Package of policies proposed to support livestock post-pandemic recovery

The AHAV has just sent a document to the Prime Minister recommending a number of solutions for sustainable livestock development.

Input costs are among the highest in the region

In the document sent to the Prime Minister, the AHAV said that Vietnam’s livestock industry has never faced such difficulties and challenges as now. In the context of the pandemic, climate change, and new-generation free trade agreements that Vietnam has signed and put into full effect, the domestic livestock industry faces additional risks such as food safety, environmental pollution, and market competition in integration. The AHAV listed four main barriers:

Firstly, the husbandry scale in our country is not as large as other fields of agricultural production, but the density is among the highest in the region and the world. Moreover, livestock production is mainly small-scale, with a high number of participants, but investment stands at a low level and standards of production and business management in different good sectors are still inadequate.

Secondly, the disease and epidemic control, slaughtering, processing and marketing for livestock products still face obstacles. Input costs of domestic livestock are among the highest in the region, especially those of land, transportation, and credit loans.

Thirdly, the proportion of imported raw materials for animal feed and veterinary medicine is still high while imports of livestock products, especially low-cost foods, are more and more increasing. When import tariffs on livestock products are at 0%, market pressure on domestic livestock increases, but support industries for livestock are still limited.

Finally, the AHAV said that the current management system of the livestock and veterinary industries still has overlaps failing to synthesize the strength for the whole development process. For example, requirements for disease control and slaughter must start right from the process of technological application and at the breeding area. According to the AHAV, the current structure of production organizing has not effectively resolved this problem.

Despite many shortcomings, the Association believes that Vietnam’s livestock industry has full capacity of maintaining production meeting the needs of essential foods for domestic consumption and increasing exports if looking at its overall infrastructure, facilities, techniques, management level and scales of animal herds.

Strict control on import of livestock products

In order to meet the needs of essential foods for domestic consumption, increase exports, and ensure the livelihoods of tens of millions of farmers, the Association proposed the Prime Minister to direct six related ministries to undertake relevant measures as follow:

For the Ministry of Agriculture and Rural Development, the AHAV specifically recommended solving three issues. The first is to structure and direct the production of main livestock meats such as pork, poultry, buffalo, eggs and milk following closed chains and be relevant to the potential and needs in the domestic market and in international integration. In particular, it is necessary to maximize the role of enterprises and associations to balance and regulate production and be closer to the market.

The second is to consolidate functions and tasks and decentralize public services for different good associations in the field of livestock and veterinary medicine in accordance with the market economy and international integration.

The third is to coordinate with the Ministry of Industry and Trade in strictly controlling the import of livestock products, especially the cheap and commercial live animals. The Association cited evidence in 2020 when pork imports increased by 404%, poultry meat by 15%, buffalo meat by 44%, etc., causing hardship for domestic livestock products to be consumed so they had to be sold below production costs.

For the Ministry of Industry and Trade, the Association recommends creating the best conditions for circulation and stabilize the livestock product market in order to encourage domestic livestock development, at the same time expand the system of food stores and supermarkets including those in rural areas.

The AHAV also proposes negotiations on the opening of export markets for livestock products and paying attention to heat-treated poultry meat products as this is an advantageous commodity of domestic livestock.

Along with that, it proposes the Ministry of Industry and Trade to strengthen negotiations with major exporting partners such as the US, Brazil, Argentina, India, Australia, Russia and Ukraine to issue preferential trade policies and conditions for exports of raw materials for animal and aqua feeds to Vietnam. This is a group of goods that Vietnam has had a trade deficit worth an average of about US$6-6.5 billion per year.

Proposal to reduce import tax on corn and soybeans

For the Ministry of Finance, the AHAV wants a package of policies to support post-pandemic production recovery, including loans with credit interest rates support for farmers to restore and expand production.

In addition, the Association recommends adjusting the import tax policy to support domestic livestock according to the framework of commitments in trade agreements. Specifically, it proposed to increase or maintain the import tax on pork and poultry meat; reduce import tax on corn and soybean and increase import tax on some additional raw materials and animal feeds that can be produced domestically, such as mineral feeds, organic acids, etc.

For the State Bank, the AHAV proposed preferential policies for loan credit, debt freezing, debt rescheduling, and continued providing loans for businesses and farmers to restore production. It is because when compared to other industries, livestock production has been suffering from “overlapping pandemics” for the past two years.

For the Ministry of Transport and Communications, the Association proposed policies to encourage investment in developing systems of warehouses, seaports, river ports and logistics to support import and export, as well as trading in animal feed and agricultural products. Without implementing these policies soon, the livestock industry will face difficulties in reducing costs because every year, the country imports 20 million tons of raw materials for animal and aquaculture feeds along with over 100 million tons of refined and forage feeds are circulating in the country.

For the Ministry of Natural Resources and Environment, the Association is interested in land policies for developing large-scale concentrated production zones in accordance with the Law on Livestock and the revised Land Law. In addition, the AHAV hopes the Ministry will adjust technical regulations on wastewater in line with the reality of the livestock industry.

On the local side, it urges the ministry to create favorable conditions for circulation and restoration of livestock production, especially for producers to best access disease control solutions for humans and animals.

According to statistics from the AHAV, the industry has always maintained an average growth rate at the threshold of 5-6%/year in the past 30 years. Growth rates in many areas have grown over double-digit for many years such as animal feed processing and milk processing basically meeting the demand for domestic consumption and increasing export.

The whole country has more than two million households of raising pigs, nearly 2.2 million of raising cattle, nearly seven million of raising poultry and hundreds of thousands of raising other livestock.

Most of the investment capital for livestock infrastructure development in recent years has been from private investors and FDI enterprises. In many fields of livestock, Vietnam has a high rank in the region and in the world such as: Pig herd size ranks in the top 7, waterfowl ranks second in the world, feed processing industry, dairy cow productivity and Dairy processing industry are at the leading levels among ASEAN countries.