Vietnam may be among the world’s top rice exporters, but it could lose its competitive edge against other countries once the ambitious Trans-Pacific Partnership (TPP) trade pact takes effect, local experts have warned.
Vietnamese rice growers and exporters are paying more attention to quantity over quality, and there is no national rice brand on the global market, all of which makes the country less competitive against other rice-exporting nations when selling to the other 11 nations party to the TPP accord.
The Southeast Asian nation currently ships its rice to all of the other 11 TPP countries, but each market has a different roadmap to eliminate tariffs on Vietnamese rice exports.
Japan would not eliminate its tariff for Vietnam’s rice exporters, while Mexico and Chile are committed to zeroing the tax in eight to ten years after the trade accord is put in place.
The remaining eight countries, including Australia, Brunei, Canada, Malaysia, New Zealand, Peru, Singapore, and the U.S., will eliminate tariffs on Vietnamese rice exports immediately after the effective date.
The TPP pact, which aims to liberalize commerce in 40 percent of the world's economy, was reached by 12 countries on October 5, and its full text was only released a month later.
The party countries are expected to officially sign the deal no later than the end of the first quarter of next year, after which their legislatures will begin the ratification process.
Vietnam's lawmaking National Assembly could begin considering the pact in mid-2016, according to The Saigon Times Online.
The Vietnamese rice industry has been urged to make changes immediately to be able to cope with the challenges stemming from the TPP.
The first change should be given to the choice of seeds, according to Professor Vo Tong Xuan, an agriculturalist.
“While other countries have their own national rice brands, no one knows which brand represents Vietnam,” Prof. Xuan said.
Thailand has such famous brands as Khao Dawk Mali and Hom Mali, while Cambodia and Myanmar are known for the Romduol and Paw San rice, respectively, he elaborated.
“We just have no national brand, so how could we grab the TPP opportunities?” he wondered.
Vietnam does not lack delicious and good seeds, but the problem is farmers only choose to grow “those that yield bigger productivity, not better quality,” the professor said.
“Such a mindset is totally different from farmers in other countries,” he added.
Even worse, some Vietnamese businesses usually mix rice of various quality and prices together and sell them as high-quality, costly products, which ruin the reputation of the Vietnamese grain.
“Vietnam is known around the world as the exporter of mixed rice, which is a big shame,” Prof. Xuan said.
Pham Van Du, deputy head of the Department of Crop Production under the Ministry of Agriculture and Rural Development, said Vietnam should start building its own national rice brand to be able to grab the opportunities brought by the TPP.
“The first step should be selecting the best seeds in every rice growing area, and developing strategies to yield high-quality rice from these seeds,” he said.
Lam Tuan Anh, director of the Thinh Phat Co., a food company based in the southern province of Ben Tre, said the government should also erect technical barriers to prevent businesses from exporting poor-quality products.
“Quality checks should be strengthened and any batch of products that fails to pass such tests should be banned from export,” he advised.
“This will help rebuild the reputation of Vietnamese rice.”