According to a new report – Vietnam Agribusiness Report Q4 2009 – from companiesandmarkets, the problem facing the government is balancing the desire to guarantee food at an affordable price for consumers with providing enough of a profit incentive for farmers to invest in increasing production. The government has been facing similar problems in other sectors of agriculture, coming under pressure from livestock producers to further raise tariffs on imported meat. While obviously good for domestic farmers, such a move will be less welcome for consumers as prices in the shops rise.

Livestock producers have undoubtedly been suffering over the past year as feed prices have squeezed profits. Despite this, there has been some promising news from the sector. At the end of June 2009, a new chicken farm complex opened in the province of Binh Phuoc near Ho Chi Minh City. There have been a number of modern poultry farms springing up to supply the southern commercial capital and the area has attracted investment from major international players such as Thai conglomerate, CP Foods.

As with most Vietnamese agricultural sectors, improving efficiency in livestock production will be essential for the long-term health of the sector. As Vietnam´s World Trade Organization commitments on tariff reduction begin to take effect, it will be harder to protect domestic producers from cheaper imports .

This should help spur investment in modernising agriculture in the country.

Further Reading

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