Vietnam has a population of 99.46 million (2022), with 62.4% living in rural areas, which also account for 62.8% of the labor force. Agriculture, farmers, and rural areas have always held a strategic position in industrialization and modernization, serving as the “mainstay” of the economy and a “sector of national advantage.” Vietnam is currently implementing the Strategy for Sustainable Agricultural and Rural Development for 2021–2030, with a Vision to 2050, under Decision No. 150/QĐ-TTg dated February 28, 2022. However, limitations in the national logistics system and the logistics system for agriculture and rural areas pose an immediate threat to growth and the achievement of sustainable development goals. In this article, we offer an initial discussion of the need to establish and develop agricultural and rural logistics systems to ensure the supply of inputs for production and daily life in agriculture and rural areas in support of sustainable development, as climate change has increasingly extreme impacts on every aspect of socioeconomic life in Vietnam’s agricultural sector and rural areas.

Keywords: Agricultural logistics, agricultural logistics systems, agricultural logistics policies, water storage facilities, fresh water as a strategic commodity and input for production and daily life.

Summary: Vietnam has a population of 99.46 million people (2022), of which 62.4% of the rural population accounts for 62.4% and the labor force is also concentrated mainly in rural areas at 62.8%. Agriculture, farmers, and rural areas always hold a strategic position in the cause of industrialization and modernization, are the “pedestal” of the economy and are a “National Advantage Sector” currently implementing the Vietnam War. Sustainable agricultural and rural development strategy for the period 2021 – 2030, vision to 2050 according to Decision No. 150/QD-TTg, dated February 28, 2022. But the limitations of the national logistics system and the agricultural and rural logistics system are an existing risk that reduces growth rates and the realization of sustainable development goals. Within the scope of this article, we initially mention the need to build and develop an agricultural and rural logistics system to ensure the process of supplying factors for production and agricultural and rural life. sustainable development in the context of climate change increasingly having extreme impacts on all aspects of socio-economic life in the agricultural and rural sectors of Vietnam.

Keywords: Agricultural logistics, agricultural logistics system, agricultural logistics policy, water storage, fresh water is a strategic commodity and material for production and life.

I. Introduction

Rapid and sustainable economic development, including agricultural and rural economic development, is a guiding principle throughout Vietnam’s socioeconomic development strategy for 2021–2030, with a vision to 2050. This requires the effective implementation of the Politburo’s Conclusion No. 81-KL/TW dated July 29, 2020, on ensuring national food security through 2030; the Government’s Resolution No. 34/NQ-CP dated March 25, 2021, on ensuring national food security through 2030; and Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021–2030, with a Vision to 2050… Vietnam’s agricultural sector needs to establish and sustainably develop a modern, integrated agricultural logistics system that can adapt to increasingly extreme climate change, including rising sea levels, severe droughts, saltwater intrusion, and large-scale devastation caused by storms and floods… This will support sustainable agricultural development, help increase the value of agricultural products in export and import activities and in market trading, and generate additional contributions to the state budget and GDP.

To date, Vietnam has had few comprehensive, large-scale studies of agricultural and rural logistics and the sustainable development of commercial agricultural production, particularly amid the increasingly extreme impacts of climate change. There are virtually no textbooks or monographs on agricultural logistics, and very few major ministerial- or state-level research projects examining agricultural and rural logistics systems in depth. Investment in, training for, and development of the logistics workforce in general, and the logistics workforce serving sectors, localities, and enterprises in agriculture in particular, have not received due attention in Vietnam. To this day, the Ministry of Education and Training (MOET) still lumps the logistics training program code into the code for “Industrial Management”!…

Research on establishing and developing sustainable agricultural logistics systems is therefore essential, encompassing the formulation of mechanisms and policies for agricultural logistics development; the development of agricultural and rural logistics infrastructure and agricultural logistics real estate; workforce training and development for the agricultural logistics sector; and the development of a network of agricultural logistics enterprises… Given these realities, research on “developing agricultural and rural logistics systems to help promote sustainable agricultural growth in Vietnam” is urgently needed in both theoretical and practical terms and addresses emerging requirements in the new context.

II. Overview of Agricultural and Rural Logistics Systems to Ensure Sustainable Agricultural Development in Vietnam

After nearly 40 years of renewal since the 1986 Resolution on renewal, Vietnam’s agriculture, including fisheries and forestry, has recorded many major achievements, maintaining stable growth and contributing significantly to the economy’s GDP growth. Even when growth rates in other economic sectors fell sharply, agriculture still grew by 2.68% compared with 2019, with agriculture increasing by 2.7%, forestry by 2.4%, and fisheries by 3.3% (General Statistics Office, 2020). In 2021, the COVID-19 pandemic had a major impact on every aspect of the economy, daily life, and society. Against this backdrop, the agriculture, forestry, and fisheries sector was one of the economy’s “mainstays” in 2021, growing by 2.9%, above the economy-wide rate of 2.58%. This created momentum for recovery and accelerated growth in 2022, when agricultural exports reached USD 53.22 billion, up 9.3% from 2021… Identified as a “sector of national advantage,” agriculture continues to implement the Strategy for Sustainable Agricultural and Rural Development for 2021–2030, with a Vision to 2050.

Agricultural products constitute one of Vietnam’s important export sectors, contributing positively to the country’s total export value. Exported to more than 180 markets worldwide, Vietnamese agricultural products have gained considerable recognition, particularly in major markets such as the EU, the United States, and China… Vietnam’s agricultural exports comprise eight main product categories: fruit and vegetables, cashew nuts, pepper, tea, coffee, rice, cassava and cassava products, and rubber. Among these, coffee, rice, fruit and vegetables, and cashew nuts remain the leading agricultural exports, accounting for the largest shares of export value. In recent years, Vietnam’s logistics sector, including agricultural logistics activities, has contributed positively to making agricultural products one of the country’s important export sectors. Logistics has made many contributions to agricultural production activities, particularly exports and imports, making agricultural exports a bright spot and a “mainstay” of the economy for many years.

Despite relatively high and stable growth and shifts in the composition of export products to meet market demand and enhance the country’s competitive advantages, Vietnam’s agricultural exports still consist primarily of preliminarily processed products produced on a small scale or exported through intermediary countries, reducing their value. In addition, the value of agricultural exports remains heavily affected by natural conditions and price fluctuations on global markets, making growth unsustainable. Investment in developing agricultural logistics systems has been lacking, and these systems have even been “forgotten” in the development master plans and plans of many localities. Insufficient attention to investment in logistics system development has driven up logistics costs for agricultural products, placing a heavy cost burden on people and enterprises and reducing the competitiveness of agricultural products in the market.

“Logistics in many localities remains inadequate, failing to meet the requirements of concentrated, large-scale commercial agricultural production, international competition, and increasingly complex climate change” (Ministry of Agriculture and Rural Development, 2020). Moreover, in many localities, residents and agricultural enterprises still have to provide their own logistics infrastructure for production and their products (such as building cold storage facilities for post-harvest products, digging ponds and lining them with tarpaulins to store freshwater, digging wells in dry riverbeds to obtain freshwater for production and daily use, building small-scale agricultural processing facilities, and constructing warehouses and cold storage facilities…). This increases costs for enterprises and residents while reducing the quality, value, and competitiveness of Vietnamese agricultural products, resulting in lost income for producers and lost revenue for the state budget.

As with industrial production, the production process for agricultural products ends only when agricultural products and goods reach end consumers at home and abroad. Yet insufficient attention has been paid to agricultural and rural logistics. This includes developing mechanisms and policies for agricultural logistics; building agricultural and rural logistics infrastructure, such as warehouses, freshwater storage tanks and reservoirs, reinforced-concrete lining for ponds and lakes, agricultural logistics centers, and specialized agricultural logistics centers; and developing agricultural logistics enterprises (agricultural logistics currently remains overly dependent on middlemen and traders). The agricultural sector has not systematically invested in and built agricultural logistics infrastructure under a unified, long-term master plan to respond effectively to increasingly severe climate change. Little attention has been paid to infrastructure for seasonal storage of strategic supplies for production and daily life, such as freshwater and planting materials, in rural areas, where more than 62% of the population lives, to supply the necessary materials and technical inputs for production and daily life in agricultural and rural areas.

Promoting agricultural exports is currently one of the important policies in restructuring agriculture toward higher added value and sustainable development, as identified in the Party Congress Resolution’s direction to “Accelerate agricultural restructuring toward high technology and large-scale commodity production, and expand export markets.” Efforts should be made to build a comprehensively developed agricultural sector that is ecological, modern, high in added value, and efficient. Rapid and sustainable economic development is a guiding principle throughout Vietnam’s Socio-Economic Development Strategy for 2021–2030. Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021–2030, with a Vision to 2050, also set the following objectives: “Build a commodity-producing agricultural sector while developing agriculture based on local advantages toward modern production with high productivity, quality, efficiency, sustainability, and competitiveness, ranking among the leaders in the region and the world; firmly ensure national food security; and make important contributions to socio-economic stability, natural disaster and disease prevention and control, environmental protection, climate change response, and the effective implementation of international commitments to reducing greenhouse gas emissions. Improve the incomes, quality of life, roles, and standing of people engaged in agricultural production; create non-agricultural jobs to diversify livelihoods and sustainably reduce poverty for rural residents; ensure equitable development opportunities across regions… and with a vision to 2050, strive to make Vietnam one of the world’s leading agricultural countries, with a modern, efficient, and environmentally friendly agricultural processing industry. Rural areas will have no poor households and will become ‘places worth living in’ that are civilized, green, clean, and beautiful, with rural living conditions and incomes approaching those in urban areas and with close, harmonious connections to urban areas.”

To realize these objectives, in addition to implementing the directions and solutions set out in the Politburo’s Conclusion No. 81-KL/TW dated July 29, 2020, on ensuring national food security through 2030; the Government’s Resolution No. 34/NQ-CP dated March 25, 2021, on ensuring national food security through 2030; Decision No. 194/QĐ-TTg dated February 9, 2021; Decision No. 386/QĐ-TTg dated March 17, 2021; Decision No. 1163/QĐ-TTg dated July 13, 2021; and Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021–2030, with a Vision to 2050… Vietnam’s agricultural sector needs to build and sustainably develop a modern, integrated agricultural logistics system adapted to climate change, including sea level rise, drought, saline intrusion, storms, and floods… This will support sustainable agricultural development, help increase the value of agricultural products in exports, imports, and market transactions, and make additional contributions to state budget revenue and GDP.

III. The Current Situation and Issues in Building and Developing Vietnam’s Agricultural and Rural Logistics System

Logistics is an “infrastructure” service sector, and the agricultural logistics ecosystem is an important component of the national logistics ecosystem. Its mission is to ensure the uninterrupted flow of Vietnamese agricultural products and the regular, continuous operation of all socio-economic activities in agricultural and rural areas at the lowest possible cost. The operation of this system will establish an interconnected, integrated network and create opportunities to continually increase the value of agricultural goods and supply services, continually improve people’s living standards, and promote sustainable agricultural and rural economic development. The current limitations of the national logistics system and agricultural logistics pose an existing threat to the efficiency and sustainability of agricultural and rural economic development in Vietnam.

To harness potential and strengths and address limitations in order to promote agricultural logistics development and meet the requirements of rapid and sustainable agricultural economic development, coordinated short- and long-term solutions are needed to establish and develop Vietnam’s agricultural logistics system. These solutions must address awareness of agricultural logistics; the development of mechanisms and policies for agricultural logistics; the development of logistics infrastructure tailored to agriculture and rural areas and agricultural logistics real estate; the provision of logistics personnel for the agricultural logistics sector; and the development of a network of agricultural logistics enterprises. Within the scope of this article, we would like to emphasize the following issues:

(1). Awareness of the role of agricultural logistics in the national logistics system needs to be raised to increase investment, development, and systematic, comprehensive research into theoretical and practical issues in agricultural logistics, with close attention to the relationship between agricultural logistics development and sustainable agricultural development in our country, thereby making additional contributions to economic growth and state budget revenue. Communication efforts should therefore be strengthened to improve awareness and thinking about agricultural logistics, particularly its role as the impacts of climate change become increasingly extreme in Vietnam. Based on the agricultural sector’s development orientations through 2030, with a vision to 2050, the system of development policies and legal documents governing trade and logistics should promptly address gaps in mechanisms and policies for agricultural and rural logistics development. This will help renew Vietnam’s agricultural economic growth model and strengthen agriculture’s role as a “sector of national advantage” in the new context.

(2). Supplement and improve logistics institutions and legislation to provide a favorable legal basis for the sustainable development of agricultural and rural logistics activities in the market, and supplement and amend relevant legislation, such as the Commercial Law, the Law on Foreign Trade Management, the Customs Law, the Land Law, and the Law on Real Estate Business… to address agricultural logistics. On this basis, establish consistent mechanisms and policies for agricultural and rural logistics development from the central level to localities and cities, creating a favorable environment for the agricultural logistics system to develop. This would help prevent the annual situation in which thousands of vehicles queue up and become congested at border gates in Lang Son and Lao Cai whenever the harvest season arrives, while every dry season, “military personnel and civilians” must deliver fresh water can by can for domestic use, let alone supply fresh water for agricultural production. Meanwhile, agricultural products lack systems of warehouses and cold storage facilities for preservation and processing, as well as fresh water storage facilities, and transportation relies primarily on small vehicles operating individually. Rail and sea transport are rarely used, even though at times Vietnam’s cement, iron, and steel production exceeds demand. It is therefore necessary to upgrade the “Project for Logistics Development Linked to Agricultural Production and Business Areas” in the strategy under Article 2, Section 5 of Decision No. 150/QĐ-TTg dated February 28, 2022, into the “Project for the Establishment and Sustainable Development of Vietnam’s Agricultural and Rural Logistics System for 2021-2030, with a Vision to 2050.” This would match the agricultural sector’s role and standing in the new context and ensure consistency among tasks and solutions for sustainable agricultural development.

(3). Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021-2030, with a Vision to 2050, needs timely amendments and additions concerning agricultural logistics system development, development policies, and the establishment of logistics industrial parks, logistics centers, and agricultural logistics enterprises… These issues currently receive far too little attention and lack specific objectives and tasks. The Decision goes no further than an uninterrupted logistics system; investment in improving processing and preservation capacity and logistics services for major specialized production areas; the establishment of wholesale market systems linked to logistics chains in key agricultural production areas; the construction of border trade logistics centers; and agricultural support services (warehousing, specialized transport, trade, and logistics; connections with agricultural processing facilities and logistics systems… under Decision No. 150/QĐ-TTg dated February 28, 2022). Even in the list of nine key programs and projects to implement the strategy, logistics and logistics infrastructure appear to have been forgotten! Yet the logistics system, including agricultural logistics centers, represents a new business model, an effective model for agricultural and rural economic linkages, and a breakthrough solution for attracting investment, including logistics investment, and centralizing and managing revenue from agricultural logistics activities to increase state budget revenue. At the same time, it ensures that production and business activities and socio-economic activities in agricultural and rural areas take place regularly, continuously, and without disruption at low cost, thereby helping achieve the objectives of the Strategy for Sustainable Agricultural and Rural Development.

(4). Plan the construction of Vietnam’s agricultural logistics infrastructure system, particularly transport and agricultural trade infrastructure, agricultural commodity warehouses, cold storage facilities, refrigerated transport, fresh water storage systems, and seasonal storage systems for strategic agricultural supplies… especially in mountainous areas, the Central region, the South Central region, the Southwest region, and the Central Highlands, where planning and investment in development have yet to take place. This is an important foundation for establishing and developing an agricultural and rural logistics system that ensures sustainable agricultural and rural development. The lack of developed, modern, and integrated agricultural logistics infrastructure has caused enormous losses in many rice, industrial crop, and fruit-growing areas… because of saltwater intrusion, fresh water shortages, and forest fires. It has also disrupted people’s normal lives, forcing them to purchase clean water liter by liter for domestic use whenever the dry season and drought arrive…

Meanwhile, total state budget development investment in agriculture and rural areas for 2011-2020 was approximately VND 1,570,518 billion, of which nearly VND 137,005 billion was managed by the Ministry of Agriculture and Rural Development (Ministry of Agriculture and Rural Development, 2020). Yet to date, the country still has no fresh water storage system, even though fresh water is a strategic commodity and supply for production and daily life, nor seasonal fresh water storage facilities in drought-prone areas. Nor has any logistics center specializing in agricultural products been built on the scale of an industrial park in concentrated agricultural production and fruit-growing areas… Even the South Central region and the provinces of the Southwest region have not built any fresh water storage facilities. They still rely mainly on rivers and natural or artificial reservoirs, depending primarily on “working with nature,” with insufficient reinforced-concrete lining of water storage ponds and lakes. Every dry season, lakes and rivers dry up, and residents again dig wells in the middle of the dry lake and river beds to obtain fresh water for domestic use and production! Yet fresh water is an important strategic commodity and supply for production and daily life. Each year, the Ministry of Agriculture and Rural Development should allocate approximately 10% of the total state budget development investment it manages to building and modernizing agricultural and rural logistics infrastructure, alongside lining existing water collection and storage ponds and lakes with reinforced concrete. Concreting ponds and lakes or building river, stream, and sea embankments must not become something akin to “repaving city sidewalks every year.”

(5). Mechanisms and policies are needed to encourage and prioritize investment in agricultural logistics infrastructure development, with particular priority given to concentrated agricultural production areas and areas prone to drought, saltwater intrusion, and persistent fresh water shortages for domestic use and production during the dry-season months. Agricultural logistics infrastructure development should focus on investment in both hard and soft logistics infrastructure (building a network of permanent seasonal fresh water storage facilities and cold storage facilities; establishing dedicated agricultural logistics industrial parks in concentrated agricultural production areas and specialized logistics centers; developing agricultural logistics management software; and advancing digital transformation in agricultural logistics…). This infrastructure should be integrated and modern, with a long-term vision to attract domestic and foreign logistics investment into agriculture and rural areas.

Strengthen direct economic relationships between import-export enterprises and agricultural production households and cooperatives (including fisheries and forestry), rather than leaving procurement entirely to traders! Prioritize the development of a network of agricultural commodity logistics enterprises, as these enterprises remain very limited and have low competitiveness. As a result, many concentrated agricultural production areas often leave agricultural product procurement entirely to traders and middlemen, who even set procurement prices… This has harmed producers’ economic interests, caused revenue losses for local budgets and the state budget, and reduced the socio-economic efficiency and sustainability of Vietnam’s agricultural and rural economic development under the development strategy. At the same time, the current agricultural input supply system must be reorganized (the former Agricultural Materials Corporation and its extensive network) to fulfill the functions and tasks of the agricultural logistics system.

(6). Given the role and distinctive characteristics of Vietnam’s agricultural sector and agricultural logistics system in the new context, it is essential to encourage economics universities to offer specializations in agricultural and rural logistics, alongside promptly establishing a separate discipline code for logistics, rather than continuing the Ministry of Education and Training (MOET)’s longstanding practice of mechanically grouping it under the “Industrial Management” discipline code. Expanding education and professional development for personnel in the agricultural and rural logistics system is an important aspect of the Ministry of Agriculture and Rural Development’s state management of agricultural logistics and must be strengthened. Investment in, training for, and development of logistics personnel in general, and logistics personnel for sectors, localities, and enterprises in agriculture in particular, have not received adequate attention in Vietnam. There are virtually no textbooks or scholarly monographs on agricultural logistics, and very few major ministerial- or state-level research projects examine agricultural and rural logistics systems in depth.

There are still far too few professionally trained specialists in this field to meet the development needs of Vietnam’s agricultural logistics system. Research programs for 2021-2030 need to be supplemented to address the development of agricultural and rural logistics services and the construction and development of agricultural logistics infrastructure that adapts to climate change, reduces post-harvest losses and waste, and adds value to agricultural products… State management personnel at all levels in the agricultural sector also need systematic training and professional development to equip them with logistics knowledge and a logistics mindset, enabling them to organize and manage agricultural and rural activities scientifically at the lowest cost. This would help them address agricultural and rural issues effectively while avoiding parochialism, localism, group interests, and even “project” interests.

IV. Conclusion

Thus, to harness potential and advantages and overcome limitations to promote agricultural and rural logistics development and meet the requirements of rapid and sustainable agricultural economic development amid increasingly extreme climate change, coordinated short- and long-term measures must be implemented to establish and sustainably develop Vietnam’s agricultural logistics system. These measures include: raising awareness of the role of agricultural logistics in the national logistics system to increase investment and development, and systematically and comprehensively researching theoretical and practical issues in agricultural logistics in close relation to sustainable agricultural development in Vietnam, thereby making additional contributions to economic growth and state budget revenue; supplementing and improving logistics institutions and legislation to create a favorable legal foundation for the sustainable development of agricultural and rural logistics activities in the market; promptly amending and supplementing Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021-2030, with a Vision to 2050, to address agricultural logistics system development, development policies, and the establishment of logistics industrial parks, logistics centers, and agricultural logistics enterprises…, as these issues currently receive insufficient attention and lack specific objectives and tasks; planning the construction of Vietnam’s agricultural logistics infrastructure system, particularly transport infrastructure, agricultural trade infrastructure, agricultural product warehouses, cold storage facilities, refrigerated transport, fresh water storage facilities, and seasonal storage facilities for strategic agricultural inputs; introducing mechanisms and policies to encourage and prioritize investment in agricultural logistics infrastructure development, with particular priority given to concentrated agricultural production areas and areas prone to drought, saltwater intrusion, and persistent fresh water shortages for domestic use and production; and, given the role and distinctive characteristics of Vietnam’s agricultural sector and agricultural logistics system in the new context, encouraging economics universities to offer specializations in agricultural and rural logistics, alongside promptly establishing a separate discipline code for logistics, rather than continuing the Ministry of Education and Training (MOET)’s longstanding practice of mechanically grouping it under the “Industrial Management” discipline code. This is essential.

References:

– Dang Dinh Dao, Dang The Hung (2023), Enhancing the Role of Vietnam’s Logistics Sector in the New Context (Parts 1,2), Vietnam Logistics Magazine, Nos. 189,190, July and August 2023.

– Conclusion No. 81-KL/TW dated July 29, 2020, of the Politburo on ensuring national food security through 2030.

– Resolution No. 163/2022/NQ-CP dated December 16, 2022, on accelerating the coordinated implementation of key tasks and solutions to enhance competitiveness and develop logistics services in Vietnam.

– Resolution No. 34/NQ-CP dated March 25, 2021, on ensuring national food security through 2030.

– Decision No. 194/QĐ-TTg dated February 9, 2021, on innovating methods of trading and marketing agricultural products for 2021-2025, with orientations toward 2030.

– Decision No. 221/QĐ-TTg dated February 22, 2021, amending and supplementing Decision No. 200/QĐ-TTg dated February 14, 2017, approving the Action Plan to Enhance Competitiveness and Develop Logistics Services in Vietnam through 2025.

– Decision No. 531/QĐ-TTg dated April 1, 2021, approving the Overall Strategy for the Development of Vietnam’s Service Sector for 2021-2030, with a Vision to 2050.

– Decision No. 150/QĐ-TTg dated February 28, 2022, approving the Strategy for Sustainable Agricultural and Rural Development for 2021-2030, with a Vision to 2050.

Prof. Dr. Dang Dinh Dao

Link: https://thitruongtaichinhtiente.vn/phat-trien-he-thong-logistics-nong-nghiep-nong-thon-nham-gop-phan-thuc-day-tang-truong-nong-nghiep-viet-nam-ben-vung-58659.html

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