Lack of advantageous conditions, trade pact set to increase Vietnam's reliance on imports
A woman feeds her cows at a farm in Dak Lak Province's Ea Kar District
Imported beef has flooded the local market over the past few years, crushing Vietnam's weak cattle husbandry industry, and the situation is unlikely to change, experts say.
They say the country's heavy reliance on imports to meet domestic demand will not only continue, but intensify in the future because there are no feasible plans to develop a domestic livestock industry, and trade pacts like the Trans Pacific Partnership (TPP) will ease the way further for imported meat.
Imported beef, mainly from Australia, is available at most supermarkets in Hanoi like Co.opmart, Big C, and Metro, and many food shops. Many restaurants announce that they use imported beef for their dishes.
What's more, the prices of imported beef are just 5-10 higher than those of local products, and they are believed to maintain higher safety and hygiene standards. Hence an increasing number or customers are opting for the imported products.
"I prefer Australian beef because it is safer and tastes better, while the prices are not much higher than local beef," said 42-year-old Nguyen Minh Ha of Hai Ba Trung District in Hanoi.
Vietnam has imported 32,500 live cows from Australia for slaughtering since January, according to the Veterinary Department. It has also imported some 4,000 live cows each day from the neighboring countries of Laos, Cambodia and Thailand.
Nguyen Dang Vang, chairman of the Vietnam Animal Husbandry Association said: "The import of beef is unavoidable because of thin local supply. Vietnam does not have good policies to boost its cow husbandry industry."
Beef accounts for 23 percent of the world's total meat consumption, while beef and buffalo meat make up just 7 percent of Vietnam's total meat output, he said.
Food traders now prefer to import live cows for slaughtering rather than frozen beef because of lower import tariffs and higher profits.
Food trader Trung Dong has imported over 15,000 cows for slaughtering to distribute beef to supermarkets, food shops and traditional markets since early this year. Food trader Vissan also imports and slaughters some 1,500 live cows each month.
Import tax imposed on frozen semi-processed beef from Australia, New Zealand and ASEAN members ranges from 14-30 percent, much higher than the 5 percent on live cows. Beef accounts for 55-60 percent of the total weight of an Australian cow after being slaughtered, said Van Duc Muoi, general director of Vissan.
Vang said local beef cannot compete with imported ones because of higher production costs.
"Local beef cannot be competitive because our cattle are raised on small-scale farms or by households, which don't apply advanced technology," he said.
The production cost for cows raised in Vietnam is estimated at some VND60,000 ($2.9) per kilogram, higher than the VND58,000, including import tax, that is paid for Australian beef.
The increase in beef imports has hit the local animal husbandry industry hard. The number of cows raised in Vietnam for beef is expected to decrease to 5.1 million in 2013 from 6.7 million in 2007 and 5.2 million in 2012, he said.
Vang said imported beef could entrench its market dominance after the controversial US-led TPP pact comes into force. Vietnam is set to be one of the signatories to the agreement that will reduce average import tax on meat to zero from the current 15 percent.
Experts have warned that the TPP is very bad news for the local animal husbandry industry, as many of its members, including the United States, Canada, Australia and New Zealand, which are big exporters of animal products, will boost shipments to Vietnam.
Muoi of Vissan said Vietnamese beef can compete with imported products in the domestic market only if local farms get breeding calves and improve their production technology.
"This work will take the industry at least a decade to complete," he said.
However, local farmers are not interested in raising cows for beef because of low profits, and the Ministry of Agriculture and Rural Development has said the country does not enjoy advantageous conditions for developing the industry.
Several years ago, the Viet Farm Company planned to invest in raising cows for beef, and set a target of raising 5,000 cows between 2013 and 2018. However, the company's herd is just 200-strong at present, and it has stopped trying to attract more investment for expansion.
At present, raising cows for beef is mostly a household industry because of limited grass supplies and high investment needed to breed calves. Now, each household raises some 5-7 cows, and seeks naturally growing grass to feed them.
Nguyen Xuan Duong, acting director of the Animal Husbandry Department under the Ministry of Agriculture and Rural Development, said the lack of grazing land is responsible for the decrease in Vietnam's cattle count. The increasing construction of houses and roads in rural areas has seen grass growing areas reduce significantly, he said.
Hot weather conditions are not suitable for the cow raising industry, and the low quality of breeding calves has affected output. Each cow raised in Vietnam weighs some 250 kg, of which 50 percent can become beef. Meanwhile, a cow raised in Australia weighs 500-800 kg.
"Vietnam does not have advantageous conditions for developing cows on large-scale farms. Thus, the local cattle husbandry industry can only meet a part of local demand," he said.
"We will have to depend on imported beef."
The small size of cattle herds in Vietnam has also resulted in thin milk supplies. Vietnam has to depend on imported dairy products to meet local demand.
According to the Ministry of Agriculture and Rural Development, Vietnam raises some 180,000 milch cows that have yielded nearly 400,000 tons of fresh milk in 2013, meeting just 30 percent of local demand.
The supply of fresh milk to dairy firms is even smaller because poor quality. Some 20-50 percent milk provided by local farmers does not meet quality standards of dairy firms, the ministry estimates.
Vietnam is one of 20 biggest milk importers in the world, with annual import volume of 1.2 million tons of milk, mainly condensed milk and cream.
The country is expected to continue importing more dairy products to meet local demand in the coming years. Vietnam's annual milk consumption is forecast to rise to 21 liters per head in 2015, and 27 liters in 2020 from 15 liters in 2010, according to the ministry.
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