Agricultural logistics costs in Vietnam are 300% higher than Singapore

This is the number given at the scientific conference on orientations to perfect and improve the efficiency of the logistics service supply system in the agricultural value chain organized by the Institute of Policy and Strategy for Agricultural and Rural Development ( Ministry of Agriculture and Rural Development) held on the morning of November 2, in Hanoi. High logistics costs reduce the competitiveness of Vietnamese agricultural products Speaking at the opening of the conference, Dr. Nguyen Anh Phong - Deputy Director of the Institute of Policy and Strategy for Agricultural and Rural Development said that the logistics industry plays an increasingly important role in the entire process of social activities. , especially in the production, circulation and distribution of products and services. Logistics services serving agricultural product production and trading are a large service sub-sector in the logistics supply chain. In recent times, logistics services in general and logistics serving agricultural production and business in Vietnam in particular have had important developments. Infrastructure, logistics services, and suppliers have continuously developed and grown, providing good support for the supply of inputs to ensure production, for the production and trade of agricultural products. However, logistics services in general and agricultural logistics still have many limitations. The shortcomings of the logistics system significantly affect the efficiency of the agricultural supply chain. The rate of wastage and loss in the agricultural product chain is high from 25 - 30%, of which seafood is 35%, vegetables and fruits can be up to 45%. Logistics costs account for 12% of the cost of seafood products, 23% of the price of wooden furniture, 29% of the price of vegetables and fruits, and 30% of the price of rice. "Agricultural logistics costs in Vietnam are 6% higher than Thailand, 12% higher than Malaysia and 300% higher than Singapore. Overall, Vietnam's logistics costs account for more than 20% of GDP; meanwhile, the cost The average logistics cost in the world is only about 11% of GDP," Dr. Nguyen Anh Phong emphasized. Explaining this, according to Ms. Ta Thu Trang - Head of Trade and Investment Consulting Department - Center for Information on Agricultural and Rural Development - Institute of Policy and Strategy for Agricultural and Rural Development, Transport Infrastructure has not developed proportionately and is imbalanced in terms of transport volume. Services that bring added value such as plant inspection processing are lacking and weak. The cold supply chain is limited and does not meet export demand. There is no full-service logistics information system to support production and satellites connecting raw material areas to larger centers; The border trade logistics system has not yet developed according to its potential and practical needs, and there is no bonded warehouse. Enterprises providing agricultural logistics are still small and unevenly distributed across regions. Although, the laws regulating logistics activities in Vietnam are currently relatively complete. Policies and regulations have been issued to create a legal corridor and an open and healthy business environment to promote sustainable development of logistics activities. Vietnam is increasingly interested in forming logistics centers/agricultural hubs and agricultural product collection centers. However, there is no integrated overall strategy and project for agricultural logistics development, nor is there a long-term vision strategy and planning for agricultural logistics development. Support policies for logistics development to serve agricultural production and business areas are lacking, with no priorities for investors in logistics services. The policy for developing agricultural product linkage centers and agricultural focal centers is only in the pilot phase or the proposed construction has no guidance. Develop a logistics development project associated with agricultural production and business areas In the context of the agricultural sector, it will have to shift from thinking about agricultural production to thinking about doing agricultural economics; Focus on improving value, efficiency, and diversifying the value chain in accordance with market requirements. At the same time, shift from single-sector development to multi-sector integration, from "single value" to "multi-value integration". The logistics system serving agricultural production and trading has become more important than ever. Developing an agricultural logistics service system to build sustainable agricultural supply chains, improving the quality, value, competitiveness and reputation of Vietnamese agricultural products in domestic and international markets, currently The Institute of Policy and Strategy for Agricultural and Rural Development (Ministry of Agriculture and Rural Development) is developing a draft logistics development project associated with agricultural production and business areas of the country in the period 2023 - 2030. . Dr. Nguyen Anh Phong said that the draft project sets the goal of reducing post-harvest losses by an average of 0.5 - 1% per year and agricultural logistics costs by 30% when distributed through the service center system. agricultural logistics. Ensuring that 100% of agricultural products through the agricultural logistics center system are traceable and ensure quality and food safety. In raw material production areas, there are agricultural logistics service centers, 70% of cooperatives, traders, and businesses use logistics services and 100% of cooperatives, traders, and businesses are trained. Training to improve skills related to agricultural logistics services. Basically form a system of agricultural logistics service centers in key production and business areas and a number of key agricultural product supply chains to the international market. The draft Project also provides tasks such as: Building and forming an agricultural logistics service system in key areas; Build and upgrade infrastructure of agricultural logistics service centers and transportation infrastructure connecting centers;... Promote the application of information technology and electronic connection in the system of agricultural logistics service centers. Promote trade promotion and international cooperation. Training human resources for the agricultural logistics system. Effectively deploy mechanisms and policies to serve the agricultural logistics system. Proposing solutions and policies to promote the development of logistics service systems in agriculture, Ms. Dinh Thi Bao Linh - Deputy Director of the Center for Industry and Trade Information (Ministry of Industry and Trade) said that experience and International trends show that the Government has a huge role to play in helping solve logistics challenges in the country's agricultural sector. Therefore, it is necessary to have policies to encourage the development of logistics in agriculture in a sustainable way and make the best use of comparative advantages. “Although there have been some initiatives and participation of the private sector in the field of agricultural logistics, it is still not commensurate with the potential. The government should consider developing PPP models to accelerate investment in logistics infrastructure in agriculture in the near future. In addition, it is necessary to encourage the private sector to participate in this industry through more practical incentives on taxes, fees, access to capital and international cooperation on market development and technology application", Ms. Dinh Thi Bao Linh recommended. Nguyen Hanh