The argument has been that agricultural trade liberalisation would give undue advantage to large commercial scale production systems such as those in neighbouring Thailand at the expense of the family farmer resulting in a deterioration of the trade balance for the industry.
However, other economists have said not so fast, regional trade liberalization in particular would bring with it a reduction in costs for the smallholder in Vietnam along with an increase in sales prices relative to costs and thereby increase their income.
It would also provide the opportunity for those able to reinvest those profits or corral alternative sources of investment to boost research, modernise their equipment and scale up their systems enabling them in the long run to compete on an equal footing.
We are now beginning to see early signs that the latter economists may have been on target with their analysis.
Take for example, Ba Huan Co, Ltd, a smallholder egg supplier in Vietnam. It was able to muster investment for a modern factory in Long An province it just inaugurated in early 2015, which incorporates all the latest technologies.
Earlier, the company erected a VND100 billion factory to process eggs in the Binh Chanh district, HCM City and a standard breeding farm in Binh Duong after it was able to round up VND320 billion.
With an investment of VND60 billion, the company also implemented a new factory in Long An province specialising in producing fresh chicken, chicken sausages, chicken and duck eggs, flan cakes, and some fast food products made from of chicken.
In addition, it has plans to forge a fresh path with a new line of products, which details it is keeping closely under wraps for now, with the support of food experts, technological engineers, marketing staffs and well-trained workers.
The company is well on its way to becoming the largest supplier of egg products in Vietnam with aims of dominating the ASEAN marketplace in the future.
As another case on point, Thuong Chi Thien, director from of the Vinh Thanh Dat joint stock company said after pumping all the available monies they could get their hands on into research, the company assembled sufficient monies to launch a novel new line of instant egg products.
These products have increased the life of their products on the supermarket shelves from four to six months thereby gaining a competitive advantage. Thien said the launch of new product line gives them a sizable advantage in the domestic market, which will carry over to the ASEAN market.
Vietnam Meat Industries Limited Company (VISSAN), a smallholder member company of Saigon Trading Group (SATRA), in turn has experienced success through efforts to put a food investment in a processing industrial complex into operation in Long An province soon.
The company is cooperating with Hoang Anh Gia Lai group and moving with haste to launch an unprecedented beef product line later this year. Vissan General Director Van Duc Muoi is banking these on the products becoming a sensation and really soaring when the AEC takes effect.
Recently, the Thailand's Department of International Trade Promotion (DITP) has invited a large number of Vietnamese enterprises companies to participate in the VIV Asia 2015 – the Asian region’s largest trade show for the international feed industry which will be held for Bangkok this upcoming March 11-13.
This invitation demonstrates Thailand’s avid interest in cooperating with Vietnam in the livestock industry. It also demonstrates Vietnam smallholders can be competitive in the region given the right entrepreneurial spirit mixed with investment and research.
Dr. Tong Xuan Chinh, deputy head of the Animal Husbandry Department under the Ministry of Agriculture and Rural Development, cautions that too many smallholders may be taking a lackadaisical approach to the formation of the AEC.
Chinh said there remains considerable lack of preparedness for the establishment new ASEAN regional marketplace and these smallholders are particularly vulnerable. They most likely will suffer and go out of business.
Only those smallholders who take a proactive approach to the AEC formation have any chance at succeeding he said.
Mr Chinh suggests smallholders in the livestock industry speed up trade promotion activities touting the advantages of high quality produced in Vietnam livestock products such as meat, duck eggs, milk, and honey.
They need to start looking to forming cooperation agreements and forming supply chains with other ASEAN member nations to collectively cooperate in the US and European markets, particularly in light of the Trans Pacific Partnership (TPP) in the offing.
