Murky areas remain

Chinese fruits for sale at a market in HCM city: Agro-products entering Vietnam via the route of border trade are subject to neither customs procedure nor food hygiene and safety testing. Circular 13 therefore has no effect on these imports.

Circular 13/2011/TT-BNNPTNT (Circular 13 for short) on the inspection of plant-based imports has been in force for over a month and is exerting tremendous pressure on importers. Meanwhile, efforts to combat substandard imports from certain countries remain largely futile.

Circular 13 requires plant-based imports to come with certificates of food hygiene and safety upon entry into Vietnam. This means the products must undergo several phases, including sampling and testing, while custom procedure is being carried out. The circular further stipulates that agricultural imports flowing into Vietnam must be packaged and labeled properly, with such information as producers’ addresses and product codes, if any, written in or translated into Vietnamese. It is thus puzzling that agro-products from China, Laos and Cambodia continue to flood Vietnam’s market without having to go through any inspection.

Prevailing regulations allow traders doing business along the border between Vietnam and China, Laos and Cambodia respectively to engage in transactions worth up to VND2 million per day. Phung Huu Hao, deputy head of the National Agro Forestry Fisheries Quality Assurance Department (Nafiqad), says that commodities entering Vietnam via the route of border trade are subject to neither customs procedure nor food hygiene and safety testing. Circular 13 therefore has no effect on these imports. Moreover, the volume of goods, including agro-products and food, that pour from neighboring countries to Vietnam through unofficial trade channels is significant, but the commodities are of questionable quality due to the lack of stringent inspection.

Nguyen Hung Cuong, deputy head of industry and trade in Tinh Bien District, An Giang Province, admits that mangoes, mangosteens, dried tamarinds and rambutans from Thailand and Cambodia arrive at Tinh Bien market through border trade channels. Unfettered by tariffs, these products are incredibly cheap. The value of these agro-products, while not yet calculated, is likely to be substantial. After all, An Giang alone has three border gates (Tinh Bien, Khanh Binh and Vinh Xuong), the first two of which are on the transnational level. Hao believes Nafiqad needs to rely on the help of soldiers to tackle this loophole in Circular 13.

A challenge for enterprises

Circular 13, in force since July 1, has irked enterprises such as members of the Vietnam Cashew Association (Vinacas). Six days after the implementation of this circular started, Vinacas proposed the Ministry of Agriculture and Rural Development remove unprocessed cashew from the list of commodities subject to food hygiene and safety testing and deal with over 400 containers of this commodity (10,000 tons) still stuck at various ports as a result of this new document.

Dang Hoang Giang, general secretary of Vinacas, justifies this suggestion by saying that unprocessed cashew nuts are not foodstuffs as their outer layer is not yet removed. Besides, there has been no official guideline on how enterprises can adjust their operation in accordance with Circular 13. This document, signed on March 16, 2011 and in effect since July 1, has adversely affected enterprises as contracts to purchase raw cashew from African countries, as well as Indonesia and Cambodia, were mostly clinched at the beginning of the year.

In response, Nafiqad says that plants used to prepare food fall into the category of foodstuffs. Unprocessed cashew nuts imported into Vietnam are no exception. According to Nguyen Nhu Tiep, head of Nafiqad, the department strictly complied with World Trade Organization (WTO) regulations and informed stakeholders in March, or 60 days in advance, of this circular to give importers and exporters ample time to adjust business plans. “I am not sure why many enterprises are surprised at Circular 13,” he says.

Bui Si Danh, deputy head of the Plant Protection Department, under the Ministry of Agriculture and Rural Development, shares this view, contending that all plants have been required to undergo quality inspection since July 1. In fact, as foodstuffs, raw cashew nuts must be subject to food hygiene and safety testing as well.

Vinacas continued to send the same suggestion to the Minister of Agriculture and Rural Development on July 20. This time, the reason cited was that, according to the Plant Protection Department, no imported container of raw cashew had violated food hygiene and safety standards. Moreover, Vinacas quoted Vinacontrol and Cafecontrol, Vietnam’s agro-product testing agencies, as saying that raw cashew would pose no safety risks. Another argument was that such imports would undergo various stages of processing and be re-exported and not used for domestic consumption. All in all, Vinacas proposed that the Ministry of Agriculture and Rural Development consult this association when fleshing out policies relating to cashew nuts. This approach will probably help to reduce the detrimental impacts exerted upon cashew nut processors.

In the end, the Ministry of Agriculture and Rural Development has given in. As a result, the aforementioned containers of cashew nuts no longer have to undergo any testing. As pressure from Vinacas remains, the ministry has eventually decided to do away with food hygiene and safety testing for raw cashew nuts, regardless of when the contracts were signed.

Bui Ba Bong, deputy minister of agriculture and rural development, ascribes Circular 13 to the need to prevent sub-standard products from entering Vietnam. However, given its deleterious side effects, there should be several adjustments. “Circular 13 can be tweaked to enable cashew nut exporters to capitalize on rising global prices,” says Bong.

However, cashew nut exporters are not the only producers to feel the pinch from Circular 13. So far, only seven countries — the U.S., Canada, China, Australia, Thailand, France and New Zealand — have officially promised to comply with Circular 13. This number pales in comparison with that of countries from which Vietnam imports products.

Nguyen Dang Hien, general director of Bidrico, says that while his firm does not need to worry about imported materials for producing his soft drinks this year, similar contracts for 2012 and beyond can spell trouble. “Food and beverage firms will convene a meeting to discuss Circular 13 and provide feedback to competent agencies, so that troublesome legal hurdles can be cleared,” he says.

Source: SGT

Tags: Vietnam agriculture