From now until the end of the year, the agricultural sector is determined to face five major difficulties from different angles: production, processing; credit; transportation, logistics; the rising costs of electricity and vaccines

From now until the end of the year, fruit trees will be heavily affected to purchasing
and consumption due to lack of harvesting workers and slow progress of purchasing.
Photo: N.H 

According to the Planning Department (Ministry of Agriculture and Rural Development), since the beginning of the year, the Covid-19 pandemic has significantly affected import and export activities such as: reducing orders of some export firms, labour shortage.

In foreign markets, there has been a shortage of supplies, a shortage of empty containers, a local stagnation of transportation due to narrowing of airways and waterways, a shortage of labour, causing an injury to trade in agricultural products on the international market.

Nguyen Van Viet, Director of the Planning Department, said that from now to the end of the year, the whole industry will continue to face many difficulties and obstacles. First of all, in terms of production and processing, with the cultivation industry, the rice harvest and consumption in the Mekong Delta is better because the provinces remove it for businesses and traders to promote purchasing.

However, fruit trees are still heavily affected in terms of purchasing and consumption due to lack of labour for harvesting and slow progress of procurement. The Chinese market tightened disease control, leading to low fruit prices.

Similarly, with the seafood industry, Viet stated that only 30% of seafood firms in the south can guarantee the condition of "three on the spot", the average production capacity is reduced to 30-40%; aquatic raw materials for processing and export only reach 40-50% compared to external raw materials.

It is forecast that the source of raw materials for production in the last months of the year will be 20-30% short of due to the reduction in exploitation, stocking and import; materials for processing will shrink and reducing supply capacity by 50%.

The second outstanding difficulty mentioned by Viet is credit. Exporting firms (vegetables, peppers) are facing difficulties in accessing loans, interest rates are still quite high (mortgage loans with interest rates from 7-8% per year and unsecured loans with interest rates from 20-30% per year).

In addition, the credit policy is increasingly tightened, providing many credit granting conditions. Firms have not received support to reduce loan interest from joint stock commercial banks (except HD Bank).

From a perspective of transportation and logistics, the leaders of the Planning Department analysed, the cost of transporting goods increased. The logistics sector has difficulty in implementing instructions for issuing travel permits to employees.

Guidance in some localities is not close to reality, requiring full implementation of all pandemic prevention measures for individuals who have fully vaccinated, causing difficulties for businesses, employees, and traders in purchasing, manufacturing and importing and exporting.

The fourth difficult factor pointed out by the Planning Department is the cost of electricity. Firms operating in production and processing implement "three on the spot" and "one route, two destinations" in addition to maintaining production, they also have to ensure proper living conditions for workers. Factories and cold storages that have to buy and reserve goods from farmers to process and export when the pandemic ends also increase electricity costs many times.

Finally, on the issue of vaccines, Viet said there is a need to vaccinate workers in the production, processing and purchasing of raw materials in the fruit and vegetable industry, animal husbandry (cattle, poultry and aquatic products) processing agricultural, forestry and fishery products is very high. Currently, the vaccine rate only meets 10-15% for the first dose.

"The lack of workers will not produce enough goods to meet the export contract, the risk of losing customers and decreasing turnover," Viet said.

In a report just sent to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, the Department of Planning said the Ministry of Agriculture and Rural Development should propose to the Government and the Prime Minister to direct ministries, branches and specialised agencies in the locality to study and propose to build a mechanism to open up social activities for people who have been vaccinated.

People who have had one dose and two doses of the vaccine will be able to go and do what in provinces and cities where the vaccination rate exceeds 70% of the population from aged of 18 years. This is to maintain production, circulation and consumption of agricultural goods.

Besides, allowing socialisation of testing Covid–19 and vaccination, allowing businesses to actively source, purchase and vaccinate workers with the guidance of the local CDC.

Regarding the Ministry of Finance, the State Bank, they propose measures to reduce import tax on animal feed ingredients, input materials, credit support and bank interest rates for production facilities to cut input costs for production, limiting the risk of food shortage in the last months of the year; consider building a special credit package for the agricultural sector.

Recommendations sent to the Ministry of Industry and Trade and the Ministry of Transport are to take measures to remove logistics costs in exporting goods; directing domestic distribution corporations to remove difficulties, promote domestic consumption, prioritise the consumption of agricultural products in the locality where the firms operate.

In addition, consider supporting to reduce at least half of the electricity costs for businesses operating in production and processing that must maintain "three on-site" (especially factories, cold storage).