Despite the challenges faced due to the COVID-19 and climate change, Vietnam’s economy still maintained significant growth. And the agriculture sector had a pivotal role in the growth of the country’s economy. In this article, we talk about how the striking recovery of the agriculture sector in Vietnam poses a promising business prospect for foreign investors.
Agriculture Sector in Vietnam: 2021 Update
With a growth rate of 90% in the agricultural sector, according to Britcham.vn, Vietnam’s agro-forestry-fishery exports generated US$41.2 million in 2020. Rice exports exceeded US$3 billion in 2020, with the prices on the rise for the first time in history. Moreover, the processing of farm products to export to countries like Japan, China, and Brazil has drawn billions of dollars in investment.
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By the end of 2021, the agriculture industry aims to have a US$44 billion export turnover, according to The Voice of Vietnam. The sector aspires to nourish the agriculture economy in Vietnam by incorporating digital technologies to create a new agricultural environment.
Future of Vietnam Hi-Tech Farming
Incorporation of technology with agriculture is considered to be the quickest and most cost-effective approach to the sustainability of Vietnamese agricultural practices, while maintaining its ability to preserve natural resources. This introduction of 4.0 smart agriculture has enabled farmers to use the lowest amount of fertilizers and pesticides while tracking the data through GPS technology and moisture sensors to overcome conventional barriers of crop selection, market access, and innovation.
Moreover, the government intends to build 500 high-tech agricultural organizations, to raise local agriculture’s production value by five times. Besides that, the government has set aside $4.4 billion in financing for high-tech agriculture projects.
Furthermore, agricultural companies in Vietnam, particularly major firms that have invested extensively in digital farming to build a digitized agricultural supply chain, reduced costs, and increased productivity, are embracing high-tech apps in farming. Sat4Rice, a technology-based predictive data system developed by Nelen & Schuurmans in the Netherlands, is collaborating with Loc Troi Group in Vietnam to assist Mekong delta rice farmers in responding to rice production difficulties.
Investment Prospects in Vietnam’s Agriculture Industry
The challenges faced by the agriculture industry in Vietnam due to the effects of climate change have driven the need to shift to sustainable methods of farming, without adding to the stress for farmers, presenting lucrative investment opportunities in the sector. Following are the reasons why investing in Vietnam’s farming industry can be profitable for you:
- The national government’s strategic goals in future years will be sustainable agriculture and agri-value chain development.
- Farmers cooperating and partnering with relevant businesses are viewed as a growing and favorable trend.
- The desire to become a producer of high-quality processed agricultural goods that meet worldwide standards will necessitate improvements in all aspects of the supply chain, particularly farming practices and input efficiency.
- Vietnamese agricultural goods continue to face several barriers, particularly in terms of technology, to meet stringent international requirements.
- As local conglomerates’ interests shifted toward agriculture in 2020, there was a huge demand for agriculture-related consulting from experienced international players with extensive understanding and technology in the field of smart agriculture to develop projects in the country.
- Despite the recent growth of the certified organic farming areas, the national middle class – the fastest expanding middle-class population in the region – has a growing need for high-quality food. However, most Vietnamese certified organic goods are shipped to international markets.
In addition, the 13 Free Trade Agreements that Vietnam is a signatory to, coupled with the tax incentives like incentives on corporate income tax, exemption from land-use tax, and import duty make Vietnam’s agriculture sector an ideal spot for investment.
How Can Cekindo Help
Investing in the agriculture industry in Vietnam entails a series of time-consuming and unduly formal procedures. Having company registration pros on your side, such as Cekindo, may save you a lot of time and make the process go smoothly. Cekindo offers a wide range of auxiliary services linked to business formation, including legal advice, license and document acquisition, tax and accounting, and HR services.