Transparency in land-use information

This is the most difficult issue for businesses, as many farming households do not have land-use rights certificates for the plots they currently use and therefore face numerous legal issues in land use and implementing traceability.

Implementing traceability, geolocating individual farms, and providing information on the entire supply chain require substantial expenditure and joint efforts by many stakeholders.

However, the EU regulation against deforestation clearly reflects an inevitable global consumption trend. Vietnam needs to shift from a passive stance to proactive adaptation and regard this as an opportunity to restructure commodity sectors toward sustainability standards. Therefore, I believe that, to adapt proactively, we need to address several important issues immediately in 2024, including:

First, implement technical solutions. Ministries, agencies, and stakeholders need to continue updating, improving, developing, and recognizing national databases on forest information systems and production-area information systems, resolving legal issues in land use, and implementing traceability.

Second, develop a public-private cooperation framework for EUDR implementation. Promote the development of public-private partnerships (local authorities, commodity associations, businesses, and international organizations) for sectors affected by the EUDR to share resources for database development, information sharing, and supply chain transparency.

Third, strengthen communication and advocacy for compliance with the EUDR. This is also very important because the EUDR must be communicated and disseminated to regulatory agencies at all levels and actors in commodity value chains. Technical guidelines must also be developed for commodity sectors to meet and comply with requirements when producing, trading, and exporting agricultural products.

Fourth, mobilize resources to implement EUDR requirements. Implementing traceability, geolocating individual farms, and providing information on the entire supply chain require substantial expenditure and joint efforts by many stakeholders, including (i) mobilizing resources from central and local government budgets to support commodity value chains, and (ii) mobilizing financial and technical support from international organizations and the private sector to help commodity value chains adapt to the EUDR.

Another important point is the need to establish and operate a mechanism for dialogue and negotiation with the EU and its member states on the EUDR to exchange information in both directions and discuss how to address issues arising during implementation.

Implementing the EUDR is part of the EU’s efforts to combat deforestation to reduce greenhouse gas emissions and tackle climate change under the Green Deal. Beyond the EU, other important export markets for Vietnam, such as the United States, the United Kingdom, and Japan, are also studying legislation similar to the EUDR. Meeting EUDR requirements effectively will also help businesses meet similar requirements in key export markets. In light of the difficulties outlined above, I offer the following recommendations to commodity associations and businesses:

First, proactively learn about and fully understand the requirements, stay up to date on EUDR regulations and guidance, and cooperate with and proactively share information on the current state of supply chains with EU importers to identify solutions for changing and adjusting existing supply chains.

Second, proactively review existing supply chains by working closely with stakeholders in the chain (networks of private traders, farming households, and supplier systems) who supply raw materials to businesses, to trace their origins and the locations of production plots. This will enable businesses to assess shortcomings and risks, identify and develop short- and long-term solutions, and provide information to stakeholders.

Third, businesses should consider reorganizing and shortening their supply chains and formalizing transactions by promoting links between businesses and farming households or groups of farming households. This will help farming households receive appropriate benefits and address labor-related requirements in the future.

Fourth, businesses should prioritize developing legal, sustainability-certified raw material supply chains; limit raw material imports from at-risk areas; and, where possible, proactively develop their own sustainable raw material growing areas.

Fifth, work closely with regulatory agencies, ministries, other government agencies, local authorities, and farming households to develop shared databases for traceability and provide information on the sector’s supply chains.

Policy recommendations

Appropriate mechanisms, policies, and laws are needed to address this legal issue and ensure the legality of plots used to cultivate commodities.

Regarding policy, I offer the following suggestions: First, concerning the origins and legality of cultivated land, a substantial proportion of farming households currently lack land-use rights certificates (red books) or face issues related to cultivated land. Therefore, appropriate mechanisms, policies, and laws are needed to address this legal issue and ensure the legality of plots used to cultivate commodities; regulations on growing-area codes and determining plot coordinates must also be amended and supplemented. On this basis, localities should accelerate the issuance of land-use rights certificates.

Second, regarding supply chains, policies are needed to promote and strengthen production links between businesses and farmers, cooperative groups, and cooperatives; closely connect actors throughout the supply chain, from its starting point to its endpoint, to ensure that raw materials entering the supply chain are grown and produced on land not associated with deforestation or forest degradation; and make intermediate stages in the chain transparent.

Third, policies are needed to provide financial and technical support to farmers cultivating land near forests or along forest edges, where there is a high risk of deforestation or forest degradation, to transition to alternative livelihoods and adopt sustainable farming models; and to support businesses in developing databases and providing the information necessary to meet regulatory requirements.

Dr. Le Huy Huan, Lecturer at National Economics University (NEU)