Global consumers are gradually changing their habits of using foods with the closest natural origin, meeting the needs of not only being full, but also ensuring good health and a healthy lifestyle. To meet this consumer trend, participating in the production and export of organic agricultural products is a sustainable, long-term direction for Vietnamese businesses. Through analyzing the advantages and difficulties of exporting organic cashew products, the author proposes some solutions to promote the production and export of organic agricultural products in Vietnam in the coming time.
Summary
Global consumers are gradually changing the habit of using foods that are mostly nature-friendly sourced, meeting the requirement for not only food sufficiency, but also a healthy lifestyle. To meet this consumption trend, participating in the production and export of organic agricultural products is a sustainable and long-term direction for Vietnamese businesses. Through analyzing the advantages and disadvantages of exporting organic cashew products, the author proposes some solutions to promote the production and export of organic agricultural products of Vietnam in the coming time.
INTRODUCE
In the context of increasing demand for organic agricultural products in the international market, Vietnam has great potential in developing organic agriculture. However, to meet very high standards for producing and exporting organic agricultural products to markets, especially markets with high demand for this product but being difficult such as the United States and the European Union (EU), requires farmers and businesses to comply with strict processes right from raw material production, processing, to preservation and export... In the context of limited resources of people and businesses, they are in dire need of multi-faceted support from the government. State management agencies, such as: mechanisms and policies; capital; technique; market..., to help Vietnam's organic agricultural industry quickly take advantage of potentials and advantages effectively, thereby bringing high added value to exported agricultural products in the near future.
OVERVIEW OF ORGANIC AGRICULTURE
Concept of organic agriculture
According to the United States Department of Agriculture (USDA), organic agricultural production is: "A system that includes the totality of mechanical, biological and farming elements for the purpose of reusing resources, promoting ecological balance and protecting biodiversity."
The EU's agricultural management agency also sets rules for organic agricultural production that serve as a basis for the standards for goods recognized as organic to be imported into the bloc. Specifically, these regulations cover general and specific rules aimed at promoting environmental protection, maintaining Europe's biodiversity and building customer trust in organic products. The content covers every aspect of organic production from planting to the final processed product. Accordingly, in organic production and farming, the use of genetically modified organisms (GMOs) and ion radiation is not allowed; Limit the use of artificial fertilizers, herbicides and pesticides; prohibit the use of hormones; Only use antibiotics on animals when there is no other solution for animal health. This means that the production of organic products must find different approaches than traditional farming to maintain soil fertility and ensure the health of plants and animals. This is a new challenge in agricultural production to solve the productivity problem.
Trends, potential for organic agriculture development and export opportunities
Organic agricultural production is considered to be the main and inevitable trend in the future, because it not only brings consumers high quality products, but is also safe for the producers themselves. Besides, the outstanding advantages of organic agriculture compared to traditional agriculture are sustainability, environmental protection and biodiversity. Therefore, exporting organic agricultural products has many advantages in penetrating demanding markets, such as the EU and the United States.
The value of organic agricultural products is also superior to conventional selling prices. For example, for cinnamon, anise, cashew kernels, pepper or coconut meat, the selling price of organic products that meet EU Organic and USDA Organic certification standards is 10% to 25% higher, even higher than conventional products of the same type. Not only that, the demand for organic products in many markets, such as Europe and the United States, is increasing, due to changing eating habits: consumers tend to eat clean products of natural origin, gluten-free, effective in weight loss, replacing meat and conventional products (Maximize Market Research, 2023).
EXPORT OF ORGANIC AGRICULTURAL PRODUCTS OF VIETNAM
As a traditional agricultural country, Vietnam has much potential to build organic agriculture. To date, 59/63 provinces and cities across the country have implemented organic agriculture and it is increasingly spreading strongly. In 2021, Vietnam's organic agricultural land area will reach more than 174,000 hectares, an increase of 47% compared to 2016, ranking 9th among the 10 countries with the largest organic agricultural land area in Asia (Anh Tuyet, Huu Nghia, Thien Vuong, 2023).
The potential and economic value of exporting organic agricultural products is very large, but Vietnam's total export turnover of organic agricultural products has only reached over 335 million USD/year out of a total of over 53 billion USD in agricultural, forestry and fishery export turnover in 2022 (Tran Ngoc, 2023), or less than 0.7%. This is a rather modest number compared to Vietnam's organic agricultural production resources, as well as the needs of the world market.
According to statistics from the Institute of Organic Agriculture Research (FiBL) and the International Federation of Organic Agricultural Movements (IFOAM) (2021), the value of world organic goods has exceeded 100 billion USD, the largest import markets for organic products include: the United States (44.7 billion Euro); Germany (12 billion Euro); France (11.3 billion Euro). These are also Vietnam's largest organic agricultural product export markets.
Organic agricultural products are considered an inevitable trend and in fact high-end markets, such as Europe and the United States, have great demand and are constantly increasing imports each year. Although it is a country with many leading export agricultural products in the world such as: rice; cashews, pepper..., but the export value of Vietnam's organic agricultural products compared to other countries in the world is still low (Table).
Table: Export value of organic agricultural products to the EU of Vietnam compared to some countries
| Exporting country | Imports in 2020 (million USD) | Imports in 2021 (million USD) | Change (%) | Market share in 2021 (%) |
| Ethiopia | 15,972 | 17,036 | 6.7 | 0.6 |
| Sierra Leone | 18,288 | 16,236 | -11.2 | 0.6 |
| Russia | 31,971 | 15,919 | -50.2 | 0.6 |
| Vietnam | 13,441 | 15,267 | 13.6 | 0.5 |
| Bolivia | 14,471 | 12,986 | -10.3 | 0.5 |
| Congo | 11,615 | 12,550 | 8.0 | 0.4 |
Source: European Union Agency for Agricultural and Rural Development
According to a report by the European Union Agency for Agricultural and Rural Development, Vietnam only ranks 39th in the value of organic agricultural goods imported into this market, with a value of less than 16 million USD in 2021. Topping this list is Ecuardo with an export value of organic agricultural products reaching over 345 million USD (accounting for 12% of the market share) into the EU market.
PERSPECTIVE FROM ORGANIC CASHEW EXPORT
According to the Vietnam Cashew Association (Vinacas), in 2023, the total cashew growing area in the country will reach about 320,000 hectares, down 2,300 hectares compared to 2022. However, output is expected to reach 345,000 tons, an increase of 3,300 tons. The average yield reached 1.15 tons/ha, an increase of 30kg/ha. In the first half of 2023, businesses exported more than 279,000 tons of cashew nuts of all kinds, export turnover reached about 1.6 billion USD, an increase of 9.49% in volume and an increase of 7.65% in value (Manh Hung, 2023). However, the number of companies possessing organic certificates for export is only a few dozen, a number that is too modest compared to the number of companies participating in the field of cashew production and export in Vietnam for many reasons as follows:
One is, in Vietnam, the Ministry of Science and Technology has issued the first set of Vietnamese standards (TCVN 11041-1:2017) specifically for the production, cultivation, husbandry, processing and labeling of organic agricultural products, but these organic standards are mostly worthless when exporting, because each market will have its own regulations to control the quality of imported organic goods, such as: Organic EU for the EU market, Organic USDA for the US market. Ky, JAS for the Japanese market. Thus, to export organic cashews to the EU and US markets, two of the largest export markets of Vietnamese cashews, businesses must meet the necessary conditions of having an EU Organic or USDA Organic certificate. Meanwhile, certification is applied separately to cultivation (growing area) and production (factory). The set of standards for organic agricultural production management of these two markets includes detailed very strict requirements related to soil characteristics, such as soil, water, climate of the growing area, and farming practices. All activities taking place on each farmer's farm are recorded in the farmer's diary through the internal control team managing the growing area (Internal control system - ICS). Farmers participating in organic production must sign a commitment to fully implement organic farming principles and participate in annual training sessions.
Two, the production stage is also required to be strictly controlled so that cross-contamination does not occur and origin can be traced, a very important factor in organic production, different from conventional production and export. Each product reaching consumers can be traced to each farmland plot of each farmer and each harvest through a traceability code. In addition, to ensure that the organic farming and production process strictly complies with the principles, businesses will have to conduct a re-evaluation once a year along with unlimited unscheduled unannounced evaluations. This causes businesses to face many difficulties and challenges.
Third, being certified to Organic EU or Organic USDA standards is only the first step and does not mean that the enterprise's export shipments will then be certified as organic. Exported shipments must go through the process of applying for COI (Certificate of inspection) for organic goods exported to the EU market, or TC (Transaction certificate) for organic goods exported to the US market. Only when COI/TC is approved can the shipment be confirmed to meet organic standards in these two markets. Since the beginning of 2023, according to information from Control Union, one of the units authorized to evaluate, certify and monitor organic production according to Organic EU and Organic USDA standards, all shipments when applying for COI/TC must have samples analyzed to ensure the goods are not contaminated with banned substances (pesticides, herbicides, chemicals...) prescribed for organic goods. Currently, all units authorized by the EU and USDA to evaluate organic certification are foreign organizations. The cost of auditing and maintaining certification is very high. Organic cashew production businesses have not received any significant support in terms of mechanisms and policies to create competitive advantages in production and export.
Not stopping there, goods exported to the EU or US market can still be sampled for analysis and if banned substances are detected, the shipment will still be downgraded to normal goods. This means that businesses will have to compensate customers for the added value they pay for organic products. At the same time, the process for handling complaints/incidents with organic exports will be activated, businesses will have to temporarily stop exporting organic products until the source of the problem is found, satisfactorily resolved and approved by the certification unit. All of these factors make the process of producing and exporting organic cashews cost-prohibitive and not all businesses are willing to risk investing.
Four is, difficulties related to the farming practices and habits of cashew farmers. Information from the author's survey of a company exporting organic cashews to the US and EU markets shows that the business currently has a raw material area of over 1,000 hectares certified to EU Organic and USDA Organic standards, but there are over 500 households on the management list, on average each household only has about 2 hectares of organic cashew area. Managing a large number of farmers per unit of area causes many difficulties in terms of management costs, not to mention the modest yield of organic cashew nuts during the initial conversion period. Another challenge is that most of the farming households are ethnic minorities with many limitations in terms of awareness, as well as traditional farming thinking that is deeply ingrained in people's lives, making the implementation of organic cashew farming methods difficult.
PROPOSING SOLUTIONS TO PROMOTE ORGANIC AGRICULTURAL EXPORTS
From the reality of producing and exporting organic cashews, it can be seen that besides opportunities, such as high value, huge demand from high-end markets..., businesses participating in this field are currently facing many difficulties and challenges. To promote the export of organic agricultural products in general and organic cashew products in particular in the coming time, the author proposes a number of solutions as follows:
Firstly, in terms of policy mechanisms: The Government and related industries need to have policies to plan concentrated organic agricultural production areas for export, avoiding fragmentation that leads to difficulty in management and increased cost pressure for businesses. At the same time, supplement and improve institutions and policies to create a legal framework for the rapid development of market infrastructure in a civilized and modern direction, with a focus on infrastructure connecting regional markets according to economic territorial space, connecting with the markets of ASEAN countries in a unified market space, and connecting with the market space of countries with which Vietnam has signed new generation free trade agreements (FTAs), to increase opportunities for consuming organic agricultural products. muscle. Focus on perfecting policies to encourage domestic entities to quickly develop agricultural and food distribution systems in the domestic market and countries with competitive advantages to support the consumption of organic agricultural products.
Second, about production costs and communication about organic agriculture: Enterprises participating in the production and export of organic agricultural products need certain support in terms of costs, such as product evaluation costs, purchasing organic fertilizers, etc., to encourage investment in sustainable agricultural development. At the same time, there also needs to be support related to training and propaganda so that people actively respond and accompany the development of organic agricultural products with businesses. The state needs to propagate to raise awareness and management thinking about organic agricultural production and develop the organic agricultural product market...
Third, in terms of technology and investment: There is a need for international cooperation programs, technology transfer for farming management, production, and traceability of organic agricultural products to promote this product line to develop more effectively and sustainably in the coming time. There needs to be preferential policies to attract reputable foreign businesses to invest and export Vietnamese organic agricultural products.
MSc. Dao Thanh Cong– IMC Krems University of Applied Sciences, Austria
(According to the Journal of Economics and Forecasting, No. 22, August 2023)
