Vietnam not well placed to develop rice brand

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Farmers harvest rice in a Mekong Delta field

Vietnam has not yet developed national trade mark for its rice mainly because the linkages between the farmers and traders are still too weak, Trinh Van Tien of the Institute of Policy and Strategy for Agriculture and Rural Development tells Vietweek.

Vietweek: Vietnam is the world's second biggest rice exporter, but it is yet to develop a trade mark for the produce. Why?

 

Trinh Van Tien: Preparation. Several years ago, I attended a conference on rice marketing in Australia. When Vietnamese delegates at the conference were asked to share their experiences in marketing rice, nobody knew what to say, as we had not done anything. We have only thought about building a trademark for our rice over the last five years. Earlier, nobody thought about it. We were only focused on production plans; for example, to increase it to 15 million or 20 million tons.

Our interest in the rice trademark only emerged when we began to face fierce export competition. Other agricultural export products like coffee and catfish are also in the same situation.

One of the reasons is that we lack the funds to build up a trademark, but it is not the most important one. Even if the state were to pour money to develop a rice trademark for Vietnam, we would not be able to do it because the cooperation between farmers and traders is weak.

Farmers grow whichever variety of rice they think will earn them big profits. They do not consider whether the produce can be exported or not. Farmers have been encouraged to produce high quality rice, but they have not done it. Many of them grow the IR 50404 rice (low quality) because of its high output.

Meanwhile, traders are not interested in farmers' benefit when negotiating export contracts. So the linkage is very weak.

Meanwhile, we can take Australia as an example. The country's rice marketing model is very good. With rice production greatly exceeding local needs, Australia has to market its produce really well to boost exports.

Both farmers and traders are shareholders in Australia's major rice company, SunRice. So we can see that their connection in trademark building and maintenance is very good.

Another reason we have not been able to develop a national rice trademark is that traders mix different kinds of rice purchased from farmers and package them for export. To date, such activities have not yet been controlled.

Another issue with Vietnamese rice is that it is not identified geographically when it is exported, because foreign firms package the rice. Foreign traders can mix Vietnamese rice with grains from other countries, and then show that the rice is from other countries, not Vietnam.

Could we ask foreign traders to give geographic indication of Vietnamese rice on packages?

No, as our rice has not yet registered for trade mark protection abroad. Our traders export the product without any commitments from foreign trade partners, if they could earn profits.

What should we do to build our rice trade mark?

We need a national strategy. It is not something one agency does by itself. For example, the Ministry of Agriculture and Rural Development could be more focused on rice production, while the Ministry of Industry and Trade is only interested in trade promotion. Co-operative linkages among different agencies and industries are still not strong in Vietnam.

Vietnam also implements rice trade promotion programs, but not in a methodical manner. We cannot ask traders to implement the programs without a general direction. These are long term programs that need to be implemented under a national strategy.

To develop our own trademark, we need specific marketing programs. For example, if we want to boost rice shipments to Australia, we need to survey customers' demand in the country to come up with a suitable marketing strategy. We have not yet done it so far.

Don't we also need to develop a good quality, specific kind of rice for export? Are our scientists to blame for this not happening?

No. Scientists cannot be blamed. If we can grow our high-quality rice for export, it would be a success. We should not expect some special kind of rice that will be loved by consumers the world over. In the coming years, we should ensure that our high-quality rice is recognized by international consumers through better marketing and building a national brand.

While we have asked farmers to grow some varieties of high quality rice for export, they have not done it because they cannot see immediate benefits. We can only deal with this issue when farmers can be assured of stable sales.

Should we call for foreign firms to invest in rice production and export?

Under our WTO commitments, local and foreign firms should see the same opportunities when participating in the market. However, foreign firms are not keen on investing because the added value of rice is lower than that of other commodities in international trade.

They will participate if they can see channels that bring in high added value.

For example, a Japanese firm enters into a joint venture with Agrimex, a rice trader in An Giang Province, for rice cultivation.
They use Japanese rice varieties and technology, and outsource cultivation to local farmers. Thus, the rice grown in Vietnam has high quality, and it can fetch them big profits when it is sold in Japan.

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