Quyết định 942/QD-TTg

DECISION

APPROVAL FOR RICE EXPORT MARKET DEVELOPMENT STRATEGY OF VIETNAM FOR THE PERIOD OF 2017-2020 WITH VISION TOWARDS 2030

PRIME MINISTER

Pursuant to the Law on Government Organization dated on June 19, 2015;

Pursuant to Decision No.2471/QD-TTg dated December 28, 2011 of the Prime Minister on approval for the import strategy in the period of 2011-2020 with vision to 2030;

Pursuant to Decision No.899/QD-TTg dated June 10, 2013 of the Prime Minister on approval for the Program for restructuring of the agriculture industry with a view to improvement of the added value and sustainable development

Pursuant to Decision No.706/QD-TTg dated May 21, 2015 of the Prime Minister on approval for the Program for developing Vietnamese rice brand by 2020 with vision to 2030;

Considering the request of the Minister of Industry and Trade in the Statement No. 4343/TTr -BCT dated May 18, 2017,

HEREBY DECIDES:

Article 1. Approve the rice export market development Strategy of Vietnam in the period of 2017-2020 with vision to 2030 (hereinafter referred to as Strategy) with major contents as follows:

I. VIEWPOINTS OF THE STRATEGY

1. 1. Develop the rice export market in pursuit of improving the efficiency, fostering the export of rice, contributing to the inclusive consumption of commercial rice at the price beneficial to farmers, increasing their income, assuring social well-being and food security and protecting ecological environment.

2. Develop the rice export market in pursuit of orientating the planning and organization of domestic production of commercial rice towards assurance of quality and food safety, conformity to the consumer demands and tastes and compliance with market requirements and regulations.

3. Develop the rice export market together with increasing the competitive capacity, building the brand of exported rice and of Vietnamese rice exporters; strengthen business affiliation/partnership in a value chain between the production stage and the consumption or export stage.

4. Develop the rice export market with the aim of diversifying markets, reducing dependence on certain markets adapt to the trend in international economic integration and international cooperation in investment of rice production, processing and export; opportunities, potentials and advantages from international free trade agreements and arrangements to which Vietnam is a signatory.

5. Develop the rice export market in pursuit of actualizing and implementing the Strategy for commodity import and export in the period of 2011-2020 with vision to 2030; the Strategy for international economic integration of the agriculture and rural development sector by 2030; the Program for regional market development in the period of 2015-2020 with vision to 2030; the Program for reorganization of the agriculture industry oriented towards an increase in the added value and sustainable development; the Program for reorganization of the Vietnamese rice industry by 2020 with vision to 2030; the Program for development of the Vietnamese rice brand by 2020 with vision to 2030.

II. OBJECTIVES

1. Overall objectives

Develop rice export markets with reasonable, stable, sustainable and effective scale and/or market and exported product structure; maintain traditional, major export markets and find new and potential export markets; strengthen the connection between production and market in a value chain, assure the exported rice quality in the production stage and promote in-depth participation in the global rice value chain; pave the way for Vietnamese rice products to enter direct distribution channels in the market; increase the value and guarantee export efficiency; endorse the prestige and brand of Vietnamese rice in the market, promote export as a way to contributing to the inclusive consumption of commercial rice at the price beneficial to farmers and help to achieve objectives and comply with rules of rice export operation.

2. Particular objectives

a) Gradually decrease the export volume of commercial rice for export, yet stabilize and increase the export value of rice

- In the period of 2017-2020, the annual export of rice is expected to reach 4.5 - 5 million tonnes by 2020 with an average value of USD 2.2 – 2.3 billion per year.

- In the period of 2021 - 2030, the annual export of rice is expected to reach 4 million tonnes by 2030 and the export value of rice remains stable and rises to USD 2.3 – 2.5 billion per year.

b) Transform the export structure

- It is expected that, by 2020, the proportion of low- and average- quality white rice is restricted to 20% of total rice export and accounts for about 25% with respect to high-quality white rice ; the proportion of export of aromatic rice, specialty rice and japonica rice represents about 30%, about 20% for glutinous rice and about 5% for high value-added rice products such as nutritious rice, parboiled rice, organic rice, rice flour, products made from rice, rice bran and other rice by-products. 0}

- It is expected that, by 2030, the proportion of export of ordinary white rice only accounts for 25% including low- and average-quality rice making up not more than 10% of total rice export, roughly 40% for aromatic rice, specialty rice and japonica rice and about 25% for glutinous rice ; the proportion of export of high value-added rice products such as rice fortified with micronutrients, parboiled rice, organic rice, rice flour, products made from rice, rice bran and other rice by-products gradually increases by over 10%.

c) Increase the direct export rate of Vietnamese branded rice

- Increase the rate of rice directly exported to markets and rice distribution systems of countries; reasonably and effectively exploit export mediator channels, especially in the markets where shipping, handling, storage and payment conditions are not favourable.

- Reach the objectives of directly-exported Vietnamese branded rice which was brought out in on the Program for development of Vietnamese branded rice by 2020 with vision towards 2030.

d) Adjust the market structure to the objectives of transforming the export market structure and the trend of change in the global rice market.

- It is estimated that, by 2020, the export of rice in the Asian market will account for 60% of total export turnover, 22% in the African market, 2% in the Middle-Eastern market, 5% in the European market 8% in the American market and 3% in the Oceanian market.

- It is expected that, by 2030, the export of rice in the Asian market will account for 50% of total export turnover, 25% in the African market, 5% in the Middle-Eastern market, 6% in the European market, 10% in the American market and 4% in the Oceanian market.

III. ORIENTATION OF EXPORT MARKET DEVELOPMENT

1. General orientation

a) Shift the export market structure with the aim of ensuring sustainability, effectively exploiting the import demands for common rice of key and traditional markets, simultaneously aiming at developing markets having the demands for import of high-quality and high-value rice and products made from grain or rice, and those with which Vietnam has established a sustainable investment and commercial partnership. .

b) Make use of competitive advantages in order to strengthen position and effectively exploit near, traditional and key markets having demands for import of rice according to current production conditions; develop new and potential markets as well as increase the rate of high- quality and value added rice import market; step by step decrease the proportion of rice exported to markets importing low-quality or low value-added rice and having low and unstable efficiency.

Take best advantages of appropriate niches of market in all market areas.

2. Orientation of development of particular markets

a) Asian Market

- Southeast Asian market: Strengthen and maintain the share of medium-quality rice in key markets (e.g. the Philippines, Indonesia and Malaysia) Promote export of high-quality white rice, aromatic rice and glutinous rice.

- Chinese market: Stably, sustainably and effectively tighten the commercial relationship in rice; place high-quality and branded and valued rice products in official and direct distribution channels. Strengthen and maintain market share of Vietnamese rice in rice import structure of China at high level.

- North East Asian market:

+ Improve high-quality rice products promotion and closely cooperate with countries in order to increase the capacity of winning the contract for imports among countries as well as pay attention to long-grain brown rice.

+ Gradually transform the ordinary partnership in trading rice into the partnership in attracting investment and transferring technologies from Korea and Japan to be used in the rice cultivating and processing sector for re-export of rice to these markets; boost the production and export of rice products to these markets.

+ Strive to increase the market share of Vietnamese rice in comparison with total rice import turnover of Korea and Japan from less than 2% in 2015 to about 3% in 2020 and 4 – 5% by 2030.

b) African and Middle Eastern markets:

- Improve the cooperation in trading rice with countries and concentrate on negotiating and signing Memos and agreements in terms of rice trading with countries having high demands for import of rice.

- Strengthen the market share of types of separate long-grain white rice, hard rice, parboiled rice and aromatic rice by enhancing the competitive capacity in terms of price, quality, payment and trading conditions in African countries.

- Exploit and make use of potentials and advantages of Iranian and Iraqi markets. Encourage and assist domestic enterprises in researching markets, seeking business opportunities and establishing a connection with major rice importers in these markets.

- Exploit channels of export of high-quality white rice to markets to Saudi Arabia and of the United Arab Emirates. Strive to increase the share of Vietnamese rice in comparison to total rice imports in these markets from less than 2% in 2015 to 3% in 2020 which is expected to reach 5% by 2030.

- Strive to increase the market share of Vietnamese rice in comparison to total rice imports of South African market from less than 4% in 2015 to 5 - 6% in 2020 and maintain such percentage by 2030; stably maintain the market share in the Ghana and Ivory Coast markets.

c) European Market

- Improve the export of high-quality white rice, make use of market niches of short-grain rice, organic rice, parboiled rice, rice fortified with micronutrients and specialty rice of which Vietnam has advantage in production and export.

- Make the most of opportunities from free trade agreements so as to increase the market share; exploit market potentials of Vietnamese, European community, restaurants and supermarkets in pursuit of encouraging and stimulating the rice consumption demands in Vietnam.

- - Strive to increase the market share of Vietnamese rice in comparison with total rice import turnover of Eurasian Economic Union: The Russian Federation market share rises from 17% in 2015 to 19% by 2020 and is expected to increase to 20% by 2030 while the Belarusian market share remains stable at the percentage of 13 – 14%.

- - Strive to increase the market share in some European countries (e.g. France, Germany and the Czech Republic) from less than 2% in 2015 to 4% by 2020 which is expected to reach 6% by 2030.

d) American and Oceanian markets

- Concentrate on segments of high-quality rice. Increase trade promotion and exploit market opportunities of Latin American countries.

- Strive to increase market share in American market from about 3.7% in 2015 to 5% by 2020 which is expected to reach 6 - 7% by 2030.

- Strive to increase the share of the Mexican market from less than 1% in 2015 to 3% in 2020 and reaches 5 - 6% by 2030 and that in Haitian market from about 7% in 2015 to 9% by 2020 which is expected to reach 11- 12% by 2030.

- Strive to increase market share in Australian market from 3,6% in 2015 to 4% by 2020 which is expected to reach 5 - 6% by 2030.

3. 3. Orientation of production and processing of exported rice products in pursuit of satisfying objectives and orientating development of rice export market.

a) Increase the proportion of export of high-quality long-grain white rice (5-10% broken) and decrease that of rice over 15% broken; improve the proportion of export of aromatic rice, parboiled rice, japonica rice, rice undergoing the green manufacturing process, organic rice and rice fortified with micronutrients as well as diversify products processed from paddy rice, grain, rice flour and cosmetics made from rice.

b) Plan and concentrate on investing in development of areas providing input materials for producing commercial rice supplied to particular markets and market segments, especially creating areas for monocropping of high-quality and high value-added grain for commercial purposes in key areas manufacturing commercial rice in Mekong Delta.

c) Organize production activities which conform to standard procedures, ensure consistency in the process of seeding, cropping, harvest, processing, storage and packaging to meet market demands; assure that rice products conform to quality standards, meet food safety requirements satisfy needs and tastes of domestic and foreign consumers as well as comply with markets’ technical barriers.

d) Claim the prestige and brand of Vietnamese rice in domestic markets which lays the foundation for product promotion and the enhancement of Vietnamese rice brand and prestige in global market.

IV. MISSIONS AND SOLUTIONS

1. Organization of production activities, post-harvest, processing and preserving technologies and the building of Vietnamese rice brand in the market

a) Reorganize area of arable land, cropping seasons, productivity and output of commercial rice in order to gradually decrease the output of exported rice to 4.5 – 5 million tonnes by 2020 and to 4 million tonnes by 2030; convert less effective cultivating land to the land intended for aquacultural production, cultivation of other plants or the one intended for both growing of other crops and aquacultural production in pursuit of achieving higher economic efficiency.

b) Aim at adopting solutions to building the brand of Vietnamese rice, restructuring grain production, reorganizing production and improving the post harvest and processing technology which were specified in the Program for development of Vietnamese rice brand by 2020 with vision to 2030 and the Program for restructuring of Vietnamese rice industry to 2020 with vision to 2030;

c) Develop incentive and encouragement policies for researches in selection and breeding of high-productive and high-quality rice varieties to meet market demands. Focus on developing rice varieties which produce high-quality white rice, aromatic rice, rounded-grain rice, glutinous rice and some specialty rice as well as eliminate the cultivation of low-quality and unproductive grain seeds.

d) Promote linkage between the production stage and the processing and consumption stage in a value chain; diversify rice products. Plan and organize production activities specific to areas of materials and areas of monocropping of commercial rice for export to particular markets, together with the affiliation, joint venture and placement of purchase orders amongst enterprises.

d) Employ advanced and high technologies in production, deep processing and storage of rice in pursuit of reducing post-harvest losses.

e) Boost inspection and control of production, trading and use of seeds, fertilizers and pesticides in rice production and guarantee food safety as well as satisfy market demands.

g) Invest in building internationally-accredited rice quality inspection facilities in Mekong Delta in order to facilitate rice quality inspections and contribute to raising rice quality to meet international quality standards.

h) Assist in registering protection of intellectual property for national Vietnamese rice brands in the form of domestically- or internationally-certified trademarks.

2. 2. Enhancement of investment and international cooperation with countries and territories for export market expansion purposes

a) Promote international cooperation in production and processing of rice; reinforce cooperation and connection to exchange information and create relationship with partners in human resources training, transfer of know-how and technologies in production, processing and storage of rice in pursuit of enhancing the quality of rice products to meet market demands.

b) Develop and tighten cooperation in trading rice through both Governmental and corporate channels. Promote mechanisms for cooperation with enormous rice distribution systems in key and potential markets.

c) Cooperate in investment in production of rice in countries which have demands and potentials as well as advantages in rice production.

3. 3. Development of export markets

a) Develop plans and solutions to developing each particular market in the way of linking market development activities with production, processing, product promotion and brand building activities.

b) Build a market information system, effectively deal with fluctuation of the market, be active to find solutions to responding to protectionism policies in any form, tariff and non-tariff barriers of markets imposed on rice and grain products.

c) Stimulate bilateral and multilateral negotiations in pursuit of reaching agreements on market opening for rice products. Make good use of market opening opportunities of foreign countries and roadmap to tariff deduction in order to promote export and enhance efficiency in the rice export.

d) Review and negotiate for signing agreements of conformity and mutual recognition on quarantine, product quality, and food safety standards with markets that facilitate Vietnamese rice export and lay the basis for orientating production and export.

d) Devise and effectively execute rice promotion programs in accordance with particular systems. Allocate appropriate and adequate funding for annual rice trade promotions, especially in traditional, key, new and potential markets.

e) Develop systems for direct distribution of Vietnamese rice products in foreign markets; conduct research on installation of overseas bonded warehouses for rice export activities. Develop methods of export depending on particular features of the markets, especially potential and key ones.

4. 4. Complete building of regulatory and institutional framework

a) Continue to review and complete the system of rice export operation and manage rice trading and export of merchants to address current market changes and enable them to participate in the rice export and involve deeply in the global rice value chain. Formulate incentive policies encouraging rice exporters to establish input material areas and form the linked chain of production, processing and distribution of products.

b) Develop rice farming households in form of professional and sustainable production and/or promote the accumulation of land and strengthen the connection between grain producers and merchants exporting rice. Review and amend Decision No.62/2013/QD-TTg dated October 25, 2013 of the Prime Minister on incentive policies for the strengthened cooperation and link between agricultural production and consumption and building of large-scale paddy fields to adapt to the reality.

c) Design a particular roadmap in order to moderately increase the requirement of technique, machine line production, equipment and improve preservation and processing technology in grain and rice store and/or in exported rice milling and processing factories in pursuit of gradually enhancing the exported rice quality to satisfy requirements concerning competition in terms of rice quality and brand. Review and amend Decision No.68/2013/QD-TTg dated November 14, 2013 of the Prime Minister on support policies for mitigation of agricultural losses to adapt to the reality.

d) Conduct a research on the establishment of trading Centres, major facilities used for trading and promoting rice products in Mekong Delta in order not only to balance and regulate price as well as stabilize the market but also to play the central role in launching, building rice brands and trading rice with foreign partners.

đ) Establish a set of national standards applied to exported rice products and the standard production and processing line from the seeding stage to the stage of production of finished products for the purpose of producing goods complying with the standard of Vietnamese rice brand.

e) Completely establish incentive policies assisting enterprises and farmers in applying technological and scientific advances to production, harvest, processing and storage of rice and development of high value-added products.

g) Completely develop and implement preferential policies for enterprises investing in production of high technology rice, green rice, organic rice, nutritious rice and specialty rice and processing of rice byproducts in accordance with international practices and regulations of WTO.

h) Review and put forward appropriate policies and solutions so as to manage and regulate rice export activities and protect the rice production industry and domestic rice farmers in the free trade context and encourage Vietnamese rice exporting merchants to develop their local markets.

i) Innovate and complete the organization and raise the efficiency of Vietnamese Food Association’s activities in pursuit of satisfying the demands for mission in the new context in the way of complying with market mechanisms and promoting the role in gathering and supporting merchants and strengthened and effective cooperation and affiliation between factors existing in the value chain.

5. 5. Improvement of competency of rice exporting merchants

a) Guide and assist rice exporting merchants in applying food safety and quality management models in production activities; increase the capacity of market research, international marketing and contract negotiation, signing and execution as well as international commercial dispute settlement.

b) Formulate and complete the support policies granted to rice exporting merchants to enable them to participate in PPP projects and the global rice value chain by supplying high-value added Vietnamese branded rice products and launching national branded rice products to distribution systems of other countries.

c) Provide orientation and assistance for enterprises in designing their strategy for commodities and rice export markets; uphold networks of trading partners and appoint their representatives in foreign countries.

d) Encourage rice exporting merchants to concentrate on the development of domestic market which contribute to the diversification of consumption channels and control of market risks as well as create a counterbalance to the partners in negotiating export contracts.

d) Promote equitization of state enterprises operating in the rice export sector, focus on professional and intensive investment and production, develop the competitive capacity and focus on development of commercial markets and avoid being dependent on centralized contracts.

6. 6. In terms of infrastructure and/or logistics and payment

a) Invest in reforming and completing water, land and rail transport systems; plan and develop seaport and inland port systems used for shipping and direct export of commercial rice and grain in Mekong Delta.

b) Diversify all types of logistics service and apply modern engineering and managerial technologies in order to reduce the laytime and loading and discharging costs. Encourage private-sector involvements in investment in development of logistics technical infrastructure for rice export.

c) Assist rice exporting merchants in performing payment transactions with banks and the exchange of payment currencies in importing countries facing difficulty in payment; diversify currencies of payment and prevent the exchange rate risks.

V. IMPLEMENTAION

1. 1. Relevant Ministries and authorities shall shoulder the responsibility to organize and undertake particular missions assigned in the Appendix to this Decision; prepare the Action Plan for implementation of the Strategy and determine specific missions, solutions, time limit for completion and resources required for implementation of this strategy. 2. 2. Relevant Ministries, ministerial agencies, Governmental agencies, People’s Committee of provinces and centrally-affiliated cities, agencies and organizations shall take responsibility to cooperate with the Ministry of Industry and Trade in organizing the strategy implementation and periodically send reports on progress of implementation of relevant missions and related solutions to the Ministry of Industry and Trade for its consolidation of these reports by December 15 each year.

3. The Ministry of Industry and Trade shall preside over and collaborate with relevant Ministries, authorities, local authorities, agencies and organizations in order to examine and evaluate implementation of the Strategy and prepare a consolidated report for submission to the Prime Minister.

Article 2. This decision comes into force from the signature day.

Article 3. Ministers, Heads of ministerial agencies, Heads of Governmental agencies, Chairpersons of People's Committee of centrally-affiliated cities and provinces, Vietnam Food Association, rice exporting merchants, organization and individuals concerned shall has responsibility to implement this Decision./.

APPENDIX

CHART OF TASKS IN IMPLEMENTING THE STRATEGY FOR VIETNAMESE RICE EXPORT DEVELOPMENT IN THE PERIOD OF 2017-2020 WITH VISION TOWARDS 2030
(Issued together with Decision No.942/QD-TTg dated July 03, 2017 of the Prime Minister)