Vietnamese companies have reportedly lost orders to competitors because they have been slow in implementing sustainability commitments, a new report says.
It says the local agriculture industry faces the tough choice of investing more money and effort to adopt high quality and sustainability standards, but this should be seen as an opportunity to become more competitive.
The report, released by RMIT Vietnam last Friday, notes the latest development can undermine the momentum that Vietnam has gained in agricultural exports in recent years, reaching a record high of $53.22 billion in 2022.
It cites as an example the small market share – 0.18 percent – that Vietnam has in the EU, the world’s largest fruits and vegetables import market, because the Vietnamese industry has been unable to meet the stringent quality standards that the bloc requires.
Vietnamese policy makers are aware that food production in Vietnam is yet to meet green growth requirements. Minister of Agriculture and Rural Development Le Minh Hoan said at a recent conference that the country has to transition to a green food system with low emissions. He said greening agriculture was not a burden but an opportunity.
At a recent logistics and supply chain management forum held at RMIT University Vietnam in Ho Chi Minh City, experts shared findings from projects that sought to help Vietnamese manufacturers and food producers comply with environmental regulations.
Nguyen Thi Thanh An, country manager of the Australian Centre for International Agricultural Research (ACIAR) in Vietnam, spoke about supporting vegetables farmers in Moc Chau district, Hoa Binh province acquire Vietnamese Good Agricultural Practices (VietGAP) certification.
She said the experience showed how aiming for high-value distributors like premium retailers in Hanoi can stimulate a sustainable impact on farming and processing.
The farmers, who received technical and business training that empowered them to meet higher food quality standards demanded by high-end retailers, saw a five-fold increase in revenue.
"This success exemplifies the private sector’s role in enabling farmers to apply certified standards for high-value markets.
“The vision sharing among champion farmers, local authorities, private businesses, research institutions, and development partners have significantly benefitted all stakeholders, especially smallholder farmers,” An said.
Nguyen Viet Dung, country chief executive of Bureau Veritas Vietnam, a world leader in testing, inspection, and certification, said the certification process can help farmers and firms learn from the best practices of supply chain partners and adapt to higher international standards.
“This can enhance and promote the brands of Vietnamese agricultural products,” he said.
Emphasizing the role of supply chain leaders in motivating farmers and food processing companies in adapting to global certification, Dung pointed to the success of a carbon neutral project implemented by the nation’s largest dairy firm Vinamilk. The company’s farm in Nghe An was the first of its kind to receive a PAS 2060 carbon neutral certification.
Nguyen Manh Hung, senior program manager for logistics and supply chain management at RMIT Vietnam said: “When all companies strive to compete on costs, quality, and delivery, being green can help a company win sales orders and achieve a competitive advantage in the marketplace.
“Meeting environmental regulations and satisfying higher sustainable requirements are essential in business strategy development and an appropriate thing to do since they are often not a choice but imposed by the realities of a circular economy.”