through borderlines with China, according to figures from MARD’sAnimal Husbandry Department.
At present, cattle imported intoVietnam from Australia, New Zealand and ASEAN members incurs 5 percenttariff while fresh or frozen cattle meat bears 7 percent tariff.
Withthe ratification of the TPP hopefully within this year, the tariff willfall to zero percent, facilitating the presence of more foreign stockand food in the Vietnamese market.
“The livestock breeding sectorwould be at disadvantages following ratification of the TPP. Forexample, after TPP ratification, made-in-Thailand chickens would beshipped to Vietnam and sold at lower prices compared to local ones sincewe have to import most from breeds to food and veterinary drugs for thesector,” said Nguyen Phuong Thanh, Chairman of the Asia-Pacific ImportExport Joint Stock Company.
Deputy head of the Animal HusbandryDepartment Tong Xuan Chinh added that besides TPP, Vietnam is about tosign a string of free trade agreements (FTA) under which manymade-in-Vietnam items will more easily enter relevant foreign markets.
Inreturn, some foreign food will have more chance to ramp up presence inVietnam and in the livestock breeding sector cattle and poultry food offoreign origin will get the first tickets.
“To survivecompetition right in the home ground, the [animal husbandry] sectorneeds to restructure, focusing on some key products only,” said Chinh.
“Therewill be enough time for us to change if we start right from now. Weshall only develop advantageous products like pork and poultry. Besides,a shift from individual fragmented farming into farm-based and enclosedmodel and lower feed cost is a must.”
Economic experts wereconcerned Vietnam’s livestock breeding sector could hardly compete withforeign players in the home ground on the back of tariff removalfollowing TPP ratification.
From other angle, Chairman of theVietnam National Animal Husbandry Association Nguyen Dang Vang saidinternational integration would entail opportunities for the sector tolure more foreign investment.
The four areas the animal husbandrysector urgently sources investment are processing industry, cowraising, breed production and equipment manufacture serving farm-basedbreeding of cattle and poultry, Vang noted.
From the part of firms, they said doing business in this field is too risky though there is still room for development.
Besides, it is not easy to benefit from investment incentives.
Accordingly,in 2010 the Government issued Decree 61/2010/ND-CP providing incentivesto stimulate businesses to invest in agriculture and rural development.
However,until present agricultural sector projects enjoying the incentives haveonly accounted for less than 1 percent of total project numbers.
“Thatwas because the procedures to enjoy these incentives remain complex.Lack of state budget to execute incentive policies is another issue,”Chinh said.
In late 2013, the Government issued Decree210/2013/ND-CP amending Decree 61/2010/ND-CP with more preferences toagricultural sector investors.
The decree was hoped to fuel investment into agriculture, particularly livestock breeding in the upcoming period.-VNA
Figures from theMinistry of Planning and Investment’s Foreign Investment Agency showthat as of December 15, 2013, there were a total 501 foreign directinvestment (FDI) projects in agro-forestry-fisheries worth 3.35 billionUSD in total committed capital but representing only 1.5 percent of thecountry’s total FDI capital.
Of this 3.3 billion USD, investmentsinto animal feed occupied for a lion’s share of more than 94 percentwhile over 4 percent of the capital was in breeds and merely 1 percentwas in animal husbandry, according to the Ministry of Agriculture andRural Development (MARD) statistics.
While livestock breeding is less attractive to foreign investors, foreign stock has flowed into the Vietnamese market.
Lastyear, Vietnam imported 167,000 cows and 96,000 tonnes of poultry,irrespective of tens of thousands of cows imported into Vietnam viaborders with Laos and Cambodia and poultry volumes illegally enteredVietnam through borderlines with China, according to figures from MARD’sAnimal Husbandry Department.
At present, cattle imported intoVietnam from Australia, New Zealand and ASEAN members incurs 5 percenttariff while fresh or frozen cattle meat bears 7 percent tariff.
Withthe ratification of the TPP hopefully within this year, the tariff willfall to zero percent, facilitating the presence of more foreign stockand food in the Vietnamese market.
“The livestock breeding sectorwould be at disadvantages following ratification of the TPP. Forexample, after TPP ratification, made-in-Thailand chickens would beshipped to Vietnam and sold at lower prices compared to local ones sincewe have to import most from breeds to food and veterinary drugs for thesector,” said Nguyen Phuong Thanh, Chairman of the Asia-Pacific ImportExport Joint Stock Company.
Deputy head of the Animal HusbandryDepartment Tong Xuan Chinh added that besides TPP, Vietnam is about tosign a string of free trade agreements (FTA) under which manymade-in-Vietnam items will more easily enter relevant foreign markets.
Inreturn, some foreign food will have more chance to ramp up presence inVietnam and in the livestock breeding sector cattle and poultry food offoreign origin will get the first tickets.
“To survivecompetition right in the home ground, the [animal husbandry] sectorneeds to restructure, focusing on some key products only,” said Chinh.
“Therewill be enough time for us to change if we start right from now. Weshall only develop advantageous products like pork and poultry. Besides,a shift from individual fragmented farming into farm-based and enclosedmodel and lower feed cost is a must.”
Economic experts wereconcerned Vietnam’s livestock breeding sector could hardly compete withforeign players in the home ground on the back of tariff removalfollowing TPP ratification.
From other angle, Chairman of theVietnam National Animal Husbandry Association Nguyen Dang Vang saidinternational integration would entail opportunities for the sector tolure more foreign investment.
The four areas the animal husbandrysector urgently sources investment are processing industry, cowraising, breed production and equipment manufacture serving farm-basedbreeding of cattle and poultry, Vang noted.
From the part of firms, they said doing business in this field is too risky though there is still room for development.
Besides, it is not easy to benefit from investment incentives.
Accordingly,in 2010 the Government issued Decree 61/2010/ND-CP providing incentivesto stimulate businesses to invest in agriculture and rural development.
However,until present agricultural sector projects enjoying the incentives haveonly accounted for less than 1 percent of total project numbers.
“Thatwas because the procedures to enjoy these incentives remain complex.Lack of state budget to execute incentive policies is another issue,”Chinh said.
In late 2013, the Government issued Decree210/2013/ND-CP amending Decree 61/2010/ND-CP with more preferences toagricultural sector investors.
The decree was hoped to fuel investment into agriculture, particularly livestock breeding in the upcoming period.-VNA
