Vietnam spends billions dollar to import farm produce

The information that Vietnam, an agriculture country, imports billions dollar worth of farm produce, surprises many people.

Statistics showed that the imports of of food and farm produce increased significantly in April. Prior to that, a detailed report by the Ministry of Industry and Trade (MOIT) said that in the first two months of 2010, the import revenue of food and farm produce reached $280 million, an increase of 56 percent over the same period of the last year. Rice imports increased by 152 percent, vegetable 127 percent, refined vegetable oil and fat 96 percent, finished products from cereals, starch and milk (confectionary and canned dairy products) 99 percent, while fish and animal meet 79 percent, and other products 84 percent.

In 2009, the total import revenue of the categories of products was $1.5 billion.

According to MOIT, many import items are not essential goods which Vietnam does not encourage importation. These include meat and products from meat, drinks, vegetable, fruits, confectionary and other eatable products.

Explaining the sharp increase in food and farm produce imports, MOIT said that it is because of the higher living standards of people. “In some big cities like Hanoi and HCM City, the demand for high grade foods imported from developed countries such as the US and Australia is increasingly high, which has led to the imports increase,” the ministry said. Similarly, Vietnam imports meat and finished products made of meat not only to process food, but also for family consumption.

A lot of products now enjoy the low import tariff of 0-5 percent under the framework of the ASEAN-China Free Trade Agreement and CEPT commitments among ASEAN countries, which has made the import products cheaper, thus more favourable by consumers.

In order to restrict the imports of not essential goods, MOIT has proposed to strengthen the control over the quality of import food and farm produce.

Experts have stressed the need to apply technical barriers to restrict imports. In 2009, as Vietnam cut taxes sharply to the rates lower than committed under bilateral and multilateral agreements, import food, especially meat, flowed into Vietnam. This put hard pressure on the domestic husbandry industry, pushing a lot of livestock farms to bankruptcy and caused consumers to use low quality frozen imports.

However, the overlapping in management of Government agencies could lead to the overly high imports. In some cases, a ministry does not allow to import some kinds of products, but another ministry does.

Nevertheless, experts stressed that Vietnam needs a long term strategy to restrict imports of non-essential goods, rather than technical barriers or the measures proposed by MOIT. They said that Vietnam’s farm produce has to be safe and good enough to ‘win the heart’ of consumers. Vietnam does not have powerful food processing industry, therefore, it has to export vegetable and fruits as raw materials. A lot of enterprises purchase raw materials from Vietnam, and then process products in their countries to export back to Vietnam at high prices.

Saigon tiep thi

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