Vietnam faces many challenges in the area of agricultural marketing but lacks experience and capacity in market-based research. This project is developing a framework to analyse agricultural marketing issues. Researchers are describing (and quantifying) the current marketing channels for pigs, vegetables and canned fruit in Vietnam, and identify the role of the public and private sectors in marketing these products. They are also comparing the experiences of public and private agricultural marketing services in China, Thailand and Australia with the situation in Vietnam. The researchers are working with the Information Centre for Agriculture and Rural Development - the market research and market information unit of Vietnam's Ministry of Agriculture and Rural Development - to determine how the Centre can provide ongoing market information services to these and other industries.
The emphasis of the project was on building research capacity in agricultural economics within the Ministry of Agriculture and Rural Development, with a focus on marketing. One of the most significant outcomes of the project was the redesign of the collaborating Vietnamese agency based on lessons learned international comparison sub-project, particularly the overseas study tours to China, Thailand and Australia.
The original collaborating agency was the Informatics Centre, which was subsequently merged with the Institute for Agricultural Economics, given a broader mandate and renamed the "Institute for Policy and Strategy for Agriculture and Rural Development". In addition to its existing duties in providing agricultural economics research, the mandate was broadened to include a role as the strategic think tank for the Ministry. The detailed operational structure of the new Institute was designed after careful consideration of the key benefits of the institutions studied overseas, as well as their relevance to the Vietnamese context.
The most influential of the overseas institutes visited was the Chinese Centre for Agricultural Policy, which is a financially autonomous research unit operating within the Chinese government. The report on this study tour (Pham Quang Dieu 2004: CCAP: A vanguard in research system in China, ICARD Policy Briefing Series) has had wide circulation within the Vietnamese government, both within MARD and also Ministries of Science and Technology, Finance, and Internal Affairs because it deals with the problems of institutional reform and incentives within a communist government setting.
A case study was undertaken on fruit and vegetable production and marketing in the northern mountains region. In the past few years the fruit market had suffered significant price slumps due in part to the loss of fruit exports to China (due to a free trade agreement between Thailand and China) and also due to increasing domestic production.
The research activity investigated the production of longan, plums and choko using producer surveys and key informant analysis. The costs of production were quantified and it was shown that farm production is barely viable at current market prices for plum and longan, whereas choko producers had been less susceptible to recent price slumps despite having significantly higher costs of production. It was also found that longan producers, who had more diverse source of income, were less susceptible to the fruit price slump than plum producers.
Characteristics of the marketing chain for each of the three products were assessed. Econometric analysis of data collected from plum producers revealed a negative return to manure input, but further investigation demonstrated two main fertiliser regimes, a low yielding system based on large amounts of manure; and a higher yielding system based on chemical fertiliser with some supplementary manure.
Expenditure on nitrogen appeared to be significantly higher than what was required for the yields achieved by farmers using chemical fertiliser. The main problems in the supply chain were related to lack of infrastructure and long transport distance which caused high losses, particularly for plum. Coordination between intermediaries in the supply chain was also a problem.
A partial equilibrium model of the plum supply chain was developed to demonstrate the impact of policy initiatives on demand, supply and market prices. For example, it was shown that the main beneficiaries of the local policy makers' plans to increase area planted would be consumers rather than producers, because of the depressing effect it would have on prices. These findings were reported to the local stakeholders at a workshop attended by the Department of Agriculture and Rural Development staff, farmers, and People's Committee members.
A consensus was reached by workshop attendees that market promotion, and emphasis on quality rather than quantity, needed to be a key element in future provincial policy direction.
Most of the funding provided to the Australian institutions was to conduct training courses on quantitative economic analysis. Training was organised around three themes, being econometric analysis of demand and prices, mathematical programming for supply and market equilibrium analysis and global trade modelling. Formal training courses were supplemented by informal mentoring of research activities and the team produced research outputs under each of the training themes.
Links:
[1] http://www.aciar.gov.au/country/Vietnam
[2] http://www.aciar.gov.au/programarea/Agricultural Development Policy