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Reliance on imports cut into farm produce export revenue
Agricultural production can bring billions of dollars a year from exports. However, agriculture experts have pointed out that the real sums of money that farmers and exporters pocket are actually not big, because farmers must spend a lot of money to import materials.
Dam Van Hoat, Director of Trai Viet Company, which specialises in providing materials to make livestock feed, admitted that the production cost of fish farming depends on imports.
In the last three years, tra fish exports can bring export revenues of $1.3-1.5 billion a year. If deducting the sums spent on material imports, the total profit is just $200-400 million.
At tra fish farms, the feed that used is bran balls, made of 100 percent imported materials. As such, domestic feed prices depend on import material prices.
According to Hoat, feed prices have increased by 20 percent over the beginning of 2010. The increases are blamed on those in the world market and also dong/dollar exchange rate adjustments.
A kilogram of bran balls is now 8200-8300 dong per kilo, an increase of 1000 dong per kilo over three months ago. According to farmers, 1.7-1.8 kilograms of feed are needed to obtain one kilogram of tra fish, which costs 14,000 dong ($0.7). As such, to breed 1.5 million tons of fish every year, the sum spent on import materials would be $1.05 billion. Besides, Vietnam also must import 100 percent of medicine for farming, which costs as estimated 700 dong per kilogram, or 1005 billion dong ($54 million) for 1.5 million tons of fish.
Dang Kim Son, Director of the Agricultural Policies Institute under the Ministry of Agriculture and Rural Development, calculated that the added value gained from exporting farm produce like rice, cashew nuts, tra fish and shrimp has decreased over the last few years because of the high dependence on import materials.
According to the General Department of Customs, in the first eight months, total import revenue of animal feed and related materials had reached $1475 billion, an increase of 15.6 percent over the same period of 2009.
Livestock husbandry in the last three years, according to the Ministry of Agirculture and Rural Development, needs $1.8-2 billion worth of feed, and 1.5-1.7 billion worth of medicine.
Currently, only seafood can bring export revenue of $4-4.5 billion a year, while Vietnam cannot export poultry and pig meat, though it must spend billions of dollars to import materials. Poultry and pigs are only consumed domestically.
Rice production costs also depend on imports. According to the General Department of Customs, in the first eight months, Vietnam spent $339.8 million on pesticides and materials, up 12.9 percent over the same period of 2009.
In 2007, the import revenue of pesticide was $250 million and then the figure rose by two-fold in 2009 to nearly $500 million. A pesticide production company director admitted that Vietnam must rely on China for pesticides, both finished products and materials. Besides pesticides, Vietnam also imports $1.2-1.5 billion worth of fertiliser for rice production.
According to the Ministry of Agriculture and Rural Development, 80 percent of imported pesticides and fertilisers are used for rice production. Vietnam can get $2.2-2.5 billion every year from rice exports, but spends $1.6-1.8 billion on fertilisers and pesticides, which means that the net sum is not sizeable.
vietnamnet, SGTT
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