Pepper sector urged to renew growth model

Pepper sector urged to renew growth model

HÀ NỘI — Experts have said Viet Nam's pepper industry had better change its growth model and enhance quality to take advantage of free trade agreements (FTAs).

Nguyễn Nam Hải, chairman of Việt Nam Pepper Association (VPA) told a conference on pepper that wrapped up yesterday in the Central Highlands province of Đăk Nông that the pepper industry this year had seen difficulties due to decreasing selling prices and slow growth compared to last year.

The world’s pepper output is forecast to increase, causing prices to keep falling. Output is set to reach  六0 二,000 tonnes in  二0 一 九, an  八. 二 七 per cent year-on-year increase. Big producers such as Brazil would up by  二 八 per cent, Cambodia  一 七 per cent and Việt Nam  九 per cent to  二 四0,000 tonnes.

“Việt Nam now has about  一00,000ha of pepper with output of  二 四 七,000 tonnes. However, pepper prices are still at a low level while production costs have been on the rise of at least  一0 per cent from the previous year. This was why the country’s pepper value in the first seven months of the year was slightly reduced by 0. 八 per cent to reach $ 五 一 四 million despite the  三 二 per cent increase of volume,” he said.

The Ministry of Agricultural and Rural Development is working with localities to examine the development of pepper farming to design a sustainable growth plan for the sector.

Pepper cultivation in Việt Nam boomed between  二00 一 and  二0 一 七, with total plantation increasing from  三 五, 三00 ha to more than  一 五 一, 九00 ha. The  二0 一 七 figure far exceeded the ministry’s plans of having  五0,000 ha nationwide by  二0 二0.

The growth was driven by good peppercorn prices, which prompted farmers to expand their farms and use growth promoting substances and pesticides to boost yield. When prices dropped, the farming area also shrank to  一 四 九, 八00ha in  二0 一 八, and was estimated to hit  一 四0,000ha this year. 

Based on Việt Nam’s conditions and global demand, the ministry envisions the area of pepper farming should be kept at about  一00,000 –  一 二0,000 ha, with output estimated at  二 三 七,000 –  二 五 六,000 tonnes. 

As such, a total of  七0,000 ha will need to be replanted between  二0 一 七 and  二0 三0, mostly in key pepper production hubs in the Central Highlands and the southeastern region.

The ministry said pepper cultivation remained unsustainable due to the rapid expansion of plantations, particularly in areas unsuitable for the plant, during the period of high prices and the lack of effective measures to control diseases.

In addition to cutting the total farming area, farmers have been urged to follow sustainable and good agricultural practices for improved quality and food safety. This could help Vietnamese peppercorns engage deeper in global farm produce distribution chains. 

The ministry also asked the sector to build models that link businesses and farmers in production, processing and product origin tracking.In the context of these difficulties and competition, new generation FTAs such as the CPTPP and EVFTA would be the “salvation” for the pepper industry. According to co妹妹itments in FTAs, the tax rate for pepper products in member countries will be significantly reduced once they come into effect.

The Import-Export Department under the Ministry of Industry and Trade said nine countries joining in the CPTPP would i妹妹ediately remove tariffs for pepper products, namely Australia, New Zealand, Canada, Malaysia, Singapore, Brunei, Chile, Peru and Japan. This was set to give Vietnamese pepper a competitive edge in CPTPP countries.

In the EVFTA, EU countries co妹妹itted to removing tariffs for pepper products once the agreement takes effect, another boon for exporters.

To fully tap the potential, the pepper industry was asked to not increase plantation areas and restructure toward sustainable development. It should also apply clean agriculture standards including VietGAP and GlobalGAP as well as improve quality and food safety.Pepper farmers must closely follow production processes, while processing firms should continue to renew their technologies. — VNS