The thesis is conducted to analyze and clarify the theoretical and practical bases for developing and completing adequate policies on improvement of Vietnam’s agricultural export product quality in the regional and international integration.
MINISTRY OF PLANNING AND INVESTMENT MINISTRY OF EDUCATION AND TRAINING CENTRAL INSTITUTE FOR ECONOMIC MANAGEMENT PHAM VINH THANG POLICIES ON IMPROVING THE QUALITY OF VIETNAM’S AGRICULTURAL EXPORT PRODUCTS (CASE STUDIES FOR RICE AND COFFEE) Major in: Economic Management Code: 31 01 10 SUMMARY OF DOCTORAL THESIS IN ECONOMICS HANOI – 2019 The thesis has been completed at: Central Institute for Economic Management Supervisor: Assoc Prof Dr Nguyen Van Nam Reviewer 1: Assoc Prof Dr Ha Van Su Reviewer 2: Dr Nguyen Do Anh Tuan Reviewer 3: Assoc Prof Dr Ta Van Loi The thesis is presented in front of the Institute’s Board of Examiners at the Central Institute for Economic Management on The thesis can be found at: - Library of the Central Institute for Economic Management - National Library, Hanoi INTRODUCTION The urgency of the thesis In recent years, Agriculture has been become “the main pillar” for the Vietnamese economic with numberous export agriculture producst with large volumne and turnover Rapid growth in the volumn, however the export products are mainly raw products, medium-class products, low value, and weak competitiveness Although it has been improved, in general, the Vietnamese agriculture products have been facing difficulties in approaching the high demanding market on quality and food safety The forecasts show that in the coming time, technical, environmental, labor barriers will be major difficulties for export agriculture products The positive impact of policies to attract resources to agriculture has not been effective The ability of increasing export volume is also facing challenges when most of them have developed to the threshold of both area and productivity It is difficult for export products to maintain the growth achievement without breakthroughs in science and technology, supply chain and quality improvement Renovation and management improvement, strengthen control of production inputs (agricultural materials, pesticides, fertilizers, animal feed), post-harvest preservation and processing, stop seeking for volume regardless of quality and other factors in competition, producing according to "market signals" are critical demands Many aspects including the renewal, supplementation and improvement of relevant mechanisms and policies should be considered to address the issues Therefore, the research in “Policies on improving the quality of Vietnam’s agricultural export products (case study of rice and coffee)” brings about both theoretical and practical implications in Vietnam Purposes and significance of the thesis The thesis is conducted to analyze and clarify the theoretical and practical bases for developing and completing adequate policies on improvement of Vietnam’s agricultural export product quality in the regional and international integration The scientific and practical implications of the research support the development of methodologies, analysis and evaluation criteria for policies A set of completed and adequate policies on improvement of Vietnam’s agricultural export product quality shall promote the sustainable development of the agriculture Structure of the thesis The thesis is constituted with the introduction, conclusion, references, appendices and four following chapters Chapter 1: Overview of studies on policies to improve the quality of Vietnamee export agricultural products Chapter 2: Theoretical basis for policies to improve the quality of export agricultural products Chapter 3: Current situation of policies to improve the quality of Vietnamese export agricultural products (in case of rice and coffee) Chapter 4: Solutions on policies to improve the quality of Vietnamese agricultural exports in the coming period CHAPTER 1: POLICIES ON OVERVIEW OF IMPROVING RESEARCHES THE QUALITY IN OF VIETNAM’S AGRICULTURAL EXPORT PRODUCTS 1.1 Overview of research 1.1.1 Overview of Vietnamese and international researches - Firstly, researches in policies on the development of agricultural commodities for export: Nguyen Van Bich and Chu Tien Quang (1996) has systematized and summarized the key economic policies on agriculture and rural areas Nguyen Van Minh (2010) clarifies the content of economic policy in general and the policy of agricultural and rural development in particular, the internal relationship of economic policy with Vietnam's economic law Rod Tyers and the WB's Advisory Group; ISGMARD (2002a), OECD's Report on Agricultural and Food Review, FAO and MARD (2000) study focuses on assessing some of Vietnam's policies on agricultural and fishery sectors; Shortterm impact of policy reform - Secondly, researches in Vietnam’s agricultural product export: The research by Nguyen Quang Huynh (2008) is a typical case study in rice exporters The research by Shawn Cunningham and Nguyen Van Phuc (2008) have identified the main restrictions on the development of export products, including rice Luong Xuan Quy and colleagues (2006) have stated that policies still have many inadequacies Nicholas Minot (2008) stated: Vietnam's rice production growth is mainly due to increased productivity and land turnover coefficient Dinh Van Thanh (2011); Vo Thi Thanh Loc, Le Nguyen Doan Khoi (2011); Agrifood Consulting International - ACI, (2002) examined the impact of developed countries' agricultural product standards on their ability to participate in global agricultural value - Finally, researches related to policies on improving the quality of Vietnam’s agricultural export products (case study of rice and coffee): Le Xuan Tao (2014); Tran The Tuan and Tran Mai Trang (2015) have evaluated the actual situation and made recommendations to boost rice exports of the Mekong Delta Chantal Pohl Nielsen (2003); Le Khuong Ninh, Niels Hermes and Ger Lanjouw (2002); Chantal Pohl Nielsen, Kobenhavn, (2002); Jonathan Haughton & et al (12/2004); Nicholas Minot & Francesco Goletti (2000) has given a summary of Vietnam’s rice production, especially roles of Vietnam’s rice in the international markets and specify some strongly influential trade policies on rices after the economic reform in Vietnam Hoang Thi Van Anh (2009) has discussed the fundamental issues of the global value chain and recommends some solutions to Vietnamese coffee Luong Xuan Quy (2006) has proposed and recommended policies to increase the value added to agricultural exports Le Huy Khoi (2013) has developed the theoretical framework and value chain model of Vietnamese coffee Nguyen Ngoc Tuan (2013) has proposed adjustments in lending methods and policies Rice.P & McLean (1999); Giovannucci, Daniele & F.J Koekoek (2003) have mentioned policies on production, processing, export and given out some recommendations Nguyen Ngoc Tuan (2013) has emphasized on bank credit solutions for households producing the coffee ISGMARD (2002); N.E.Maurice and J.Davis (2011) have deeply studied in competitive opportunities of agricultural export products in the integration The common points in the above projects are the research focuses on production, export and enhance the competitiveness of the export agriculture produtcs On the analytical basis, and the situation assessment, the authors proposed the guidance and orientation on the solutions (quality improvement, competitiveness, production improvement, export Vietnamese agriculture export) As the subject of the study are not focusing on the policies improving the quality of the export agriculture products, in some extent, those studies needs to be further discussed For example, the theoretical basis of the policies and its impacts on improving the production and exporting of the agriculture products, the advantages and disadvantages of the current policie to ensure the quality of the agriculture products in a sustainable development in the context of free trade Many new solutions are general, wwhich arre applied to all general export items In other words, the works have not been comprehensively studied in terms of both theory and practice to the policies of improving the quality of the export agriculture products 1.1.2 Thesis’s issues not solved in published researches - The theoretical bases for policies on improving the quality of agricultural export products has not been detailed and completed to clarify objectives of the policies - It lacks the clear categorization of direct and indirect policies on improving the quality of agricultural export products in recent years; - There are few complete, comprehensive and in-depth analyses and assessments of factors influencing on the quality of agricultural export products - There are few recommendations and new measures for specific commodities in the certain area 1.1.3 Focuses of the thesis - Analysis and clarification of theoretical bases for policies on improving the quality of agricultural export products; - Assessment of adopted policies on the quality of agricultural export products, especially ones on influential factors on agricultural production, production process (farming methods); Postharvest food processing and preservation - Based on theoretical and practical bases and in the domestic and international economic development and market trends of the agricultural products, the thesis has recommended some perspectives, plans and solutions develop completed and adequate policies to improve the quality of agricultural export products 1.2 Solutions to issues of the thesis 1.2.1 Objectives of the research * General objectives The thesis aims at propsing orientations and solutions to improve the policies which enhance the quality of exported agricultural products This contributes to the goods export of Vietnam in the global integration context according to theoretical and practical bases of policies on improving quality of exported agricultural products of Vietnam since 2010 * Specific objectives (i) To systematize and analyze the rationale of policies on improving the quality of agricultural export products; (ii) To assess effects of policies promulgated and implemented in the period of 2010-2017 on improving the quality of agricultural export products; (iii) To propose orientation and solutions on improving policies enhancing the quality of agricultural export products This aims at developing the export agricultural products in the context of integration 1.2.2 Reaseach questions The thesis focuses on answering the following questions: (i) What are factors influencing on policies on improving the quality of agricultural export products based on the theoretical bases for the quality and policies? (ii) How have the policies affected on improving the quality of agricultural export products in Vietnam in general and rice and coffee in particular? (iii) What solutions should be carried out to develop completed and adequate policies to improve the quality of Vietnam’s agricultural export products (including rice and coffee) in the coming time 1.2.3 Subject and scope of the research *Subject of the research: The subject of the research is policies on improving the quality of Vietnam’s agricultural export products, especially rice and coffee *Scope of the research: - In term of contents: The thesis establishes a theoretical framework for evaluating the effects of policies on improving the quality of export rice and coffee, applies this theoretical framework on evaluating policies on improving the quality of Vietnam’s agricultural export products, especially rice and coffee in the period of 2010-2017, and propose solutions for the following years - In term of duration: The data will be studied in the period of 2010-2017 and data and orientation forecasted up to 2020 and 2030 - In term of space: The thesis investigates the effects of policies on improving the quality of Vietnam’s rice and coffee for exports 1.2.4 Approach and methodology Approach: - System approach enables to fully and comprehensively research and solve issues from both theoretical and practical 15 Various guidelines and policies has been promulgated and implemented such as: Policies to support, encourage and improve quality of agricultural production; Policies to reduce post-harvest losses; Policies to develop agricultural process; Policies on consumption of agricultural products; Policies on market and trade promotion; Policies on agricultural resources; Specified policies on rice and coffee Those guidelines and policies have brought about significant achievements in agricultural production in general and agricultural export production in particular However, the number of agricultural enterprises has been low because of a few of production supporting policies with direct impacts on encouraging the intensive processing Detailed regulations has not been stipulated, so has not been implemented in practice Land policies not guarantee farmers’ full autonomy The assigned land area is inadequate for mass export production in some regions There are some limitations in scientific and technological policies for agricultural promotion Despite positive changes, Vietnam’s agricultural export is unstable and unsustainable Vietnam’s market lacks initiative and depends on some certain markets The provision of the market information is improved, but not adequate and timely The branding Vietnam’s agricultural products are inadequate 3.3 Assessing policies on the quality of agricultural export products In consideration of assessment from two groups including experts, managers and administrators of enterprises which export agricultural products, there are many improvements in 16 the management of agricultural export products upon promulgated and implemented policies Large-scale and highly specialized farms are established to produce abundant and highquality agricultural export products which are conformed to VietGAP, GlobalGAP, etc The agricultural promotion services are qualified to national standards However, there are inadequacies Policies on human resource development have not been specified There are many standards and requirements Therefore, the traceability of agricultural products is difficult because of too many regulations The inspection and verification of the quality has not fulfilled with requirements of the market The accessibility to credits is limited to production households, cooperatives and enterprises It exists inadequacies in authorities for food safety, policies and measures to encourage enterprises’ investments in intensive processing The seed production does not meet the demand 3.4 General assessment of policies on improving the quality of agricultural export products In the last years, Government, Ministries, Agencies, Associations together with enterprises have developed legislative framework to improve management and quality of agricultural products, especially ones for export such as: law and under-law documents, enforcements; national standards and regulations; policies to improve quality of agricultural export products from production, harvest to process, preservation, etc The policy system has been gradually supplemented and completed The quality of Vietnam’s agricultural export products has been 17 constantly improved thanks to the positive effects of policies implemented in practice However, the agriculture has been mainly focused on the extensive culture, yielding and productivity The number of leading enterprises is quite small The proportion of high-value-added products is low The investment capital and awareness of manufacturers are one of the most considerable challenges to solutions of these limitations CHAPTER 4: SOLUTIONS TO COMPLETING POLICIES ON IMPROVING THE QUALITY OF VIETNAM’S AGRICULTURAL EXPORT PRODUCTS 4.1.International and domestic contexts and issues of Vietnam 1 International context It is estimated by WTO that, for the period 2016- 2025, the world average growth is rather low, below 4.5% (lower than that of the period 2010- 2015 at the rate of 4.9%) The number of countries exporting agriculture products are decreased, incontract with the increased number of importing agriculture products ones The demand for rice is growing slowly in compraision with other coarse grains, but rather lower than that of the previos decades The coffee consumption rate is increasing in the developing countries which are the major coffee producing countries The Vietnamese enterprises are facing difficulties to meet the national standards on the production, processing to ensure 18 the environment quality, packaging, quarantine standards, and using the energy suppies harmless to the environment 4.1.2 Issues of Vietnam’s agricultural export products Agricultural export has relatively good improvement, but it has been not The shift of export structure are relatively good, but it has remained unstable and passive in dealing with technical barriers to trade (food safety, environmental sanitation, antibiotic residues, …) Changes from quantity to quality, from fragmentation to centralization, from crude to processed status, … have developed slowly Vietnam’s export has mainly focused on certain markets, and limited to enter into new markets Therefore, agricultural exports are unlikely to sustainably develop and maintain at high growth Table 4.1: Forcast of world trade prospects for the period 2016- 2025 Unit : % Year Real economic growth (i) Wo OE Chi EU Eur rld CD na -28 ozo US Word Japa Ger Fran n ma ce ne trade (ii) ny 2013 3.0 1.3 7.6 0.1 -0.4 1.9 1.5 0.5 0.4 2.8 2014 3.5 1.9 7.4 1.5 1.0 1.9 1.4 2.0 0.5 2.8 2015 3.7 2.4 7.2 2.0 1.8 3.0 0.6 1.9 1.9 2.8 2010 3.7 2.0 8.3 1.1 0.9 2.3 1.5 2.1 1.2 4.9 2015 19 2016 3.5 2.7 6.6 2.4 2.3 2.7 0.8 2.0 2.2 2025 Note : (i) GDP growth is calculated by the purchasing power parity in 2005 (ii) Goods and service Source : Iternational Monetary Fund (IMF) and World Trade Organization (WTO) 4.2 Viewpoints and plans of developing completed and adequate policies on improving the quality of agricultural export products 4.2.1 Viewpoints of developing completed and adequate policies Policies on improving the quality of agricultural export products must be consistent with international commitments, promote the agricultural production in a large-scale and gradually advanced manner The policies aim at (i) Improving competitiveness of Vietnam’s agricultural products; (ii) Creating and developing famous agricultural product brands on international markets; and (iii) Strengthening the participation of Vietnam’s agricultural products in the global value chain 4.2.2 Plans of developing completed and adequate policies Reviewing existing policies, evaluate the achievements, shortcomings and inadequacies in implementing policies in 4.5 20 practice Learning from other countries and completing policies by supplementing, amending and recommending better policies 4.3 Solutions to developing completed and adequate policies on improving the quality of Vietnam’s agricultural export products 4.3.1 General policies 4.3.1.1 Creating mechanisms and policies to complete Vietnam’s standard system in accordance with the importing country’s standard system Authorities should support and encourage enterprises to create and apply advanced quality management system 4.3.1.2 Implementing policies and solutions to create and develop material zones for high-quality agricultural products which are in conformity with regional conditions and fields 4.3.1.3 Completing financial mechanisms and policies for producing, processing, trading high-quality agricultural products Providing high financial incentives for agricultural investment projects 4.3.1.4 Developing information and forecast system for highquality agricultural products and clean agriculture Improving the market forecast system and technology Strengthening the communication among management agencies and associations and organizations to set up information channels for farmers and enterprises 4.3.1.5 Promulgating policies to strengthen connection and cooperation between high-quality agricultural products’ production and consumption Creating regulations based on adjusting principles of market The key rule is to share risks, 21 balance benefits, clarify responsibilities, strengthen brand and build mutual trust 4.3.1.6 Warning Technical Barriers to Trade (TBT) for agricultural export products Authorities should conduct research and develop TBT system for agricultural export products and build information system to support enterprises to actively prevent 4.3.1.7 Promulgating policies to develop market and trading for high-quality agricultural products Developing action programs for businesses and agencies to manage and identify target markets Research, organize and operating Agricultural Product Exchange in intensive and large-scale production areas for international demands Promulgating mechanisms and policies to connect wholesale markets 4.3.1.8 Trade promotion and national brand towards the markets with FTA partners and sectors with advantages and export growth capacity Focusing on some potential items to design and implement special trade promotion programs for these items in markets 4.3.1.9 Completing mechanisms and policies to cooperation in research and application of Science and Technology in agriculture Conducting research, selecting and completing National High-standard Seedlings to conform with Vietnam’s climate and soil conditions 4.3.1.10 Improving government management in monitoring, implementing and controlling policies Focusing on application of Science and Technology to improve crop and livestock productivity and post-harvest losses Ensuring food hygiene and 22 safety Strengthening planning management to actively control agricultural supply 4.3.2 Policies on rice for export 4.3.2.1 Reviewing regulations on rice production Improving judicial institutions to enforce contracts and agreements Developing the national standards for export rice based on specific conditions of Vietnam 4.3.2.2 Recommending non-collateralized preferential loans in case of engaging in export rice production in regions planned for rice production Establishment and development of rice banks in rice cultivation areas Lending farmers with low interest rates and supporting preferential loans to renew advanced technologies for export rice processing enterprises 4.3.2.3 Reorganizing rice production in the sector’s value chain Permitting foreign companies to invest directly in rice export and raw material areas 4.3.2.4 Planning high quality rice production areas for export to specific markets 4.3.2.5 Prioritizing organic and clean agriculture Developing the criteria for “Rice specialties” Assisting enterprises to obtain environmental certificates for agricultural export products 4.3.2.6 Encouraging investments in intensive-processing factories in association with the development of high-quality rice fields 4.3.2.7 Encouraging the export of high-quality and branded rice associated with geographical indications 4.3.3 Policies on coffee for export 4.3.3.1 Strengthening international cooperation and 23 relationship with large coffee exporters in the world to improve Vietnam’s shortcomings Developing logistics and insurance capacity for export coffee in specialized manner Encouraging enterprises to establish Trade promotion funds and industry insurance funds 4.3.3.2 Carrying out the technology transfer of re-farming Making agricultural promotion policies Enhancing the training, information dissemination and experience exchange 4.3.3.3 Restructuring the stockholders in the coffee value chain to formulating a number of coffee businesses with high financial capacity and large scale for researches in branded coffee seeds and specialties 4.3.3.4 Making policies and management of “Risk Funds for Coffee”, calling for “Scientific research and advanced technology transfer funds” for the coffee tree Considering the export tax on crude coffee 4.3.3.5 Adopting policies and mechanisms to increase human resources for the management of seeds 4.3.3.6 Developing the Coffee Quality Program (CQP) and regulating on quality sealing before exports Vietnam Ministry of Agriculture and Rural Development promulgates technical regulations on processing Researching the International Standards ISO 10470:2004 to complete Vietnam Standards TCVN 4.3.3.7 Making policies on developing high quality export coffee zones; Researching, planning and constructing concentrated industrial parks in the Central Highland 24 4.3.4 Some recommendations for enhancing the efficiency of policies on improving the quality of Vietnam’s agricultural export products 4.3.4.1 To the Government Studying and revising the Land Code; Encouraging the processing industry, promoting and calling for investments in intensive processing projects, promulgating appropriate institutions to connect Vietnamese farmers with the global market Making plans to ensure the close coordination among ministries, committees and branches in agricultural trade policies 4.3.4.2 To Ministry of Agriculture and Rural Development Establishing regulations and policies to improve plants and animals and develop value chains; Supporting enterprises to build and advertise trademarks, intellectual property protection of agricultural products and geographical indications Researching specific strategies and policies to adapt the market Strengthening the capacity of industry associations 4.3.4.3 To Ministry of Industry and Trade Promote forecasting and market information provision; Promoting roles of business agencies; Reviewing signed trade agreements on agricultural products Supporting branding and promotion 4.3.4.4 To Ministry of Finance and the State‘s Bank of Vietnam Coordinate with ministries and branches to support incentives and policies on credit, currency and exchange rate; encouraging collectives and enterprises to provide supporting 25 services and investing in production and processing, preservation and consumption of agricultural export products 4.3.4.5 To Associations Engaging and promoting cooperation with economic organizations, international trade associations; Implementing agricultural promotion programs and assisting businesses in dealing with lawsuits CONCLUSION The higher requirements have revealed shortcomings of Vietnam’s policies on production and processing of agricultural export products The thesis has focused on recommendations to develop completed and adequate policies in the coming time Findings of the thesis: In the inheritance of international and Vietnam’s previous researches and tests, and comments and evaluations by experts, managers and enterprises in connection with the research subject, the thesis has focused on the following issues i) Theoretical bases for the quality, policies on improving the quality of agricultural export products; and influential factors; ii) Assessment of the quality of agricultural export products in recent years; Ability to fulfil standards and regulations of importing countries; iii) Analysis and assessment of effects/impacts of policies on the quality of agricultural export products; iv) Considering the development of trade trends and international and regional agricultural markets, the thesis 26 makes some recommendations on perspectives, measures and plans to develop completed and adequate policies on improving the quality of Vietnam’s agricultural export products in the coming time It includes General policies (with 10 reccommendations); Policies on rice for export (7 ones); and Policies on coffee for export (7 ones) There are various aspects related to policies on improving the quality of agricultural export products and it is necessary to deeply research and detail policies on each particular commodity and market The policies should be drawn up, assessed, initiated and adjusted to catch up with the constant development of the low-carbon economy, application of technological advancements, high-technology, blockchain and the Industrial Revolution 4.0 27 LIST OF THE AUTHOR’S PUBLISHED WORKS RELEVANT TO THE THESIS Thang, P V (April 2015), “Increase in the exchange rate of the U.S dollar and impacts on Vietnam’s exports” p 19-22, Accounting and Finance Journal – ISN 1895 – 4093; Tăng tỷ giá hối đối đồng la Mỹ tác động đến hàng xuất Việt Nam 19-22, Tạp chí Tài Kế tốn - ISN 1895 - 4093 Thang, P V (April 2016), “Vietnam’s international economic integration after years of renovation”, p 38-41, Accounting and Finance Journal – ISN 1859 – 4093; Thang, P V (July 2016), “Promoting agricultural exports in recent years”, p 38-41, Economics and Forecasting Journal – ISN 0866 7120; Thang, P V (August 2016), “Vietnam’s policies on rice exports” p 3-6, Economics and Forecasting Journal – ISSN 0866 7120; Thang, P V (No 515 in April 2018), “Improving the competitiveness of agricultural export products: Theoretical, practical bases and solutions”, Journal of the Asia Pacific Economy Thang, P V (No 518 in June 2018), “Vietnam’s agricultural products and international trade barriers”, Journal of the Asia Pacific Economy 28 LIST OF THE AUTHOR’S PUBLISHED WORKS RELEVANT TO THE THESIS Thang, P V (April 2015), “Increase in the exchange rate of the U.S dollar and impacts on Vietnam’s exports” p 19-22, Accounting and Finance Journal – ISN 1895 – 4093; Thang, P V (April 2016), “Vietnam’s international economic integration after years of renovation”, p 38-41, Accounting and Finance Journal – ISN 1859 – 4093; Thang, P V (July 2016), “Promoting agricultural exports in recent years”, p 38-41, Economics and Forecasting Journal – ISN 0866 7120; 10 Thang, P V (August 2016), “Vietnam’s policies on rice exports” p 3-6, Economics and Forecasting Journal – ISSN 0866 7120; 11 Thang, P V (No 515 in April 2018), “Improving the competitiveness of agricultural export products: Theoretical, practical bases and solutions”, Journal of the Asia Pacific Economy 12 Thang, P V (No 33 in June 2018), “Vietnam’s agricultural products and international trade barriers”, Trade research review; MSc Pham Vinh Thang, Agricultural trade between Viet Nam and International China practices,isusues workshop th Noi,December,7 ,2018 on Asean- and solutions, China; Ha 29 ... evaluating the effects of policies on improving the quality of export rice and coffee, applies this theoretical framework on evaluating policies on improving the quality of Vietnam’s agricultural export. .. policies on improving the quality of agricultural export products based on the theoretical bases for the quality and policies? (ii) How have the policies affected on improving the quality of agricultural. .. and data and orientation forecasted up to 2020 and 2030 - In term of space: The thesis investigates the effects of policies on improving the quality of Vietnam’s rice and coffee for exports 1.2.4