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Foreign economic assistance may cost too much   2010-04-05 - TBKTSG

A lot of foreign companies that purchase goods in Vietnam are trying to help Vietnamese producers overcome technical barriers erected by import countries.


The projects on supporting Vietnamese farmers

Earlier last week, the Mazzetta Company (US) announced a project to assist Vietnamese farmers access sustainable fish farming. Tra fish farmers in An Giang province will be shown aquaculture and processing methods that can make products meet requirements set by import countries.

According to Tom Mazzetta, Chair of Mazzetta Group, Vietnam’s tra fish fillets met with difficulties in the US market because they could not meet food hygiene standards.

With the new support program, Mazzetta aims “to provide necessary information to Vietnamese producers, so that they can know about the requirements, standards and overcome the barriers of the Farm Bill.”

In mid-March 2010, the International Finance Corporation (IFC) and Atlantic Vietnam (belonging to Ecom Group) officially set up a training center for Vietnamese coffee growers. The center will aid farmers in obtaining international certificates on sustainable coffee planting and improving productivity, thus helping farmers increase their income.

According to Alexander Gruber, General Director of Anlatic Vietnam, the center will train 4000 farmers over three years and help coffee-growing households to obtain certificates on sustainable coffee planning such as Utz, Rainforest, or 4C. Currently, coffee with these certificates can be sold at prices higher by $20 per ton than normal coffee.

Worries exist

The fact that foreign enterprises want to help Vietnamese farmers improve the quality of their farm produce will make Vietnam’s products more well-known in the world as clean and safe for consumers. Currently, European and US retailers are all members of environment protection organizations, therefore, they prioritize ecological products and products that have safety certificates.

However, “the worrying thing is that domestic companies do not control anything in such conditions. This means that they risk not being able to purchase materials in their home market,” an analyst commented.

What will happen if the material growing areas and farm produce fall into the hands of foreign companies?

Do Ha Nam, Deputy Chair of the Vietnam Coffee and Cocoa Association (VICOFA) noted that Vietnamese companies face big difficulties in collecting materials. There are up to five big foreign groups that specialize in collecting farm produce, about 30 percent of the total output every year.

In the immediate time, as foreign companies collect materials in Vietnam, this will push prices up, thus benefiting farmers.

Yet over the long-term, when they hold all the material, collection prices will go down because they will be the only buyers, Nam warns. “Vietnamese companies, with weaker financial capabilities, will not be able to compete with foreign companies.”

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