Food safety investment to boost agricultural exports

17:49 | 07/07/2018
Investment in food safety can help Vietnam secure its $40 billion agriproduct export target in 2018, and with a project implemented to enhance food safety, higher export targets can be achieved in many years to come.

Improving the food safety of products like poultry, fruits, and vegetables is said to be the key to unlock new market opportunities, increasing the income of local farmers, food producers, and exporters, as well as helping Vietnam achieve its agricultural export turnover target of $40 billion in 2018.

Over the next three years, IFC, a member of the World Bank Group, in partnership with New Zealand, will build awareness for increased food safety standards and deliver customised training programmes to about 1,000 smallholder farmers based on the basic level of GLOBAL G.A.P. requirements and other relevant standards.

This project will also provide a more intensive package of support to a maximum of 20 smallholder farmers, helping them acquire the GLOBALG.A.P. certification—an internationally recognised set of farm standards dedicated to Good Agricultural Practices (GAP)—or equivalent standards. It will also find opportunities to connect the trained farmers with potential retailers and agribusiness firms who are looking for internationally-certified products.

“Improving food safety standards in order to access new markets is key to achieving Vietnam’s $40 billion agriproduct export target in 2018 and beyond,” said New Zealand Ambassador to Vietnam Wendy Mathews. “We are very pleased to support IFC’s efforts to connect smallholder farmers with growing domestic and international markets. Promoting better agribusiness practices and food safety standards will benefit Vietnam’s farmers, businesses, and consumers.”

food safety investment to boost agricultural exports
IFC and New Zealand will expand food safety awareness and help smallholders acquire the GLOBAL G.A.P. certification

“All levels, from the government to processors, need to work on the issue of food safety. This should be driven from the ground up rather than from the government down. There will be a cost for this, but if we want to be in the game, we have to spend that money,” said David Marks, poultry technical consultant for Dutch-backed feed company De Heus Vietnam.

Marks told VIR that for a company like De Hues or Bel Ga, considerable investment would need to be put into food safety to provide salmonella-free feed or salmonella-free chicken. “That requires considerable work on the farm and in the feed mill to improve security.”

According to Marks, there is generally a lack of understanding about food safety issues. “A lot of smallholders, and a lot of farmers generally, do not really know what salmonella is, and so education is needed.”

According to IFC, the annual food consumption in the domestic market accounts for roughly 15 per cent of the gross domestic product, with an average annual growth rate of approximately 18 per cent. However, inadequate safety standards can inhibit the sector’s growth potential, jeopardizing consumer health and reducing market opportunities for local food producers in the modern food value chain.

This project is a component of IFC’s broader Vietnam Food Safety Programme, which was launched in July 2017 in partnership with the Slovak Republic, aiming to address food safety standards and practices in the country. Within just a year, IFC helped40 poultry houses of two independent downstream poultry farms which source breeding chickens from Bel Ga JSC—a leading poultry breeding firm—to acquire the GLOBALG.A.P. certification.

In an interview with VIR, managing director of Bel Ga Southeast Asia Fred De Vis noted that GLOBALG.A.P. helps the firm persuade its business partners, including broiler farmers and slaughter houses, to set up an internationally accepted quality management system.

“If every partner in the supply chain is producing safe food, while at the same time protecting the environment as well as human and animal welfare, it will only be a matter of time before we can supply safe meat to all end consumers, and providing them a healthier and happier life,” said De Vis.

“GLOBALG.A.P. also brings us the opportunities to export hatching eggs from Vietnam to other countries, to become part of a poultry meat value chain that exports poultry meat outside Vietnam (even to Japan having the highest food safety standards in the world), to improve and consolidate our internal organization and make all company members aware of the necessary rules and procedures, to improve the reputation of the company and to strengthen the marketing strategy.”

By establishing a system for GLOBALG.A.P., which focuses on hygiene and biosecurity, antibiotic reduction, and traceability, among others, these two farms from Binh Phuoc and Dong Nai provinces have been able to supply about 3 million GLOBALG.A.P.-certified broilers, or 6 million kilogrammes of chicken meat, to the domestic market and also export them to Japan over the past year.

“Implementing internationally-accepted food safety practices and systems is essential for the sustainable growth of the Vietnamese agribusiness sector. This will improve competitiveness and help increase sales for farmers and food producers,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. “IFC’s work in Vietnam builds on our experience in other countries around the world, where we helped local players grow and create new and better opportunities.”

IFC has over 15 years of experience in providing food safety advisory services to agribusiness and retail clients globally. This work has helped 150 IFC clients from 30 countries attract $290 million in investment and generate over $230 million in new sales. Furthermore, clients benefit from improved efficiency and cost savings, which contribute to a stronger brand value.

Fred De Vis, managing director of Bel Ga Southeast Asia

Taken into account implementation of food safety standards embraces all aspects of the business including operations (standard operations procedures, implementing hygiene standards, organizing training sessions, auditing), legislation (enhancing regulatory framework, labelling) and marketing (creating an awareness with all our business partner with regard to the importance of food safety) , instead of calculating the amount of industry investments needed in food safety, we can better argue that food safety requires another way of investing , whereby each investment is being considered how it can contribute to a higher food safety for the end consumer. Several aspects such as ‘creating food safety awareness’ are also very difficult to measure in terms of money.

A burden for SME can certainly be the related costs to bring companies in line with Food Safety Standards. Investments in hygiene, chemical training, consulting, first aid training, technical training, keeping proper records of daily production activities like feed intake, water, temperature, operational efforts with regard to preventive and corrective plans, cost a lot of time and money. However, the focus should be on the opportunities that will generate a high return on these investments in the longer term. If your company is in line with GLOBAL G.A.P, your infrastructure and operational procedures are in line with highest Food safety Standards, and ready to serve the most demanding clients in the food industry, wherever in the world they are located. Food Safety is already a hot topic now, and will become more and more a unique selling point to differentiate your company from competitors in the global food industry.

By Trang Nguyen

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