Hanoi (VNA) – The Ministry ofAgriculture and Rural Development (MARD) held a meeting in Hanoi on December 5to discuss ways to sustainably develop raw material areas and improveprocessing capacity and market access for agro-products of Vietnam.

MARD Minister Nguyen Xuan Cuong said though theagricultural sector of Vietnam has obtained major achievements, it cannot reston its laurels due to three challenges, which are the small production scale,climate change impacts and economic integration into the world.

He admitted that the country has goodagricultural production capacity but the production remains ineffective due tothe small scale. Besides, deep processing has just developed for only somecommodities like shrimp, tra fish and milk to create products with higher addedvalue. Most of other agricultural products have very short value chains.

Vietnamese farm produce have entered 180 marketswith total export revenue of over 40 billion USD each year. However, thecountry has only done a good job in opening new markets while marketexploitation and development efforts are still modest, the official noted.

Echoing the view, World Bank Country Directorfor Vietnam Ousmane Dione said there remain concerns about the quality andsustainability of the country’s agricultural growth, pointing out the lowprofit for smallholders, a lack of strong connection between product qualityand food safety, big post-harvest losses, and limited innovation.

He recommended Vietnam consolidate theconnectivity among the main factors in agricultural development, boostcooperation in production planning among provinces, and increase tradepromotion.

According to Minister Cuong, to address thoseshortcomings, it is a must to boost agricultural restructuring with a focus onenhancing concentrated production, developing commodities of Vietnam’sstrength, applying scientific advances, and re-organising production.

Dang Kim Son, former Director of the Instituteof Policy and Strategy for Agriculture and Rural Development, said raw materialareas are the starting point and the foundation of agricultural value chains,noting that the successful formation of these areas will be the prerequisitefor handling other stages in value chains.

Sharing their experience in forming raw materialareas, a representative of the UN Industrial Development Organisation (UNIDO)said they chose small- and medium-sized private companies located in the corezones of raw material areas so as to cut down intermediary steps, reduce thecost of risk, and better monitor input materials.

UNIDO has successfully applied this model tobuilding chains for mango in the Mekong Delta and for vegetables in thenorthern mountainous region, the representative said, noting that one of thefirst two businesses licensed to export mango to the US is involved in thismodel.

At the meeting, the MARD and UNIDO signed anagreement to implement a project on improving the quality and the adherence toquality standards of mango value chains in the Mekong Delta./.