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Next-Gen AgriTech: Vietnam's Pathway to an Eco-Friendly Future
- Van Pham LLC
- May 30, 2024
- 5 min read
Vietnam's agricultural sector stands at a pivotal juncture, poised to embrace a transformative shift towards sustainable, high-tech, and circular practices. With its rich agricultural heritage and ambitious goals, the nation is well-positioned to spearhead a green revolution that harmonizes economic growth with environmental stewardship. As global demand for eco-friendly and traceable agricultural products soars, Vietnam's commitment to green, circular, and high-tech agriculture presents a wealth of opportunities for businesses to innovate, diversify, and capitalize on emerging market trends.
This comprehensive analysis delves into the immense potential of Vietnam's agricultural sector, exploring the current landscape, export strengths, and the imperative for sustainable practices. It illuminates the multifaceted benefits of embracing cutting-edge technologies, circular models, and eco-friendly approaches, while highlighting the myriad prospects awaiting forward-thinking enterprises. From smart farming solutions to organic input production and green agritourism, this report serves as a roadmap for businesses seeking to thrive in Vietnam's burgeoning eco-agricultural ecosystem.
1. Current Situation
According to HSBC, agriculture contributes about 12% to Vietnam's GDP. Agriculture has long been the backbone of Vietnam's economy with several comparative advantages such as arable land, forest cover, territorial waters, tropical climate, available labor force, and cost-effectiveness. Vietnam is exporting a range of agricultural products around the world. Vietnam's main export items are rice, coffee, cashew nuts, and vegetables and fruits, accounting for over $16 billion in agricultural exports. Many of Vietnam's agricultural products have gained access to new markets. From the beginning of the year until now, the prices of durian, coffee, and rice have increased by 20%, around 5-9%, and 6% respectively. Total export turnover of agriculture, forestry, and fishery is expected to reach $54-55 billion in 2024.
2. Potential Export Products
Vietnam's vegetable and fruit exports in 2023 reached $5.6 billion, up 66.7% compared to 2022 thanks to a sharp increase in exports to China, the EU, and South Korea. Vietnam's traditional rice export markets recorded high export growth compared to 2022: The Philippines continued to be Vietnam's largest rice importing market, accounting for 38.7% of total exports, reaching 3.14 million tons worth over $1.75 billion, down 1.0% in volume but up 17.6% in value compared to 2022. The report clearly states that in 2023, although Vietnam's coffee exports did not increase in volume, the good selling price of Robusta coffee still resulted in an increase in value compared to the previous year, allowing Vietnam to maintain its position as the world's second-largest coffee exporter, after Brazil. Notably, in 2023, Vietnam's cashew nut exports to all major markets increased compared to 2022. Among them, cashew nut exports surged to markets such as the UAE (up 72.3%), China (up 49.8%), Saudi Arabia (up 46.3%), and the UK (up 24.1%).
3. Green, Circular, and High-Tech Agriculture is Inevitable
Following Vietnam's strong commitment to achieving net-zero emissions at COP26, the government has approved the National Strategy on Green Growth for the period 2021-2030, with a vision toward 2050. Focusing on green agriculture not only helps Vietnam reduce carbon emissions in agricultural production but also meets the increasingly stringent requirements from export markets such as the US or the EU. To best prepare for the implementation of these regulations, the Ministry of Agriculture and Rural Development has signed a specific action program with the Coffee Association to provide assistance and support to coffee farmers in the Central Highlands to understand and comply with these regulations, and to transition to sustainable, low-emission, and deforestation-free coffee cultivation practices.
At the recent 2023 Prime Minister's Dialogue with Vietnamese Farmers, Minister of Agriculture and Rural Development Le Minh Hoan stated that green agriculture, ecological agriculture, and circular agriculture are irreversible trends. For instance, in Tu Ky, Hai Duong, farmers practice a three-tier system of rice - shrimp - vegetable production, generating value from three layers. Farmers earn more income from selling shrimp than rice, but without rice, the other two products would not exist.
According to Minister Le Minh Hoan, we must rethink our approach: growing rice is not just about selling rice but also selling other products from ash, rice husk, straw, etc. Farmers and cooperatives must also rethink and increase processing, utilizing rice by-products to make other products to increase income for rice growers.
"In the context of rising input costs, these models will help farmers reduce costs. When product prices do not increase but costs decrease, farmers' profits will still increase. Therefore, the agricultural sector also needs to promote such models, which is the trend of circular agriculture, green agriculture, and ecological agriculture in harmony with nature. Any change is difficult, but if we do not change, it will be more difficult," the Minister emphasized.
Taking the Mekong Delta as a typical example, the Minister stated that this region has advantages and many ecological agricultural production models, such as the shrimp-rice model, rice-fish farming in Bac Lieu, Soc Trang, Ca Mau, which has spread to Ben Tre and Tra Vinh. This is indeed circular agriculture.
The development of high-tech agriculture and innovation in science and technology is considered one of the key and focused solutions. Applying science and technology to address challenges in agricultural development through the advantages of technologies such as biotechnology, greenhouse technology, drip irrigation, sensor technology, automation, the Internet of Things, etc., helps reduce production costs, increase productivity, reduce costs, improve product quality, and protect the environment. Moreover, high-tech agriculture enables farmers to take control of production, overcome seasonality, reduce dependence on weather and climate, and meet market demands for product quality.
According to the report, advances in science and technology contribute more than 30% of the added value in agricultural production and 38% in crop and livestock breeding. Post-harvest losses of agricultural products have decreased significantly (rice losses below 10%,...). The level of mechanization in land preparation for annual crops (rice, sugarcane, corn, vegetables) reaches about 94%; rice harvesting reaches 50% (90% in the delta provinces).
With the assistance of science and technology applied in all stages of the agricultural production process, from research, crop and livestock breeding; sowing and cultivation techniques; animal feed; fertilizers, pesticides, veterinary drugs; processing and post-harvest preservation techniques... new value has been created for agricultural products, ensuring freshness, safety, increased productivity, and quality standards... These results have contributed to the rapid growth of Vietnam's agricultural export turnover over the years, with total export turnover of agriculture, forestry and fishery estimated at $41.3 billion in 2019; the trade surplus of the entire sector is expected to reach $10.4 billion.
4. Opportunities for Businesses
The trend of green, circular, and high-tech agriculture is becoming inevitable in Vietnam, opening up many opportunities for businesses, including:
Providing smart agricultural solutions: Businesses can develop and provide high-tech solutions such as automated irrigation systems, environmental sensor devices, smart farm management software, gardening robots, agricultural product traceability applications, etc. This is a large potential market.
Providing organic agricultural inputs: The demand for organic fertilizers, biological pesticides, and clean crop varieties is increasing with green agriculture. Businesses can invest in the production and distribution of these products.
Building safe agricultural product supply chains: Businesses can establish systems for the production, harvesting, storage, transportation, and consumption of safe, organic agricultural products according to high standards.
Consulting and training in green agriculture: Providing consulting services and training in organic farming techniques and circular production processes for farmers and businesses.
Recycling agricultural waste: Investing in technology to process and recycle agricultural waste into organic fertilizers and renewable energy sources such as biogas.
Green agricultural tourism: Combining ecotourism and experiencing clean agriculture at model farms.
Vietnam's agricultural sector stands at the cusp of a transformative era, driven by the inexorable forces of sustainability, technological innovation, and circular practices. As the nation charts its course towards a greener, more resilient, and resource-efficient future, the opportunities for businesses to capitalize on this paradigm shift are vast and multifaceted.
By embracing smart farming solutions, organic input production, safe agricultural supply chains, consulting and training services, waste recycling initiatives, and green agritourism ventures, enterprises can position themselves at the forefront of Vietnam's agricultural renaissance. This transition not only aligns with global market demands but also contributes to the nation's commitment to environmental stewardship and sustainable development.
Reference Sources:
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