VietNamNet Bridge – Experts have warned that the TPP (Trans Pacific Partnership), once it is signed, would not help Vietnam attract more foreign direct investment (FDI) into the animal husbandry, while it would pave the way for more livestock products to enter Vietnam.

FDI in animal husbandry modest, imports increasingly high

According to the Ministry of Planning and Investment, by December 15, 2013, Vietnam had licensed 501 foreign invested projects in the agriculture, forestry and fisheries, capitalized at $3.35 billion in total. The figure had accounted for 1.5 percent of the total FDI capital by that time

Of the $3.3 billion worth of capital, 94 percent went to the animal feed production projects, while only one percent to the animal husbandry.

Meanwhile, foreign food products have been flooding Vietnam despite the high selling prices.

Dau tu quoted the Ministry of Agriculture and Rural Development’s report as saying that in 2013, Vietnam imported 167,000 cows and 96,000 tons of poultry. Besides, it also imported tens of thousands of cows across the border lines from Laos, Cambodia, and hundreds of tons of poultry are imported illegally from China every year.

At present, live cows and buffalos from Australia, New Zealand and ASEAN countries bear the 5 percent import tariff, while frozen products from the same sources are taxed 7 percent.

But once the TPP is signed, the import tariff would be down to zero percent, which would certainly pave the way for more foreign meat to enter Vietnam.

Nguyen Thanh Van, Head of the Animal Husbandry Agency under MARD, noted that importing live buffalos and cows is inevitable for Vietnam which is the member of a lot of free trade agreements (FTA).

Foreign products favored in Vietnam

Though Vietnam is an agriculture-based economy, its agriculture products prove to be less competitive than the imports.

Analysts have noted that the import beef from Australia has been selling better than Vietnamese products at supermarkets because of the high quality and the reasonable prices.

Besides cows, Vietnam has also begun importing buffalo from Australia. ABC newswire reported that Vietnam plans to import up to 5,000 buffalos a month, or 60,000 a year, a very big figure if noting that only 800 buffalos were imported by Brunei, Indonesia and the Philippines in total in 2013.

Thoi bao Kinh te Saigon quoted a source from MARD as reporting that in the first 10 months of 2013, the amount of pork and chicken imported to Vietnam increased by three times over 2012.

Le Van Quyet, the owner of a fowl farm in Dong Nai province, noted that Vietnam now imports poultry meat from so many sources, from South Korea, China and Thailand, to the US and Brazil. This has pushed domestic farmers against the wall.

No way out

Most analysts keep pessimistic about the future of the Vietnam’s animal husbandry.

Nguyen Phuong Thanh, Chair of Asia-Pacific Import-Export JSC, noted that the only advantage of Vietnam, the low cost labor force, will not help once TPP is signed. The imports would be much cheaper than domestic products, because Vietnam cannot produce breeders, feed, and medicine.

“Vietnam’s animal husbandry would be in danger, or it would be eliminated,” he said.

Kim Chi