Insight:
- Historically, agriculture has been a traditional industry, an important part of Vietnamese culture.
- Nowadays, it sector plays a vital role in Vietnam’s economy. It will hold even greater potential for the future.
Agriculture is a potential industry in Vietnam. The market has impressive expansion and exports for more countries in the world. Global consumers are enjoying an increased demand for Vietnam agriculture products. In today’s article, explore the information about this sector.
The Vietnam agricultural journey from the past to now
After the Doi Moi Economic 1980, Vietnam transformed from a nation heavily affected by food shortage to one of the world’s leading products and exporters of many agricultural products. Their products are exported including coffee beans, peanuts, rice, and others.
Although the agricultural industry’s contribution to GDP has fluctuated over the past five years, especially when it transformed into a service and manufacturing economy, the GDP remains stable. This industry has been Vietnam’s largest employer across economic sectors, with more than 13.9 million employees in 2022.
After Vietnam liberalized trade and reformed agriculture, the production volume and export value increased significantly. Since 1990, some major intensive monoculture systems have appeared in Vietnam, like rice monoculture in the Mekong Delta and the intensive production of coffee and pepper in the Central Highlands. And Vietnam has become one of the largest rice producers in the world.
Meanwhile, some agricultural products also become the main force for export commodities including coffee, pepper, cashew nuts, and rubber. In recent years, just after Brazil, Vietnam has constantly been the top two in coffee export globally. The agriculture of Vietnam has gone on a long journey with fluctuations and challenges. This impressive increase makes agriculture essential, contributing to economic growth and enhancing people’s quality of life.
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Agricultural is a key sector of Vietnam’s economy
The agriculture industry in Vietnam has many changes and updates, not just on fields and factories, but also a space of creativity. With many updates, including high-tech product upgrades, green agriculture has brought more potential for the sector.
Despite the economic difficulties, this industry still achieved a growth rate of 3.83%, the highest in the past 10 years. More than ten agriculture products reach an export turnover of $1 billion and sometimes more. Some key products, including durian and rice, still provide their position in the global market and have reached export values of billions of dollars.
Along with the success of rice when it reached the top of the world, coffee continuously sets record prices and has an export turnover of nearly $4.2 billion. In 2023, the export turnover of coffee still increased by 3.1% and reached nearly $4.2 billion. Beyond that, cashew nut export turnover increased by 23.4% in volume and 17.6% in value, reaching $3.63 billion.
The potential of Vietnam’s agricultural market
Vietnam’s agriculture sector holds significant potential for development. One of Vietnam’s agricultural strengths is natural advantages with a favorable climate that enables cultivating many crops and livestock.
Fertile land and abundant water resources are major advantages, particularly for the rice industry, a traditional strength of Vietnam. Beyond it, a large population with an abundant agricultural labor force and competitive labor costs compared to other countries in the region creates a solid foundation for the industry’s growth.
The national demand is increasing, especially for clean and safe products. Furthermore, Vietnam has participated in many Free Trade Agreements (FTAs). This opens the doors for exporting agriculture products to promising global markets.
The government also actively boosts this sector through many support policies, including infrastructure investment, encouraging high-tech applications, and providing financial assistance to farmers. National target programs for agriculture and rural development also contribute significantly to the sector’s overall development.
Vietnam’s agriculture market trend is focused on sustainability. Demand for organic and health-safe agriculture products is increasing. It creates favorable conditions for sustainable agriculture to thrive in Vietnam. Promoting and adapting high-tech and digital transformation in the sector contributes to improving productivity, quality, and production efficiency, elevating Vietnamese agriculture to new heights.
Agricultural market challenges from recent innovations
The agriculture market in Vietnam is an impressive increase, but it also faces many challenges. First, the difficulties in production, businesses lacking orders, and shrinking consumer markets make exports decrease or increase in volume but still decrease in value compared to last year.
There are also many products that still depend on “resource exports” based on resource advantages and “raw exports” cause of the focus on processing with a high proportion of imported materials and inputs. There is also have lack of knowledge and technology, including artificial intelligence and automation.
Vietnam is spending tens of billions of dollars to import agriculture and supplies. Up to 60% of raw materials for animal feed, and 40% of fertilizers, fertilizer production materials, and pesticides are imported.
A new challenge for the agriculture industry is reducing carbon emissions and moving toward green agriculture. Businesses in this sector must innovate and adapt to keep pace with global trends. They should change production methods, operations, and cultivation practices to ensure environmentally friendly processes.
Vietnam’s agriculture is most dependent on weather conditions. Cause of it, climate change poses the biggest challenge to the sector in Vietnam. The storms in recent times have caused significant damage for farmers. They reduce crop yields and impact the entire agricultural landscape.
To face these challenges, individuals, farmers, and the government must continuously innovate to adapt and develop solutions for timely responses.
Conclusion
Overall, agriculture is one of the key industries in Vietnam’s economy. This sector makes significant contributions to both GDP and the economy. Cause of it, government and businesses are considerable attention. With the update of technologies and government efforts, this industry holds great potential and is forecasted to thrive. Follow our blog for more interesting information!
