Supply chain innovation required for agriculture growth

Vietnam needs to renovate supply chain to help its agriculture sector improve the competitive edge and grow effectively, experts said.

Agricultural firms should use blockchain technology to cut costs.

The country currently has about 700 safe agricultural product value chains, but only half of them seem to operate effectively.

According to Nguyen Duc Thanh, Director of the Vietnam Institute for Economic and Policy Research (VEPR), certain limitations persist within the agricultural value chain from input, production, post-harvest processing, to end consumption or export purposes.

Thanh recommended applying modern science and technology innovations to the current supply chain, though he was uncertain how to best implement such an approach for the benefit of farmers, distributors and buyers alike.

He also alluded to the recent rise of ‘Agriculture 4.0’, understood as intelligent production based on breakthrough technological achievements such as motion sensors, agricultural robots, or the application of blockchain technology in product traceability.

Vu Truong Ca, Co-founder of the LINA Network, suggested that firms should use blockchain technology to maximize the transparency of information about agricultural products.

“Using the technology in the supply chain, customers can update the information of products anytime and anywhere. Costs for using blockchain to track products’ origin will be sharply cut down, even up to zero dong because they do not depend on the number of users,” said Ca

Applying technologies in tracking the origin of products is considered a need to boost customers’ trust in local farm produce.

“That customers do not know clearly about the origin of the products they buy may lead to the fact that some products have good quality but slowly being consumed,” Dr Dao The Anh, Vice Director of the Vietnam Academy of Agricultural Sciences.

 In the light of the development of the 4.0 scientific and technological revolution in the management of agricultural supply chains, the application of advanced technologies in tracking the origin of products is necessary to gain customers’ confidence as well as helping maximize benefits to be gained by farmers and enterprises.

However, the application of these advanced technologies in tracking the origin of products remains tough for farmers and enterprises, said VEPR’s Thanh.

 Some enterprises have paid attention to applying technologies in tracking products’ origin but most of them are old and costly if they are used on a large scale.

 “Products with clear origins have higher prices as compared with those with unclear origins,” Thanh clarified.

 The Vietnamese agricultural sector is still in first steps in technological application to improve transparency of information about its products.

 “We got unclear understanding of value chains. While transparency in information of products is required, the application of advanced technologies in value chains has yet gained much development”.

 “As the tracking of products’ origin is clear, producers can survive and products’ values can be increased. As a result, value chains will be developed and customers’ benefits will be higher,” he added.

 However, the application of those technologies upon the whole sector may face some barriers, such as institutions and production restructuring, Thanh said.

Deputy Director General of the Cultivation Department under the Ministry of Agriculture and Rural Development Tran Xuan Dinh said that Vietnamese agricultural exports often face technical barriers, especially when exporting to developed countries.

Dinh admitted that though there have been many State policies related to the issue, they are rather inadequate and unreasonable when put into practice.

In order for Vietnamese farmers to sustainably develop agricultural value chains, he strongly advised the promotion of linkage between rural agricultural cooperatives and distributors, as well as public-private partnerships in infrastructure investment.

The State should also implement supporting policies for enterprises, such as low-interest loans, while planning large-scale agricultural production areas in a concentrated and modern manner.