Until now, Vietnam Organic Agricultural Products have been exported to 180 countries and regions in the world, yet they only occupy a small market share. To fully make use of those emerging opportunities that lie ahead, many solutions need to be done simultaneously in order to help organic agricultural products become better to satisfy strict requirements from the head markets such as the US, and EU.
Exportation of over 300 million USD/ year
According to the Ministry of Agriculture and Rural Development, the Global Organic Agricultural Product market only got 18 billion USD in the year 2000. Still, it has risen strongly to 188 billion USD in 2021 and is estimated to achieve 208 billion USD in 2022. North America and Europe account for 90% of the market share. However, this market is slowly becoming vital in countries like China, North Korea, India, Thailand, etc.
For Vietnam, Mr. Nguyễn Quốc Toản, Director of the Department of Agricultural Product Processing and Market Development (MARD), shared that organic agricultural products are now exported to 180 countries and territories with an annual value of $335 million. The number of organic agricultural producers exceeds 17,000 units, with 555 processors and 60 exporters. “These numbers are still very modest,” Mr. Toản noted.
Deep dive more in the journey of promoting organic agricultural exports, Mr. Phạm Minh Đức, Vice President of the Vietnam Organic Agriculture Association, stated that between 2000 and 2010, Vietnamese businesses were silently producing organic products for European companies, mainly purchasing goods for repackaging. Since 2018, after the introduction of Decree 109/2018/NĐ-CP on organic agriculture, Vietnamese businesses have begun to take control. In this period, large corporations like Vinamilk and TH Group started shifting some of their products to organic. “The reputation of organic products from Vietnam in the global market has gradually increased. From 2018 to 2022, 164 companies with 200 products received USDA organic certification from the U.S.,” added Mr. Đức.
According to Ms. Vũ Kim Hạnh, President of the High-Quality Vietnamese Goods Business Association, Vietnam’s organic agricultural products are mainly exported to the EU market. European consumers are increasingly spending more on organic food. Per capita spending on organic food has doubled in the past decade. Overall, the opportunities for organic products remain large.
Overcoming the Strict Requirements of the U.S. and EU
While organic product sales are rising sharply and expected to continue growing in the coming years, Mr. Nguyễn Minh Tiến, Director of the Agricultural Trade Promotion Center (MARD), cautioned that there are still numerous challenges to overcome in promoting organic agricultural consumption. Consumer demand for organic products is rising rapidly, outpacing supply. A shortage of organic products could lead to scarcity and high prices, and potentially give rise to fraud, where conventional foods are falsely labeled as organic.
From a business perspective, Mr. Nguyễn Hoàng Anh, CEO of Nam Miền Trung Aquaculture Investment Co., Ltd., pointed out that organic agriculture faces many challenges related to input costs, labor, profitability, and production volumes, especially the lack of synchronization in production stages. “MARD and relevant authorities need to establish standards for organic agricultural products to enable proper control. This will help avoid inconsistency during implementation,” said Mr. Hoàng Anh.
Meanwhile, Mr. Nguyễn Hồng Lam, Chairman of the Board of Directors at Quế Lâm Group, emphasized that there are four key issues hindering the development of organic agriculture: lack of trust between state management agencies, businesses, and farmers; overexploitation of natural resources; environmental pollution affecting agricultural product quality and producer health; and consumer health, as well as the health of plants and livestock. “Only when these issues are addressed can organic agriculture truly succeed,” said Mr. Lam.
Focusing more on meeting export market demands, Mr. Bùi Hồng Quân, Vice Chairman of Vinamit, noted that the stringent organic standards of the U.S. and the EU present a significant challenge for Vietnamese agriculture. Soil, water, fertilizers, and all inputs in organic agriculture undergo rigorous testing by internationally accredited laboratories.
Some agricultural experts observe a strong shift from conventional products to clean, organic products that are healthier. However, organic products cater to a niche market with specific consumer needs and brand positioning. Therefore, to better meet export market requirements, particularly in traceability, transparency, and digitalization of organic products, it is essential to implement synchronized solutions with the collaboration of government agencies, businesses, and farmers, paving the way for more robust organic agricultural exports in the future.
