Vietnam’s bovine industry has a substantial potential for development thanks to high consumer demand for meat and milk, favourable natural conditions, abundant labour force and effective practices.
Bovines are raised across the country. Rearing bovines for meat and as draught animals has existed in the country for a long time. Dairy cow husbandry appeared in Vietnam in the 20th century and it has quickly become an important economic sector. Traditional cow husbandry has comparative advantages to other livestock sectors due to the ease of raising cattle, abundance of labour force, availability of horticultural products, and pastures. Thus, bovine rearing is encouraged for development and becomes livelihoods for millions of people in Vietnam.
For Vietnamese people, bovine animals are friendly and they are closely linked with farmers for many reasons. As Vietnamese people are very keen on beef and they tend to use more beef every day. (According to statistics, Vietnam’s beef demand per capita was 50 kilograms in 2014, an increase of 2.1 times over 2000. Beef consumption accounts for only 6.3 per cent of total meat consumption, compared with 20 per cent in the world. Structurally, Vietnam’s beef consumption is still low to the world).
The domestic beef and dairy supply is short of consumer demand on declining cow herds. Currently, herds tend to rise slightly again, reaching 5,234,300 heads in 2014, 1.5 per cent higher than that of a year earlier. Beef output amounted to 292,900 tonnes in 2014, 2.63 per cent higher than that in 2013. According to data from the General Statistics Office released on October 1, 2015, the domestic cow herd reached 5.4 million heads, up 2 per cent from 2014. Due to rising beef demand, Vietnam imported 248,000 beef cows in 2014 and more than 250,000 cows in 2015, excluding buffaloes and other beef products. Vietnam’s beef production in 2014 was 370,000-393,000 tonnes, falling short of 15,000 – 40,000 tonnes to the domestic demand.
According to the General Statistics Office, Vietnam had 227,625 dairy cows in 2014 and 275,300 in 2015, representing a year-on-year growth of 21 per cent. The average cow herd expansion reached 22 per cent annually in the 2001- 2014 phase. Fresh milk output was 549,533 tonnes in 2014, an increase of 20.41 per cent against 2013, meeting 28.3 per cent of domestic needs for production and consumption, according to Department of Livestock Production – Ministry of Agriculture and Rural Development. Currently, Vietnam’s milk consumption per capita is 15 litres a year, a relatively low rate in the world (Thailand: 34 litres/year; Singapore: 45 litres; India: 46 litres; UK: 112 litres). Vietnam has to import US$1.1 billion worth of dairy products in 2015. The import growth is estimated at 15 per cent a year. Vietnam is a Top 20 milk importer in the world (New Zealand: 25 per cent; US: 19 per cent; the Netherlands: 7 per cent; Germany: 4 per cent, and France: 3 per cent).
In 2015 – 2025, the milk production output is expected to rise 10-15 a year on average, resulting in short supply over the next 10 years. The dairy market size expanded 21 cent a year on average in 2010-2015.
After 30 years of renovation, the bovine industry has changed dramatically and is seeing a new era of development and a profound impact by such factors as:
First: Socialist-oriented market economy regime has exerted positive impacts on the cattle industry structure, reflected by changes in livestock structure, market-based production, production chain-led investment and production, diverse rearing methods, positive allocation of resources, and stronger production scale size and capacity. Nevertheless, this sector has also met with intertwined difficulties and problems like low productivity and product quality, low labour productivity, fragmented small-scaled production (accounting for over 70 per cent), foreign-dependent livestock breeding and feed production, shrinking domestic market share, irrational land planning and accumulation for livestock husbandry, limited credit and investment for livestock production.
Second: Climate change has strongly impacted the industry, resulting in new requirements for technology and infrastructure investments to adapt and mitigate effects of rising temperatures, natural disasters, floods, desertification, extreme weather and diseases.
Third: The sector has been affected strongly, deeply and comprehensively in both positive and negative aspects, opportunities and challenges of globalisation like tariffs, investment redirections, competition in consumption and product standards, quarantine and other provisions of new-generation FTAs that Vietnam has negotiated, signed and executed. The livestock sector in general and the cow industry in particular are most vulnerable, particularly when Vietnam executes new-generation FTAs and TPP agreements if it fails to grasp opportunities, turn challenges into opportunities and minimise negative impacts.
To develop the cow industry and turn it into a backbone industry in the new era, Vietnam needs to apply synchronous scientific and technological solutions to production organisation, market development and production regulation, while economic actors quickly adapt to new situations and some institutional and policy solutions as follows:
1- Creative with complete institutions and policies for new context
– Developing, supplementing and completing laws: Building general law and specific laws on agriculture and animal husbandry; agricultural development-related laws, laws on sector and actor development encouragement (businesses, cooperatives, farms and households) in accordance with international practices and the practical situation.
– Perfecting, amending and supplementing mechanisms and policies in line with practice, timely eradicating obstacles to effectively implement policies, e.g. husbandry investment support and encouragement policies and agricultural zone establishment encouragement policies, and husbandry industrial zones with soft and hard infrastructure; encouraging livestock production models in line with global chain links; providing preferential credit supports for meat and dairy production for domestic consumption; drastically fighting against cross-border livestock product smuggling; accumulating lands for easier livestock infrastructure development, pasture and crop development, and feeding materials for cattle.
– Developing consistent policies for general and specific production methods to promote advantages for every actor. The Government needs to have common livestock development policies, industrial livestock husbandry development policies, high-tech husbandry together with household/farm livestock development policies to create unique products, grasping and promoting local advantages and labourers across the nation; encouraging the connectivity of animal husbandry chains and reducing production and administrative costs.
2- Policies on capacity building, State management improvement, sector administration, economic actor management; development of production organisations; promotion of sector association roles
– Necessarily planning cattle farming zones, effectively managing plans; zoning livestock farming and crop cultivation land for feed production; expanding production areas and encouraging crop cultivation for animal husbandry development.
– Studying production application and regulating quota-based production based on market signs for better management and planning orientation.
– Studying, hybridising, conserving cow breeds with high productivity, quality, adaptability and disease-resistant traits; importing good strains to enhance value and productivity; developing modern animal feed production industry; lowering costs and reducing foreign dependence.
– Enhancing veterinary capacity to better disease control, transportation management and slaughter control; building technical regulations and standards on veterinary hygiene and food safety to meet international integration requirements, negotiating quarantine conditions to facilitate exports and restrict imports.
– Raising associations’ positions and roles in the sector; lifting the capacity and position of businesses and stakeholders in the economy.
– Amending, supplementing and perfecting mechanisms and policies to encourage research, application and transfer of science and technology with the aim of bringing many scientific and technological products in the country and the world to cow farming chains, especially advanced, biological and environment-friendly technologies.
3- International integration acceleration policies: Actively integrating and strengthening international cooperation to utilise external resources like capital, technology, management and marketing; facilitating foreign direct investment into high-tech livestock production, processing and marketing.
4- New approaches in issuing policies: Changing policy-making methodology: In the spirit of serving livelihoods, economic actor community and society, all stakeholders should be added to policy-making process and issued policies must be consistent, practical and compliant with international laws.
Nguyen Van Ton
Central Economic Committee
Central Economic Committee