Market access for small-scale farmers in the Global Value chains -- The case of Pangasius farmers in the MeKong River Delta, Vietnam

Doan Khoi Le Nguyen
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Doan Khoi Le Nguyen: School of Economics and Business Administration, Can Tho University

No 132, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: Aqua-cultured fish is one of the dominant export products in Vietnam. The development of this sector is a major source of foreign currency and employment. The success of the sector encourages both local and foreign investment. In Vietnam, the Mekong River Delta (MRD) is the main producer being responsible for over 80% of the total Vietnamese production (Vietnam Association of Fish Exporters and Producers -VASEP, 2004). The freshwater Pangasius is the most commonly cultured edible fish species in this region. Pangasius farming in the Mekong Delta expanded dramatically: from 154,000 tonnes in 2002 to 1.2 million tonnes in 2007. This explosive growth raises various sustainability issues. Margin became low or negative as cost of input increased and market prices decreased. The Vietnamese government has planned the Pangasius farming area of 8,600 hectares with 1.25 million tons of live fish in 2010 and 13,000 hectares with 1.85 million tonnes in 2020. Increased export market access for high-quality food products is an important avenue for diversification of Vietnam’s agricultural sector. It is also essential for sustainable rural economic growth and a reduction of poverty (World Bank, 2006 and 2008). This is especially true for the sectors with high degrees of smallholder involvement. Smallholder farmers in developing countries and in particular in Vietnam face a number of technical and managerial constraints that limit their participation in an export-oriented supply chain (Narayanan and Gulati. 2002; Torero and Gulati. 2004; Van der Meer. 2006; Khoi et al. 2008). The international markets demand that exporters of fishery products assure hygiene and safety for consumers. The need for more stringent quality assurance resulted in a shift towards company-owned farms and vertical coordination. However, the involvement of small-holder may be an important policy instrument for poverty reduction as fish production in Vietnam is relatively widespread among smallholders and many of them cater for export markets (Loc, 2006; Sinh and Phuong., 2006). Therefore, the objective of this research is to design an effective export-oriented Pangasius supply chain based on small-scale farming systems. Put differently, this research explores how small-scale farmers can benefit from the emerging opportunities in the Vietnamese fish industry.

Pages: 26 pages
Date: 2012
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