Vietnam’s plant-based agriculture is experiencing rapid growth and Vietnam is becoming a key player in global agriculture. Here’s what potential foreign investors should think about when considering entering Vietnam’s agricultural sector.
I. Vietnam's Agricultural Success Story Unveiled
Vietnam has been selected by the United Nations to host the 4th Global Conference of the One Planet Network’s Sustainable Food Systems Programme in April this year. This will bring together experts from around the world to discuss how best to develop ‘sustainable, resilient, healthy, and inclusive food systems’. At the same time, the World Economic Forum (WEF) has selected Vietnam as one of the first three countries to pilot the Food Innovation Hub, a flagship initiative of the Food Action Alliance designed to improve sustainability in food production.
As Vietnam becomes more visible on the global agricultural stage, we look at sector exports, opportunities for foreign investors moving forward.
1. Funding development in agriculture in Vietnam Overseas direct assistance (ODA) has played a key role in Vietnam’s agricultural growth coupled with the support of the Ministry of Agriculture and Rural Development (MARD). By the end of 2022, MARD had approved four ODA projects or had investment policies with a total loan value of US$840 million. The ministry also coordinated with businesses to prepare 14 new project proposals requiring total capital of US$3.2 billion. Last year, the agricultural sector also mobilized US$300 million in grant aid and approved 15 projects worth US$25 million for non-governmental organizations. It also attracted a large amount of FDI with 12 new projects and US$68 million in newly registered capital.
But more capital is needed and, with few restrictions on foreign investment in Vietnam’s agricultural sector (see below), foreign producers of agricultural products and their private finance may be necessary in order to facilitate the sector’s continued development.
2. Government incentives and support Decree No.57/2018/ND-CP on the mechanisms required to attract investment into agricultural and rural development forms the backbone of government policy aimed at increasing investment in the agriculture sector.
Decree 57 covers many types of new incentives for agricultural enterprises. These include:
being exempted from payment of some fees;
being exempted from payment of land rental and/or water surface in some instances;
interest rate subsidies on commercial loans; and
government funding for some facilities. For example, waste treatment, electricity, water infrastructure, as well as workshops and equipment required for some projects.
Furthermore, currently circulating is the Draft Strategy for International Cooperation in Agriculture and Rural Development to 2030.The strategy is divided into three main groups of tasks and solutions:
a. Proactive international integration;
b. Strengthen partnerships; and
c. Mobilizing external resources (read: FDI).
3. Free trade agreements Vietnam is a part of 15 Free Trade Agreements (FTAs). This is opening markets like South Korea where, more than seven years after implementing the VKFTA, Vietnam has become the third largest mango supply market for S. Korea, reaching 1.7 thousand tons. This is equal to US$7.4 million.
As a result of the EVFTA that is now in place, Vietnam has also become the largest source of cashew nuts for the EU. In the first 10 months of 2022, Vietnam exported 98.97 thousand tons of cashews to European markets, worth US$699 million. This represents an increase of 9.8 percent over the same period in 2021.
4. Foreign investors in Vietnam’s agricultural sector A number of foreign investors are already making headway in Vietnam’s agricultural sector and many of them have been operating in the country for quite some time. With the aforementioned limits on land ownership for foreign investors, international firms tend to be concentrated in either ancillary services or high-value goods, such as nuts, coffee, or fresh cut flowers.
II. Nurturing Excellence and Sustainability: VHG Ex-Import's Commitment to Quality
🌿 Elevating Excellence: Cultivating Quality at VHG Ex-Import
VHG's journey is rooted in a commitment to excellence that shines through in every aspect of our operations. Our proud history resonates with unwavering dedication to delivering products of the highest quality. This commitment comes alive through our diverse fruit offerings, sourced from the vibrant landscapes of Vietnam.
🌐 Sourcing Expertise: Unveiling the Finest Globally
Our sourcing team stands as a beacon of expertise, traversing global markets to bring you nothing but the best. With an acute eye for quality and an understanding of the diverse preferences of consumers, we ensure that each product we offer reflects excellence and authenticity.
🔧 Crafting Tailored Solutions: Your Success, Our Priority
At VHG, we recognize that each client's needs are unique. Our hallmark lies in providing tailored solutions that resonate with your requirements. From the meticulous selection of sources to rigorous inspections and timely delivery, we are committed to making your success our priority.
🌱 Sustainability Drive: Paving the Path for a Greener Tomorrow
Our journey toward sustainability is deeply ingrained in our ethos. As we grow, we take conscious steps to minimize our ecological footprint. By adhering to responsible sourcing practices, we pave the path for a greener and more sustainable future for generations to come.
🗣 Insights from Ms. Tram Nguyen, Sourcing Leader: "With a dedication to delivering premium products to the exacting markets of the Americas and Europe, we have taken special care in assessing the origins of our diverse fruit sources from Vietnam. Our rigorous manufacturer inspection processes further ensure that every step of the journey meets the highest standards of quality."
Stay tuned for more updates as we continue to elevate excellence and shape a more sustainable future with VHG Ex-Import.
