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Experts say its time to build name recognition for Vietnam’s farm products
Prices plummet when farmers have bumper crops, and soar when crops are poor. Is that inevitable? Agriculture experts say that managing stocks and building brand name recognition for farm produce can dampen the impact of price volatility on Vietnam’s farmers.
Now or never
Brand names have big significance not only for promoting exports but also for the domestic market, says Pham Trong Bao Chau, an executive of Vinamit, the fruit processor and exporter. He related that Beaujolais Nouveau wine is made of superfine grapes. It only appears on the market in early November and is available only for a few months. Therefore, French people all rush to drink this wine in November.
Meanwhile, in Vietnam, no farm produce has such a good brand name that people rush to buy it at a certain time like Beaujolais Nouveau. Chau proposes that the farm sector use a part of its profits to advertise products.
Pham Chi Lan, a senior economist who once was part the Prime Minister’s research team, agrees that it is urgently necessary to build up brand names for Vietnam’s farm produce. It’s something that should be done right now, she says, or it will never be done.
Lan notes that agriculture has always been a driver for Vietnam’s economy and the important role of agriculture and farm produce can be more clearly seen in the economic crisis.
In Lan’s view, Vietnam’s farm sector should seek profit from products with added value. Lan said that the actual value of watermelons exported by Mexico to the US just accounts for 0.05 percent of their sales price. More than 99 percent of the profit is created by processing and good brand names.
Bac Giang province is launching a project to popularize Luc Ngan litchis, a local speciality, when the 2010 crop comes to market. The project is supported by the Institute for Development Studies and the Business Research and Support Centre.
Stabilising the market by stimulating demand and controlling supply
Building brand names for Vietnam’s farm produce is a long term job. In the near future, economists say, stimulating the demand and controlling supply is a thing that needs to be done immediately to stabilize farm produce prices.
Chau said that coffee prices have fallen sharply as enterprises rushed to clear stocks, rather than release them slowly to the market. The same situation occurs with most agricultural produce.
Chau said that prices will certainly fall if producers try to market big volumes of products all at once. Instead of selling products in massive scale, producers should keep products in stock to maintain the supply-demand balance and control the sales price. Conversely, if the purchasing power decreases, it is necessary to have marketing measures to stimulate the demand.
In Vietnam, fruits are always in oversupply at peak crop time. Every litchi crop lasts eight weeks with an average output of 200,000 tonnes. Farmers should not expect people to consume all the output of fresh litchis. Instead, they should think of making other products from litchis, including candied litchi fruit, litchi jam or litchi ice cream.
Nguyen Duy Thuan, an expert from the Business Research and Support Centre, has suggested that setting up farm produce trading floors under the management of local authorities or associations also proves to be the good idea to control the sale prices.
VietNamNet, NLD
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