A farmer harvests pepper. (Photo: congthuong.vn)Hanoi (VNS/VNA) - Experts have said Vietnam's pepper industry hadbetter change its growth model and enhance quality to take advantage of freetrade agreements (FTAs).
Nguyen Nam Hai, chairman of Vietnam Pepper Association (VPA) told a conferenceon pepper that wrapped up yesterday in the Central Highlands province of Dak Nongthat the pepper industry this year had seen difficulties due to decreasingselling prices and slow growth compared to last year.
The world’s pepper output is forecast to increase, causing prices to keepfalling. Output is set to reach 602,000 tonnes in 2019, an 8.27 percentyear-on-year increase. Big producers such as Brazil would up by 28 percent,Cambodia 17 percent and Vietnam 9 percent to 240,000 tonnes.
“Vietnam now has about 100,000ha of pepper with output of 247,000 tonnes.However, pepper prices are still at a low level while production costs havebeen on the rise of at least 10 percent from the previous year. This was whythe country’s pepper value in the first seven months of the year was slightlyreduced by 0.8 percent to reach 514 million USD despite the 32 percent increaseof volume,” he said.
The Ministry of Agricultural and Rural Development is working with localitiesto examine the development of pepper farming to design a sustainable growthplan for the sector.
Pepper cultivation in Vietnam boomed between 2001 and 2017, with totalplantation increasing from 35,300 ha to more than 151,900 ha. The 2017 figurefar exceeded the ministry’s plans of having 50,000 ha nationwide by 2020.
The growth was driven by good peppercorn prices, which prompted farmers toexpand their farms and use growth promoting substances and pesticides to boostyield. When prices dropped, the farming area also shrank to 149,800ha in 2018,and was estimated to hit 140,000ha this year.
Based on Vietnam’s conditions and global demand, the ministry envisions thearea of pepper farming should be kept at about 100,000 – 120,000 ha, withoutput estimated at 237,000 – 256,000 tonnes.
As such, a total of 70,000 ha will need to be replanted between 2017 and 2030,mostly in key pepper production hubs in the Central Highlands and thesoutheastern region.
The ministry said pepper cultivation remained unsustainable due to the rapidexpansion of plantations, particularly in areas unsuitable for the plant,during the period of high prices and the lack of effective measures to controldiseases.
In addition to cutting the total farming area, farmers have been urged tofollow sustainable and good agricultural practices for improved quality andfood safety. This could help Vietnamese peppercorns engage deeper in globalfarm produce distribution chains.
The ministry also asked the sector to build models that link businesses andfarmers in production, processing and product origin tracking.
In the context of these difficulties and competition, new generation FTAs suchas the CPTPP and EVFTA would be the “salvation” for the pepper industry.According to commitments in FTAs, the tax rate for pepper products in membercountries will be significantly reduced once they come into effect.
The Import-Export Department under the Ministry of Industry and Trade said ninecountries joining in the CPTPP would immediately remove tariffs for pepperproducts, namely Australia, New Zealand, Canada, Malaysia, Singapore, Brunei,Chile, Peru and Japan. This was set to give Vietnamese pepper a competitiveedge in CPTPP countries.
In the EVFTA, EU countries committed to removing tariffs for pepper productsonce the agreement takes effect, another boon for exporters.
To fully tap the potential, the pepper industry was asked to not increaseplantation areas and restructure toward sustainable development. It should alsoapply clean agriculture standards including VietGAP and GlobalGAP as well asimprove quality and food safety.
Pepper farmers must closely follow production processes, while processing firmsshould continue to renew their technologies. – VNS/VNA
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