Local meat producers are facing fierce competition from imports. Director of the Ministry of Agriculture and Rural Development's Livestock Breeding Department Nguyen Dang Vang spoke with Ha Noi Moi (New Ha Noi) newspaper about this issue.
Imported meat products will become more popular in the domestic market when Viet Nam enters the WTO. Won't this result in unequal competition for domestic producers or is it normal during this period of globalisation?
I don't think there's any need for pessimism regarding this phenomenon.
For example, pork will be largely free of competition as one kilogram of pork on the hook in South Korea and Japan costs VND50,000 while in Viet Nam it is only VND19,000.
Mass-produced chicken on the other hand will face fierce competition. Currently, chicken bred in large scale accounts for 16 per cent, equal to 100,000 tonnes, of the total poultry products consumed annually. Of this, foreign enterprises operating locally accounts for 75 per cent of the production. The price difference between domestic chicken, imported chicken and those produced locally by foreign companies is insignificant.
Meanwhile, the beef market has opened up to foreign imports because the country lags in domestic production. Even if we decide to produce enough beef, we may still face issues of hygiene and food safety.
Imported products ensure quality, while domestic breeders lack quality management.
So it is easy to see what the customers, especially those in the high-income bracket, will choose. However, I think imported products are yet to overwhelm the domestic market, and, currently, are available mainly in urban areas.
Can you brief us about the development plans and the labour situation in the livestock breeding sector?
The sector is developing rapidly. In 2005, the sector produced 2.8 million tonnes of meat. However, breeding was done only in small scale.
Currently, there are about 5,000 farms, 2,600 of which breeds poultry. Farms generally undertake either intensive, semi-intensive or extensive breeding methods. Semi-intensive farming is the most popular, accounting for about 50 per cent of the sector.
Although intensive farming has resulted in high profits for some breeders, it has failed to expand due to the lack of capital and technology.
As for labourers, there is no official statistics on the number of labourers working in the sector. It is estimated that there are about eight million households earning a living by breeding livestock. This does not take into account the number of seasonal breeders and nearly 40 million people living in rural areas who raise chicken or pigs to improve their living standards.
Food safety, hygiene and non-competitive prices are some of the negative points of the sector. Where are its strong points?
Livestock breeding is largely unplanned. Lack of a clear strategy makes it difficult for the sustainable and safe development of the sector. There are some localities having development plans for livestock breeding, including HCM City, Binh Dinh and Ha Noi. Low wages of labourers and low prices of domestic products, unhindered by value-added tax and transportation costs, are the strong points of the sector.
How will the sector cope with foreign competition once Viet Nam enters the WTO?
Currently, foreign companies are controlling the large-scale poultry breeding sector.
As I said above, the country raises about 60 million chicken in large-scale production, 75 per cent of which are produced by foreign companies.
While foreign companies have farms to breed poultry in the country, they still lack slaughtering and processing areas. There are certain types of chicken and water fowl in which we hold an advantage over foreign companies, like the coloured feather chicken, traditional chicken and water birds, as they cannot be bred in the industrial mode.
Investments in large-scale production still faces issues like environment and customer taste. Not all consumers prefer mass-produced chicken.
What are the opportunities and problems for domestic breeders?
The total production value of the livestock breeding sector comes to about VND55,000 billion.
I think the country's accession to the WTO will not affect the breeding sector. In fact, for labourers, it will neither be good nor bad. The rising price of animal and poultry feed and high transportation costs will increase food prices. This will also increase the profits of breeders.