On the afternoon of August 6, 2024, at the headquarters of the Ministry of Agriculture and Rural Development, Minister Le Minh Hoan worked with Minister of Industry and Trade Nguyen Hong Dien regarding the proposal to establish a National Rice Council. The meeting was attended by representatives from relevant ministries, industry associations, and rice production and trading enterprises, as well as local authorities.
LEGAL FRAMEWORK FOR THE RICE INDUSTRY: “A TIGHT FIT”
At the meeting, Minister Le Minh Hoan acknowledged the significance of the rice industry in Vietnamese agriculture, as well as in many countries in the region and worldwide. Vietnam has achieved remarkable milestones in rice production and export, especially in 2023, with exports reaching 8.1 million tons, the highest in 16 years. In the first seven months of 2024, rice exports increased by 5.8% in volume compared to the same period last year (reaching 5.18 million tons) and a 25.1% surge in value (reaching $3.27 billion), with an average export price of $632.2/ton.
However, Minister Le Minh Hoan pointed out that the current legal framework for the rice industry is akin to a “tight fit,” revealing several issues that need to be addressed, amended, and supplemented. The existing framework has not created strong enough incentives nor a conducive environment for producers and traders engaged in rice export.
Additionally, the rice industry faces certain limitations, such as a lack of adherence to planning, resulting in localized surpluses that impact producers. Rice farmers’ incomes remain low, and a portion of them continue to face financial challenges.
Amid evolving circumstances, the rice industry confronts several challenges, including climate change, rapidly evolving domestic and global markets, shifting consumption trends, and the depletion of natural resources, particularly water. To pursue multi-value objectives for the rice industry, it is imperative to establish an efficient coordination mechanism between ministries, sectors, and localities in managing overall rice industry activities, in addition to the specialized management of individual ministries.
Concurring with this view, Minister of Industry and Trade Nguyen Hong Dien acknowledged that despite certain achievements, rice exports still face limitations due to fragmented production and outdated technology. Exports remain reliant on traditional markets and have not diversified sufficiently, impacting export efficiency. Enterprises lack autonomy in procuring raw materials and encounter challenges in transactions.
Minister Nguyen Hong Dien emphasized that despite possessing trademarks, enterprises have not utilized them effectively in production and export activities, failing to establish a strong brand identity for Vietnamese rice among foreign consumers.
According to Minister Nguyen Hong Dien, the primary reason for these shortcomings is the absence of a comprehensive strategy or, in other words, a stable and robust development policy. Many export enterprises lack professionalism, engage in unfair competition, or fail to grasp market development and brand consolidation. Insufficient coordination among levels and sectors, along with inadequate inspection, supervision, and handling, have also contributed to the issues.
UPGRADING GOVERNANCE TO THE GOVERNMENT LEVEL AND INTER-MINISTERIAL COORDINATION
During the working session, Mr. Nguyen Anh Son, Director of the Import-Export Department (Ministry of Industry and Trade), shared that the Ministry of Industry and Trade is drafting a report to be submitted to the Prime Minister and the Deputy Prime Minister, along with relevant documents regarding the establishment of the National Rice Council. On August 1, 2024, the Ministry of Industry and Trade issued Document No. 5017/BCT-XNK to relevant ministries, sectors, localities, and associations to gather opinions before reporting to the Prime Minister and the Deputy Prime Minister.
Mr. Son proposed that the Council comprise a Chairman, who would be a Deputy Prime Minister; two Vice Chairmen, namely the Minister of Industry and Trade and the Minister of Agriculture and Rural Development; and members, including leaders from the Ministries of Natural Resources and Environment, Planning and Investment, Finance, Science and Technology, and Foreign Affairs, as well as representatives from some local authorities.
The Council’s responsibilities would include researching and proposing to the Government and the Prime Minister strategies, mechanisms, and policies to create a transparent and efficient legal environment. These policies aim to ensure the stability and development of the market, promote the comprehensive and effective growth of the rice industry, contribute to social security and national food security, and foster production and exports toward sustainability.
“The National Rice Council should consider including import management in its scope. The volume of rice imports is relatively large.”
Mr. Nguyen Ngoc Nam, Chairman of the Vietnam Food Association.
The Council will also be tasked with studying, consulting, and recommending to the Prime Minister directions and solutions to address crucial inter-sectoral issues in formulating and implementing strategies, mechanisms, policies, and programs to propel the development of the rice industry.
Additionally, the National Rice Council will assist the Prime Minister in coordinating between ministries, ministerial-level agencies, government agencies, provincial and municipal People’s Committees, and relevant organizations. It will also help the Government and the Prime Minister coordinate, urge, and inspect the implementation of inter-sectoral strategies, programs, mechanisms, policies, and schemes related to the rice industry.
At the conference, representatives from management agencies, associations, and enterprises offered numerous suggestions and recommendations to help the drafting unit orient the content to closely follow market developments and meet the practical needs of enterprises and producers.
Mr. Tran Cong Thang, Director of the Institute for Policy and Strategy for Agriculture and Rural Development, emphasized the need for a comprehensive strategy in the new context. He underscored the importance of strategic-level consulting to address issues such as market and policy fluctuations in other countries, climate change, shifts in consumer behavior, trade disputes, intellectual property protection, and emerging trends in development.
“It is necessary to have an inter-sectoral mechanism to handle overarching issues, provide consulting, and address significant challenges faced by the rice industry. This mechanism should offer guidance toward the sustainable development of the entire industry. In this setup, the state refrains from deep intervention in the market but ensures its role in orienting and regulating activities, with the involvement of industry associations and public-private cooperation to leverage additional resources from international cooperation and socialization,” Mr. Thang recommended.
Drawing on international experiences, Mr. Tran Cong Thang highlighted that countries with strategic export industries on a national and international scale, such as the palm oil industry in Malaysia, the coffee industry in Brazil, and the rice industry in Thailand, have established “Industry Councils” or “Industry Coordination Boards” at the national level. These bodies foster linkages between government ministries and representatives of various actors in the value chain (from farmers to processors and traders) and across localities. They also provide support in resolving overarching industry issues, offering strategic advice to government leaders.
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