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Working Paper

VIET NAM FISHERIES AND AQUACULTURE MARKETING STUDY

Ole Saugmann Rasmussen Fishering Marketing Expert, OSR Consulting Tran Cong Ich Fisheries Marketing Expert, OSR Consulting

June 2005

This document was prepared for the World Bank. In collaboration with FAO, this is a joint cooperative Programme with the Bank under the Asia and Pacific Ser-vice.

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Table of Contents

1 Tãm t¾t b¸o ço chÝnh thøc 1 1.1 Môc tiªu nghiªn cøu 1 1.2 1.2. Bèi c¶nh vμ hiÖn tr¹ng 1 1.3 Çc −u tiªn ph¸t triÓn 2

1.4 Çc ®Ò xuÊt 3

1 Executive summary 5 1.1 Objectives 5 1.2 Background and status 5 1.3 Development priorities 6 1.4 Recommendations 7

2 Introduction 10

3 The fisheries and aquaculture sector 12 3.1 The role in the economy 12 3.2 The capture and aquaculture production 12 3.3 The fisheries and aquaculture marketing system 14 3.4 Public sector involvement 19 3.5 Non Governmental Organisations 20

4 The domestic market 22 4.1 The domestic marketing system 22 4.2 Prices and price formation 25 4.3 Marketing information 26 4.4 Consumption 27

5 The export market 29 5.1 The raw material market 30 5.2 Transport and cold chain for export 33 5.3 Export 35

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5.4 Trade relations 36

6 Quality and quality control 39 6.1 Present situation 39 6.2 The control system 41

7 Governmental policies and assistance 43 7.1 The policy area 43 7.2 The regulations 44 7.3 WTO accession 45

8 Market development needs 48 8.1 Wholesale market systems 48 8.2 Governmental policy 49 8.3 The domestic market 50 8.4 Export marketing 50 8.5 Monitoring systems 50 8.6 Credit 51

9 Development priorities and recommendations 52 9.1 The raw material market 52 9.2 The domestic market 55 9.3 The export market 56 9.4 Governmental policy and support 57 9.5 Programmes assisting in the area 59 Annexes: Annex 1: Minutes of Interim Meeting........................................................................... 60 Annex 2: Capture and Aquaculture Production .......................................................... 65 Annex 3: Wholesale Markets in Viet Nam.................................................................... 66 Annex 4: Export of Aquatic products............................................................................ 77 Annex 5: Reference Documents ...................................................................................... 86 Annex 6: Important legal documents ............................................................................. 88

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List of abbreviations ACIAR Australian Centre for International Agricultural Research ADB Asian Development Bank AusAid Australian Aid CIT US Court of International Trade DANIDA Danish International Development Agency DOC United States Department of Commerce DOT Department of Trade EU European Union FAO Food and Agriculture Organization of the United Nations FICEN Fisheries Informatics Centre FSPS Fisheries Sector Program Support (DANIDA/MOFI) GMP Good Manufacturing Practice GTZ Deutsche Gesellschaft für Technisce Zusammenarbeit (German aid) HACCP Hazard Analysis Critical Control Points ITC United States International Trade Committee MOFI Ministry of Fisheries MOH Ministry of Health MOT Ministry of Trade MPI Ministry of Planning and Investment NAFIQAVED National Fisheries Quality Assurance and Veterinary Directorate NGO Non Governmental Organisation RIA Research Institute for Aquaculture SOE State Owned Enterprises SEAQIP Seafood export & quality improvement programme (Part of FSPS) SIDA Swedish International Development Support SIRED Support to Industrial Restructuring and Enterprise Development (Part of FSPS) SOE State Owned Enterprise SPS Sanitary and Phyto-Sanitary Measures SSOP Sanitation Standard Operation Procedures TBT Technical Barriers to Trade UNDP United Nations Development Program VASEP Vietnam Association of Seafood Exporters and Processors VIFEP Vietnamese Fisheries Economic and Planning Institute WB World Bank WSD White Spot Decease VINAFIS Vietnam National Association of Fisheries WTO World Trade Organization

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1 Tãm t¾t b¸o ço chÝnh thøc

1.1 Môc tiªu nghiªn cøu Hai môc tiªu chÝnh cña nghiªn cøu tiÕp thÞ (Marketing) thuû s¶n lμ: (i) §¸nh gi¸ hiÖn tr¹ng bao gåm çc chÝnh s¸ch vμ tiÕp thÞ çc s¶n phÈm (nu«i trång vμ ®¸nh b¾t) thuû s¶n; (ii) X¸c ®Þnh çc nhu cÇu cÇn thay ®æi tõ ®ã ®Ò xuÊt n©ng cÊp vμ ®Çu t−.

1.2 1.2. Bèi c¶nh vμ hiÖn tr¹ng Ngμnh thuû s¶n ViÖt nam ®· ph¸t triÓn m¹nh trong suèt 10 n¨m qua, t¸c ®éng ®Õn kho¶ng 4 triÖu d©n vμ ®ãng gãp gÇn 3% GDP. C«ng t¸c tiÕp thÞ thuû s¶n ®· ®−îc coi träng. Thuû s¶n lμ nguån cung cÊp ®¹m ®éng vËt chñ yÕu cho ng−êi d©n vμ nhu cÇu tiªu thô ®ang t¨ng lªn. ChÝnh phñ ®· cã chÝnh s¸ch tËp trung −u tiªn ph¸t triÓn xuÊt khÈu thuû s¶n, kÕt qu¶ ®Õn n¨m 2004 gi¸ trÞ thuû s¶n xuÊt khÈu ®¹t ®−îc kho¶ng 2,3 tØ USD vμ lμ ngμnh xuÊt khÈu ®øng thø 3 chiÕm 12% xuÊt khÈu chung c¶ n−íc.

1.2.1 ThÞ tr−êng thuû s¶n néi ®Þa:

§©y lμ thÞ tr−êng rÊt quan träng, hÇu hÕt çc s¶n phÈm thuû s¶n tiªu thô t¹i néi ®Þa. Tuy nhiªn thÞ truêng nμy cßn Ýt ®−îc chó ý, çc tiªu chuÈn s¶n phÈm còng nh− çc ®iÒu kiÖn cho thÞ tr−êng cßn nghÌo nμn.

1.2.2 ThÞ tr−êng xuÊt khÈu

XuÊt khÈu thuû s¶n lμ −u tiªn hμng ®Çu cña chÝnh phñ, xuÊt khÈu thuû s¶n ®· ph¸t triÓn rÊt nhanh ®¹t tíi møc gÇn 2,5 tØ USD mét n¨m mÆc dï ph¶i ®èi mÆt víi nh÷ng khã kh¨n vÒ rμo c¶n chèng b¸n ph¸ gi¸ cña MÜ vμ d− l−îng kh¸ng sinh cña EU. VÒ nguyªn liÖu ngμnh thuû s¶n cßn phô thuéc nhiÒu vμo m¹ng l−íi nËu vùa, chØ cã phÇn nhá ®−îc mua b¸n trùc tiÕp kh«ng qua nËu vùa. Tíi nay çc chî b¸n bu«n nguyªn liÖu thuû s¶n vÉn ch−a ho¹t ®éng.

Môc tiªu chÝnh cña nghiªn cøu nμy lμ ®¸nh gi¸ hiÖn tr¹ng vμ x¸c ®Þnh çc nhu cÇu cÇn c¶i thiÖn.

TiÕp thÞ çc s¶n phÈm thuû s¶n ®· ph¸t triÓn m¹nh trong suèt 10 n¨m qua

PhÇn lín thuû s¶n tiªu thô t¹i thÞ tr−êng néi ®Þa

Nh×n chung xuÊt khÈu thuû s¶n ho¹t ®éng tèt mÆc dï ph¶i ®èi mÆt víi çc sù kiÖn chèng b¸n ph¸ gi¸ vμ d− l−îng kh¸ng sinh

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1.2.3 ChÊt l−îng vμ kiÓm tra chÊt l−îng

Trong suèt m−êi n¨m qua ®· ghi nhËn nh÷ng b−íc n©ng cÊp vÒ chÊt l−îng thuû s¶n ViÖt nam. Çc tiªu chuÈn ®−îc x©y dùng vμ thùc hiÖn cïng víi mét hÖ thèng kiÓm tra chÊt l−îng cã uy tÝn cña chÝnh phñ. Tuy nhiªn c«ng t¸c chÊt l−îng míi tËp trung cho xuÊt khÈu, nhÊt lμ kiÓm tra cÊp giÊy phÐp xuÊt khÈu cho çc nhμ m¸y chÕ biÕn, phÇn cßn l¹i vÉn ch−a ®−îc chó träng ®óng møc.

1.2.4 Çc chÝnh s¸ch vμ hç trî cña ChÝnh phñ

ChÝnh s¸ch vμ hç trî cña ChÝnh phñ chñ yÕu míi tËp trung vμo kh©u ph¸t triÓn ®¸nh b¾t, nu«i trång vμ xuÊt khÈu thuû s¶n vμ ®· thu ®−îc nh÷ng thμnh c«ng to lín. Tuy nhiªn cÇn ph¸t triÓn çc chÝnh s¸ch vμ luËt ph¸p c¬ b¶n, n©ng cÊp çc luËt ph¸p hiÖn t¹i, x©y dùng çc tiªu chuÈn s¶n phÈm...®Ó t¹o ra c¬ së tèt nhÊt cho sù ph¸t triÓn.

1.3 Çc −u tiªn ph¸t triÓn Trong qu¸ tr×nh nghiªn cøu ®· x¸c ®Þnh mét sè lÜnh vùc cÇn ®−îc tá chøc thùc hiÖn lμ:

• ThÞ tr−êng nguyªn liÖu • ThÞ tr−êng tiªu thô néi ®Þa • ThÞ tr−êng xuÊt khÈu • ChÝnh s¸ch vμ hç trî cña ChÝnh phñ.

1.3.1 Kinh doanh nguyªn liÖu

CÇn thiÕt lËp mét hÖ thèng thÞ tr−êng nguyªn liÖu thuû s¶n minh b¹ch ®Ó tõ ®ã sÏ h×nh thμnh møc gi¸ thÞ tr−êng cña çc s¶n phÈm. §iÒu nμy cã thÓ thùc hiÖn b»ng çch x©y dùng çc chî b¸n bu«n/ ®Êu gi¸; T¹i ®©y nguyªn liÖu thuû s¶n ®−îc ng−êi s¶n xuÊt lμ ng− d©n, n«ng d©n vμ c¶ nËu vùa b¸n vμ ng−êi chÕ biÕn, nhμ xuÊt khÈu vμ ng−êi b¸n lÎ ®Õn mua. H×nh thμnh hÖ thèng chî b¸n bu«n nguyªn liÖu thuû s¶n sÏ lμm cho c«ng viÖc kinh doanh, th«ng tin gi¸ c¶ trë nªn râ rμng, biÕt ®−îc nguån gèc vμ h−íng sù ph¸t triÓn ngμnh theo thÞ tr−êng.

§Ò xuÊt cÇn thiÕt kÕ vμ thùc hiÖn mét m¹ng l−íi chî nguyªn liÖu thuû s¶n ë ViÖt nam vμ cÇn thùc hiÖn mét dù ¸n thö nghiÖm, dù ¸n nμy sÏ ®Çu t− vμ hç trî kÜ thuËt ®Ó x©y dùng mét hoÆc hai chî nguyªn liÖu thuû s¶n ®Ó rót kinh nghiÖm vμ më réng thμnh m¹ng l−íi chî nguyªn liÖu thuû s¶n .

1.3.2 ThÞ tr−êng thuû s¶n néi ®Þa.

CÇn n©ng cÊp s¶n phÈm, hÖ thèng thÞ tr−êng bao gåm tõ kh©u vËn chuyÓn ®Õn çc cöa hμng b¸n thuû s¶n néi ®Þa. §Ò xuÊt lμ ®èi víi thÞ tr−êng néi ®Þa tr−íc tiªn ChÝnh phñ cÇn x©y dùng vμ ¸p dông çc tiªu chuÈn s¶n phÈm vμ thÞ tr−êng b¸n lÎ. Huy väng thùc hiÖn viÖc n©ng cÊp nh×n chung çc thμnh phÇn kinh tÕ t− nh©n sÏ tù lμm ®−îc.

Çc tiªu chuÈn vμ viÖc qu¶n lÝ chÊt l−îng thuû s¶n phôc vô cho xuÊt khÈu ®ang ®−îc duy tr× nh−ng trong tiªu thô néi ®Þa cßn h¹n chÕ.

ChÝnh phñ tËp trung chñ yÕu cho xuÊt khÈu. Khung luËt ph¸p cho néi ®Þa cßn thiÕu

CÇn thiÕt lËp mét hÖ thèng thÞ tr−êng nguyªn liÖu thuû s¶n minh b¹ch- §Ò xuÊt x©y dùng mét m¹ng l−íi chî b¸n bu«n thuû s¶n.

CÇn ph¸t triÓn hÖ thèng thÞ tr−êng thuû s¶n néi ®Þa

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CÇn tiÕp tôc ph¸t triÓn xuÊt khÈu thuû s¶n ViÖt Nam tËp trung vμo çc s¶n phÈm gi¸ trÞ gia t¨ng vμ x©y dùng çc mèi quan hÖ kinh doanh l©u dμi, n©ng cao kiÕn thøc thÞ tr−êng, x©y dùng khung ph¸p luËt phï hîp. ChÝnh phñ x©y dùng hÖ thèng ph¸p luËt, huy väng r»ng ngμnh kinh tÕ thuû s¶n sÏ tù ph¸t triÓn ®−îc.

1.3.4 ChÝnh s¸ch vμ hç trî cña ChÝnh phñ

CÇn ph¸t triÓn çc chÝnh s¸ch cña ChÝnh phñ trong lÜnh vùc kinh doanh nguyªn liÖu, thÞ tr−êng néi ®Þa, thÞ tr−êng b¸n bu«n, tiªu chuÈn cña s¶n phÈm... t¹o ra c¬ së tèt nhÊt ®Ó ph¸t triÓn ngμnh. Sù dem thi hμnh ph¸p luËt hiÖn cã trong mäi lÜnh vùc lμ yÕu tè cÇn thiÕt.

1.4 Çc ®Ò xuÊt Trong 4 lÜnh vùc nªu trªn cã çc ®Ò xuÊt cho tõng lÜnh vùc lμ:

1.4.1 1.4.1. Kinh doanh nguyªn liÖu:

Trong 4-5 n¨m tiÕp theo nªn thùc hiÖn:

• X©y dùng mét chî b¸n bu«n/ ®Êu gi¸ thuû s¶n t¹i CÇn Th¬. Qui m« chî lμ kho¶ng 300.000 MT/n¨m. Tæng ®Çu t− kho¶ng 15 triÖu USD1

• X©y dùng mét chî b¸n bu«n/ ®Êu gi¸ thuû s¶n t¹i Nha Trang hoÆc Phó Yªn. Qui m« chî lμ kho¶ng 50,000MT / n¨m. Tæng ®Çu t− kho¶ng 3,5 triÖu USD

Trong vßng 10 n¨m tiÕp theo nªn thùc hiÖn:

• ë khu vùc miÒn Nam nªn x©y dùng çc chî b¸n bu«n/ ®Êu gi¸ thuû s¶n víi c«ng suÊt kho¶ng 1,5 triÖu tÊn mét n¨m, vèn ®Çu t− kho¶ng 75 triÖu USD

• ë khu vùc miÒn Trung nªn x©y dùng çc chî b¸n bu«n/ ®Êu gi¸ víi c«ng suÊt kho¶ng 0,5 triÖu tÊn thuû s¶n mét n¨m víi ®Çu t− kho¶ng 25 triÖu USD .

• ë khu vùc miÒn B¾c nªn x©y dùng çc chî b¸n bu«n/ ®Êu gi¸ víi c«ng suÊt kho¶ng 0,5 triÖu tÊn thuû s¶n mét n¨m víi ®Çu t− kho¶ng 25 triÖu USD .

1.4.2 ThÞ tr−êng néi ®Þa

Trong thêi gian gÇn nhÊt nªn thùc hiÖn:

1 Chi phÝ íc tÝnh dùa trªn sè liÖu chî ç B×nh §iÒn TP. Hå ChÝ Minh. Xem phô lôc 7 : kho¶ng 100TriÖu USD cho s¸u khu chî cã têng bao mçi chî 2ha. TÝnh ra kho¶ng 7,5 triªUSD/ ha

Nh×n chung xuÊt khÈu thuû s¶n ®· ph¸t triÓn tèt nh−ng hiÖn vÉn cßn nhiÒu kh¶ n¨ng ®Ó tiÕp tôc ph¸t triÓn

ThiÕu chÝnh s¸ch trong lÜnh vùc ph¸t triÓn kinh doanh nguyªn liÖu vμ thÞ tr−êng néi ®Þa.

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• So¹n th¶o tiªu chuÈn chi tiÕt cho hÇu hÕt çc lo¹i s¶n phÈm thuû s¶n th−êng

dïng gåm çc tiªu chuÈn vÒ kÝch cì vμ chÊt l−îng ç.

• Ap dông çc tiªu chuÈn ban hμnh cho çc nhμ m¸y chÕ biÕn xuÊt khÈu cho tÊt c¶ çc nhμ m¸y chÕ biÕn.

• Ph¸t triÓn vμ thùc hiÖn çc tiªu chuÈn cho çc chî b¸n bu«n/ ®Êu gi¸ gåm c¶ GMP, HACCP vμ SSOP.

Trong thêi gian 10 n¨m tiÕp theo nªn thùc hiÖn:

• Çc tiªu chuÈn cho toμn bé çc lo¹i s¶n phÈm thuû s¶n

• Çc tiªu chuÈn cho vËn chuyÓn thuû s¶n néi ®Þa


Ngμnh kinh tÕ thuû s¶n sÏ tù ph¸t triÓn kh«ng cÇn bÊt cø sù can thiÖp nμo cña chÝnh phñ ngo¹i trõ sù can thiÖp vÒ ChÝnh s¸ch. ChÝnh phñ nªn :

• Cμng sím cμng tèt kh«ng tham gia cô thÓ trong çc ho¹t ®éng cña c«ng ty thuû s¶n.

1.4.4 ChÝnh s¸ch vμ hç trî cña ChÝnh phñ

Trong vßng 1-5 n¨m tíi:

• NhiÖm vô qu¶n lÝ nhμ n−íc vÒ çc chî b¸n bu«n / ®Êu gi¸ vμ vËn chuyÓn s¶n phÈm thuû s¶n nªn chuyÓn giao tõ Bé Y TÕ sang NAFIQAVED

• LuËt thuÕ cã hiÖu lùc ¸p dông cho tÊt c¶ çc thÞ tr−êng.

• Ph¸t triÓn vμ thùc hiÖn luËt lÖ cho çc chî b¸n bu«n/ §Êu gi¸

ChÝnh phñ tiÕp tôc çc c«ng viÖc:

• Ph¸t triÓn vμ n©ng cÊp çc chÝnh s¸ch cho ngμnh thuû

s¶n bao gåm c¶ thÞ tr−êng néi ®Þa.

• §iÒu chØnh chÝnh s¸ch phï hîp víi çc luËt ph¸p Quèc tÕ

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1 Executive summary

1.1 Objectives The Fisheries and Aquaculture Marketing Study has two main objectives: (i) to review and document the current status for marketing of fisheries and aquaculture products including the policy area and (ii) to identify opportunities for improvement and in-vestment needs including an assessment of the consequences of the proposed im-provements.

1.2 Background and status The Vietnamese fisheries and aquaculture sector has developed significantly during the last decade. It is estimated that up to four million people are engaged in the sector which accounts for approximately 3% of the GDP. With respect to marketing the de-velopment has also been remarkable. On the domestic market, aquatic products are the most important protein source and the consumption is increasing. Export of aquatic products has been given a high priority from the government and this has re-sulted in an export in 2004 of approximately 2.3 billion USD, which is the third most important export accounting for approximately 12% of the total export.

1.2.1 The domestic market

The domestic market is very important for the Vietnamese fisheries and aquaculture sector as most of the catch and aquaculture production is consumed on the domestic market. However, little attention is given to the market, and the product standards as well as the market conditions are poor.

1.2.2 The export market

Development of the export of aquatic products has been a key priority for the gov-ernment of Viet Nam and the export has increased rapidly to a level close to 2.5 bil-lion USD a year, despite the industry facing difficulties with anti-dumping cases in the US and problems with antibiotic residues in products exported to the EU market. With respect to the raw material, the industry depends on a network of wholesalers and only small amounts are purchased directly from the producers. No wholesale markets for raw material are at present in operation.

The main objectives of the study are to document the current status and identify need for improve-ment

Marketing of fisheries and aquaculture products has devel-oped extensively dur-ing the last 10 years

Most fisheries and aquaculture products are consumed in Viet Nam

The export sector is in general in good health even though it has faced anti-dumping measures and problems with antibiotic residues

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1.2.3 Quality and quality control

During the last ten year, a number of steps have been taken in order to upgrade the quality of fisheries and aquaculture products in Viet Nam. Standards have been devel-oped and implemented together with a public control and authorisation system. The main focus has been on the export component of the sector, in particular the process-ing plant that is licensed for export, leaving other components behind.

1.2.4 Governmental policies and assistance

The governmental policy and support has mainly been focusing on increasing the fisheries and aquaculture production and the export of aquatic products have been very successful in this. The government's policy and support has focused on increas-ing the export of aquatic products and have experienced significant success. However, governmental policy and basic legislation as well as the updating of existing legislation, development of product standards, etc. needs to be developed in order to give the sector the best possible framework for development.

1.3 Development priorities During the study a number of development needs have been identified, which can be organised around the following areas:

• The raw material market; • The domestic market; • The export market; • Governmental policy and support

1.3.1 Trading of raw material

There is a need for the establishment of a transparent marketing system for raw mate-rials that results in the establishment of a market price for the products. This can be achieved through the establishment of wholesale markets/auctions where fisheries and aquaculture products can be sold by the producer as well as the wholesaler and where processors, exporters and retailers can carry out purchasing. Establishment of a wholesale market system for raw materials will make the trading and price information traceable and ensure the development of a market driven sector.

It is recommended that a net of raw material markets in Viet Nam are designed and implemented. The methodology recommended would be a pilot project approach in-volving investment and technical assistance in the setup of one or two raw material markets and gradually expanding the net of raw material wholesale market based op the experience gained.

Quality standards and inspection for export is in place but lacking for the remaining part of the sector

The main govern-mental focus has been on export. Lack of legal framework for domestic marketing

There is a need for establishment of a transparent marketing system for raw mate-rials - a net of whole-sale markets is rec-ommended

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There is a need for an improvement of the products as well as the marketing system including transportation and market outlets. The recommendation with respect to the domestic market involves mainly initiatives such as the development by government of standards for products and retail markets It is expected that the private industry in general would manage the implementation and upgrading themselves.


There is a need for development in the export oriented part of the fisheries and aqua-culture sector in Viet Nam. With respect to export of more high value products, es-tablishment of long-term business relations, increase the market knowledge, develop-ment of an appropriate legal framework. Besides the legal aspects it is expected that the industry itself will manage this development on its own without support.

1.3.4 Governmental policy and support

There is a need for the development of governmental policy regarding trade with raw materials and the domestic market. Legislation for wholesale markets, development of product standards etc. need to be developed in order to give the sector the best possi-ble framework for development. Enforcement of existing legislation in all areas is es-sential.

1.4 Recommendations The specific recommendations within the each of the four areas mentioned above is summarised as follows:

1.4.1 Trading of raw material

Within the next 1 – 5 years it is recommended that the following is implemented:

- Construction of a wholesale market/auction in Can Tho for fisheries and aquaculture products. The capacity should be 300,000 tons a year. The total investment costs are estimated to be around 15 million USD.2

- Construction of a wholesale market/auction in Nha Trang or Phu Yen province for fisheries and aquaculture products. The capacity should be 50,000 tons a year. The total investment cost is estimated to be around 3.5 million USD

Within the next 10 years it is recommended that the following is implemented:

2 The costs are estimated based on the construction costs for the Bien Dien market in Ho Chi Minh City, of approximately 100 million USD (see annex 7). This included 6 market halls of 2 ha each and all surrounding facilities, giving a price of approximately 7.5 million USD per ha.

There is a need for development of the domestic marketing system

The export oriented part of the sector is in general well devel-oped but there are still development possibilities

Lack of policy for trading with raw ma-terials and for the domestic market

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• In the south of Viet Nam construction of wholesale markets/auctions with a capacity of approximately 1.5 million tons fisheries and aquaculture products a year involving an investment of around 75 million USD;

• In the centre of Viet Nam construction of wholesale markets/auctions with a capacity of approximately 0.5 million tons fisheries and aquaculture products a year involving an investment of around 25 million USD;

• In the north of Viet Nam construction of wholesale markets/auctions with a capacity of approximately 0.5 million tons fisheries and aquaculture products a year involving an investment of around 25 million USD;


Within the nearest future the following activities are recommended:

• Elaborate standards for the most common fish and shellfish including size and quality grading standards;

• For the processing industry, the standards that are in force for companies that are exporting should be adopted and implemented by all processing companies;

• Development and implementation of standards for wholesale markets/auctions including GMP, HACCP and SSOP;

• Development and implementation of standards for retail markets including GMP, HACCP and SSOP;

Within the next 10 years the following standards should be implemented:

• Standards for all Vietnamese fish and shellfish products;

• Standards for domestic transport.


The industry should be responsible for the implementation of the changes themselves without any governmental interference with the exception of the policy area.

Within of governmental intervention, the following action should be carried out as soon as possible:

• The state should withdraw from all active participation in companies in the sec-tor.

1.4.4 Governmental policy and support

Within the next 1 – 5 years:

9

• The responsibility for wholesale markets/auctions and transportation of fisheries and aquaculture products are moved from MOH to NAFIQAVED;

• Enforce tax legislation in all market places;

• Develop and implement legislation for wholesale markets/auctions

Work that should continue to be the responsibility of the government:

• Development and upgrading of policy for the sector including the domestic mar-ket;

• Transposition of all changes in international laws in national law.

10

2 Introduction In 2004 the Ministry of Fisheries (MOFI) and The World Bank (WB) conducted a Fisheries and Aquaculture Sector Study. In the marketing area one of the main con-clusions was “An analysis of the overall fish-marketing situation is warranted, includ-ing an assessment over whether the wholesale sector needs to be strengthened to promote competition and increase demand for fish, particularly from more remote inland areas.”3

On this background FAO and the WB, in the beginning of 2005, decided to facilitate a Fisheries and Aquaculture Marketing Study to take place in March and April 2005. The objectives of the study being4:

• Document Government policies with regard to the marketing of fisheries and aquaculture products with specific recommendations on how these need to be improved and revised;

• Identify opportunities for improvement of the marketing fisheries and aquacul-ture products, including raw material as well as finished goods and lower and higher valued products, on the domestic and the export markets , including an analysis of wholesale marketing, its current limits and needs over the next 10 years;

• Identify the investment needs in the marketing chain, including the establishment or strengthening of “traceability” with regard to quality, that can improve the ef-ficiency and effectiveness of the fisheries and aquaculture sector and the quality of its products in coastal and inland areas over the next 10 years; and

• Assess the possible consequences of the proposed changes in the marketing chain with regard to how changes may affect availability of the full range of products for domestic and export needs over the next 10 years.

The Viet Nam Fisheries and Aquaculture Marketing Study were implemented by a team consisting of:

• Mr. Tran Cong Ich, Fisheries Marketing Expert; • Mr. Ole Saugmann Rasmussen, Fisheries Marketing Expert

3 Vietnam Fisheries and Aquaculture Sector Study, Final Report, Ministries of Fisheries and Aquaculture and The World Bank, February 17, 2005, p. iii. 4 The Terms of Reference for the study is found in annex 1.

Background

Objectives

Project team

11

This report is prepared based partly on existing studies5 and partly on the consultants' findings during the field trip in Viet Nam.6 An interim meeting took place on the 19th April 2005 with representatives from key ministries and departments as well as repre-sentatives from international donor organisations. At this meeting the consultants gave a presentation of their preliminary findings and these were discussed.7 The in-terim meeting thereby gave useful guidance for the consultants with respect to finali-sation of the report.

The project team wishes to express its sincere thanks to all persons that have contrib-uted to this study for their kind and valuable support.

It should be emphasised that the views and recommendations presented in this report are those of the project team and are not necessarily shared by the Government of Viet Nam, The World Bank or FAO.

Chapter three gives a short introduction to the Vietnamese fisheries and aquaculture sector and its role in the economy. Furthermore, the chapter includes an overall analy-sis of the fisheries and aquaculture marketing system. Finally, the chapter includes a description of the ministries and NGOs involved in the sector.

An analyse of the domestic market for fisheries and aquaculture products is found in chapter four, including an analyse of the marketing channels. Chapter five analyses the export markets for fisheries and aquaculture products from Viet Nam. The chapter, furthermore, includes an analysis of the raw material market.

Chapter six analyses the quality and quality control system for Vietnamese aquatic products. The governmental policy and assistance to the marketing of fisheries and aquaculture products is analysed in chapter seven.

An analysis of the market development needs is found in chapter eight and finally the development priorities and recommendations are outlined in chapter nine.

5 A list of reference documents is found in annex 9. 6 The visit programme is found in annex 3 and the list of persons met in annex 2. 7 The presentation from the interim meeting is found in annex 4 and the minutes of meeting in annex 5.

Methodology

Outline of the report

12

3 The fisheries and aquaculture sector The fisheries and aquaculture sector plays an important role in the Vietnamese society and has for decades been an important part of the economy.

3.1 The role in the economy It is estimated that approximately 4 million people generate a full or partial income from fisheries and aquaculture or related activities.8

The fisheries sector accounts for approximately 3% of the Vietnamese GNP and with respect to export it is the third biggest export item after oil and garment accounting for approximately 12% of the total export.9 The annual export of aquatic products is close to 2.5 billion USD, while the imports only account for around 100 million USD which are mainly raw materials for the processing industry.

3.2 The capture and aquaculture production In total the Vietnamese capture and aquaculture production grew from approximately 1 million tons in 1991 to approximately 3 million tons in 2004, a growth of 190%10.

Figure 3.2.1: Development in the capture and aquaculture production 1991 - 2004, in tons

8 Globefish: Fishery Industry Profile: Viet Nam volume 75, FAO 2004, p. 1 and 4. 9 Globefish: Fishery Industry Profile: Viet Nam volume 75, FAO 2004, p. 4. 10 Further details are given in annex 6.

Around 4 million people are employed in fisheries or related activities. The sector accounts for ap-proximately 3% of the GNP and 12% of the export earnings

The Vietnamese aquatic products pro-duction has increased by approximately 190% since 1991.

13

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1991 1993 1995 1997 1999 2001 2003

AquacultureCapture

Source: VASEP, see annex 6.

The capture as well as the aquaculture production has increased in the period from 1991 to 2004 without any major declines. While the increase in capture productions was approximately 170% the aquaculture production increased as much as 231%. In 1991 the aquaculture production accounted for approximately 33% of the total pro-duction while in 2004 it was approximately 38% of the production, showing the in-creased importance of the aquaculture sector

With regard to production, the southern part of Vietnam is by far the most important. In 1991, 60% of the total production came from this and in 2002 the figure was in-creased to 62%.

Figure 3.2.2: Distribution of total production (capture and aquaculture production among the three regions in Vietnam) 2002

20%62%

18%

North

Central

South

Source: VASEP Company.

In all parts of the country there are seasonal variations in the capture as well as the aquaculture production. In the south of Vietnam (from Ho Chi Minh City and south-

Aquaculture produc-tion is growing more than capture produc-tion.

The southern part of Vietnam accounts for more than 60% of the total Vietnamese aquatic products pro-duction.

14

wards) farming of black tiger takes place from April/May to December. In the central and northern part of Vietnam the season is shorter. The seasonal variations can be more than 100% from peak to lean season.

The total aquatic products production in Vietnam has increased substantially during the last ten years and this is also expected for the coming years.

Table 3.2.1: Expected development in the Vietnamese aquatic products production Category Option I Option II

2002 2005 2010 2005 2010

Gross Volume (T) 2,410,900 2,350,000 3,400,000 2,800,000 3,900,000

1 Aquaculture (T) 976,100 1,150,000 2,000,000 1,500,000 2,500,000

Freshwater aquaculture 600,000 870,000 750,000 1,150,000

Shrimp 225,000 420,000 300,000 400,000

Sea fish 56,000 200,000 100,000 300,000

Moluscs 185,000 380,000 250,000 500,000

Others 84,000 130,000 100,000 150,000

2 Catch (T) 1,434,800 1,200,000 1,200,000 1,300,000 1,400,000

Coastal 700,000 700,000 800,000 700,000

Off shore 500,000 500,000 500,000 700,000

Species:

Fish 1,100,000 1,100,000 1,100,000 1,230,000

Cuttlefish, Octopus 70,000 70,000 140,000 120,000

Shrimp 30,000 30,000 60,000 50,000

3 Export turnover (USD million) 2,023 3,000 4,500 3,500 5,000

Source: Fishery Planning Economic Institute

The Fishery Planning Economic Institute operates with two options for the future development both resulting in increased production as well as export. It is predicted that the main increase will come from the aquaculture production.

3.3 The fisheries and aquaculture marketing system This section gives a short general description of the marketing system for fisheries and aquaculture products in Viet Nam. More details on the domestic market and the ex-

The aquatic products production is ex-pected to continue its increase

15

port market are found in the two following chapters. A general overview of the distri-bution channel is given in figure 3.5.111.

Figure 3.5.1: Marketing channels for fisheries and aquaculture products in Viet Nam

Fisherfolk and Aquaculturists

Processors Wholesalers(middlemen)

RetailersExport

Institutionalconsumers

Final household consumption

3.3.1 Fisherfolk and aquaculturists

The first involved in the marketing chain are the fishermen and aquaculture produc-ers. The group is inhomogeneous but in general it can be divided into the following groups:

• Inland fishermen and freshwater fish farmers: These are normally operated at household level and the catch or aquaculture production is limited. The fisheries or aquaculture activities are normally combined with other activities i.e. farming. The fish are normally sold to wholesaler and/or in some cases directly on the market by the family itself.

• Marine fishermen: The main part of the marine fishery is operated at household level. However, the development of offshore fishery has led to the establishment of companies, joint-ventures and cooperatives operating in the marine fishery. Most of the fishermen sell their catch to wholesalers and in many cases the

11 Based on FAO: Fish marketing and credit in Vietnam, FAO 2004.

The marketing chan-nels

Fishermen and aqua-culture producers are the first actors in-volved in the market-ing chain

16

wholesalers are paying up front and thereby to some degree financing the fishery operation.12

• Marine and brackish fish farmers: The main part of fish and shrimp farming is small scale operation operated by households. These are all selling to middlemen. Larger operations have been established during the later years especially within shrimp farming and several companies, joint-ventures and cooperatives are now operating. These are also selling directly to fish processors. Many of the marine and brackish water fish farmers are receiving payment up front from the mid-dlemen or from the fish processors.

3.3.2 Wholesalers

In Viet Nam, wholesalers, often referred to as middlemen, play an important role in the fish marketing system. A wholesaler may operate at various levels and undertake various functions. There are four main types of wholesalers: first wholesaler, interme-diate wholesaler, last-stage wholesaler, and multifunctional wholesaler:

• The first wholesaler is the one who has the additional functions of collection and brokerage. The first wholesalers collect normally raw material from a wide range of fishermen and fish farmers and the amount varies from a few kilo to several tons. Some of the first wholesalers operate collecting vessels that are collecting directly on the fishing ground allowing the fishermen to continue their fishing operation;

• The intermediate wholesaler operates with a pure wholesaling function, whose partners are mainly the other types of wholesaler and fish processors;

• The last-stage wholesaler specialises in supplying fish to retailers and institutional consumers;

• The multifunctional wholesaler may take various marketing functions at the same time. They could act as collector, broker, wholesaler and retailer simultaneously. Normally, the multifunctional wholesaler directly purchases fish from the pri-mary producer and also directly distributes to retailer, institutional consumer, and household consumer. Some of the multifunctional wholesaler is furthermore in-volved in export.13

12 According to the information given to the team during their field visits, 20 - 50% of the ex-pected catch value is normal but there are great variations. Some of the wholesalers inter-viewed by the project team even had shares in the fishing vessels supplying them. 13 A wholesaler interviewed in Thoi Thuan village Can Tho province was exporting live fish to Taiwan. A wholesaler interviewed in Nha Trang was purchasing tuna from the local fisher men. The wholesaler graded the fish and exported the ones having the necessary quality, fresh to the Japanese market. The remaining tuna was then processed as salary work on a local proc-essing plant and then exported by the wholesaler.

The wholesalers in the Vietnamese fish-eries and aquaculture sector can be divided into: first wholesaler, intermediate whole-saler, last-stage wholesaler, and multi-functional wholesaler

17

As described in the previous section, many wholesalers are financing the operation of the fishermen and fish farmers, making them very dependent on the wholesaler.

A survey undertaken by FAO gives the following distribution among the four catego-ries of wholesalers.

Table 3.3.2.1: Classification of wholesalers by marketing function and region in % Northern

Viet Nam Central

Viet NamSouthern Viet Nam

Total

First wholesaler 7.4% 32.2% 23.3% 20.1%Last wholesaler 36.4% 35.6% 26.7% 32.1%Pure wholesaler 16.5% 23.0% 44.7% 29.9%Multifunctional whole-saler

39.7% 9.2% 5.3% 17.9%

Total 100.0% 100.0% 100.0% 100.0%Source: FAO: Fish marketing and credit in Viet Nam p. 40

The wholesalers are, especially in some provinces, a very powerful group that do not allow trading directly between producers and processors14. The wholesalers are in many cases financially very strong and as a group they are probably the ones that have the biggest knowledge about the market. Based on their market knowledge they add value to the product by grading in a way that secures the best price. The wholesalers are difficult, and in some cases impossible, to by-pass and have thereby a “monopoly” status in the marketing chain allowing them to set their own margins. Hence a real market price determined by supply and demand is not established.

The influence of the wholesalers is not limited to the influence, by financial means, on the producers, but they also have great influence on the processors. In many cases the wholesaler supervises the processing and guarantees the yield. In these cases not much responsibility is left to the processor.

The system of trading through a number of wholesalers as it is functioning in Viet Nam makes traceability difficult. It makes the establishment of a real market price and knowledge of all the actors in the marketing chain difficult and, furthermore, it makes it difficult to make a system for tracing the product back to the producers. The whole-salers makes the establishment of a transparent system difficult and it makes it diffi-cult for the actors in the marketing chain to have the needed information.

3.3.3 Processors

The processors are processing around half a million tons fish and aquaculture prod-ucts a year, mainly for export. Export of fresh, iced fish as well as live fish to China

14 A fisherman explained that he could not sell directly to the processing company as the wholesalers then not would supply the processing company with other fish. At a processing factory visited in Quang Ninh province the company could not receive fish directly from the fishermen even though the port is located on its property but were forced to use the wholesal-ers.

Wholesalers are often financing the fisher-men and fish farmers

The wholesalers are powerful, financially strong and have good market knowledge

Some wholesalers even supervise the processing

The existing system with wholesalers is neither transparent nor useful in connec-tion with traceability

Most processed prod-ucts are exported

18

and other Asian countries takes place, but the main part of the production is frozen products.

Block-frozen products are the most common, but there is an increasing production of IQF products. Furthermore, more and more retail-packed as well as value added products are produced by the Vietnamese aquatic products sector.

The processors are both buying directly from fish farmers or from fishing vessels or through wholesalers. In some cases the processors are paying up front to fish farmers and fishermen.

The company is normally exporting themselves and most processing is done by com-pany operators.

Some products are produced for the local market, fish sauce being the most important of these products. It is mainly produced from small pelagic fish. If the fish does not have the necessary quality for the production of fish sauce it is used for fish meal pro-duction. Fish that does not have the necessary quality for the production of frozen or dried products are normally not used for production of fish sauce but for fish meal production.

There is no specific fishery targeting trash fish in Viet Nam but this fish is caught as a bi-catch from the fishing of high value fish species. It is estimated that anchovy and other small pelagic account for a major part of the trash fish landed. These are graded and used as follows:

• Grade 1: 7 - 10,000 VND/kg for dried products; • Grade 2: 4 - 5,000 VND/kg for grouper and other aquaculture feed; • Grade 3: 1 - 4,000 VND/kg for fish sauce

Fish having a lower quality are used for fishmeal production.

The growth in aquaculture has increased the demand for feed and the aquaculture sector can pay a higher price than the fish sauce processors, especially for anchovy and similar fish, forcing the fish sauce processors to use mixed trash fish of low qual-ity resulting in a low quality fish sauce.

3.3.4 Retailers

The majority of fish retailers are operated at household level. Fish retailers are nor-mally specialised in fish retailing but have also income from non trade related activities i.e. farming. Fish retailing takes place at various market places.16

15 On the basis of Edwards et al: A survey of marine trash fish and fish meal as aquaculture feed ingredient in Viet Nam, ACIAR working paper no. 57 16 More information is found in section 4.

Frozen products are by far the most im-portant.

Fish sauce is an im-portant product for the domestic market

Utilisation of trash fish in Viet Nam15

Retailing of fish is normally operated at household level

19

3.4 Public sector involvement As the fisheries and aquaculture sector is a vital part of the Vietnamese economy, sev-eral ministries and institutions are involved in the development of the sector as well as fisheries and aquaculture market development. A brief description of the main Minis-tries, institutions and NGO´s is given in the following paragraphs and a more detailed analysis is found in chapter 7.

3.4.1 Ministry of Fisheries (MOFI)

MOFI is the central ministry having the overall responsibility for the sector. MOFI determines goals, objectives and action programmes for fisheries production, accessi-bility and consumption over periods of time. A description of the most important de-partments, with respect to marketing, is given below.

Department of Planning and Finance This department elaborates the overall development plans for the sector.

Fisheries Information Centre (FICEN) FICEN is collecting and publishing various statistical information on capture and aquaculture production, processing, export and marketing. It is keeping records of prices of some major groups of fishery species at several locations in the country. However, there are many existing gaps in the information which furthermore is first published as historical data reducing their usefulness in connection with active market-ing activities.

National Fisheries Quality Assurance and Veterinary Directorate (NAFIQAVED) NAFIQAVED is responsible for quality assurance at processing enterprises. It is re-sponsible for the quality of fisheries products once they are produced largely for ex-port. With respect to export to the EU, NAFIQAVED has the responsibility of issu-ing export licences. However, for products traded on the domestic market, the Minis-try of Health is responsible for assurance of the product’s quality.

3.4.2 Ministry of Trade (MOT)

Market management is handled by the Ministry of Trade (MOT). Since the inception of trade liberalisation on the domestic market, the market management is mostly im-plemented by the Department of Trade (DOT) at provincial level under the provincial or city’s People’s Committees. DOT regulates and supervises operations of wholesal-ers, retailing networks and market networks in their administrative area. DOT is re-sponsible for market planning, market infrastructure improvement and market main-tenance.

Several ministries and institutions are in-volved in the sector

MOFI has the overall responsibility for de-velopment of the sec-tor

MOT is responsible for management of the marketing area

20

3.4.3 Ministry of Health (MOH)

MOH is in principle responsible for all items connected to consumer safety. In the fisheries and aquaculture area this means from capture fisheries or aquaculture pro-duction to the products reach the consumer. However, the government have moved the responsibility of fishery, aquaculture and processing to NAFIQAVED leaving MOH with the responsibility of wholesale and retail markets. MOH carries out two activities within this area:

• Analysis of the products that are entering the market. Some analysis for various chemicals can, however, not been carried out due to the lack of equipment;

• Approval and inspection of wholesale and retail markets. MOH is currently elaborating guidelines and these are expected to be finalised before the end of 2005

3.5 Non Governmental Organisations There are a number of Non Governmental Organisations (NGOs) within the fisher-ies sector, the most important being VINAFIS and VASEP. There have traditionally been very strong links between the governmental administration and the NGOs17. This has to some degree been broken allowing the NGOs to act more independently. However, there is still a need for a clear distinction.

3.5.1 Viet Nam National Association of Fisheries (VINAFIS)

VINAFIS is the Vietnamese Association of Fishermen and Fish Farmers. VINAFIS has around 200 local member associations and approximately 22,000 members. It was established in 1990 for fishermen and in 2001 the aquaculture sector was included. It publishes a magazine for its members and aims at informing the members about the development in the market. VINAFIS seams to be a rather weak organisation that lack resources to service its members in the right way.

3.5.2 Vietnamese Association of Seafood Exporters and Processors (VASEP)

VASEP was founded in 1998. Currently, it has 120 members as fishery processors and exporters nationwide. Its aims are to coordinate and bring together activities of its members from different economic sectors, regardless of their production and business scale, assisting members to improve value, quality and compatibility of Vietnam's sea products. VASEP represents and protects legitimate rights of its members and of the aquatic products industry of Vietnam. So far, it has taken part in the promotion of fishing and aquaculture to develop raw material sources and protect the prestige of the industry's products in the media and with consumers.

17 The fact that the Vice Minister of MOFI, Madam Minh, was chairwoman of VASEP was a clear disadvantage in relation to the catfish anti-dumping case.

MOH is responsible for wholesale and retail markets

VINAFIS organises fishermen and fish farmers

VASEP organises the fish processors and exporters

21

3.5.3 Other NGOs

NGOs such as Viet Nam Women's Union and Viet Nam Youth Union are from time to time participating in projects and programmes conducted by MOFI in the fisheries and aquaculture sector.18

18 UNDP: Asia pacific regional initiative on trade, economic governance and human develop-ment. Country case study: Trade in Fisheries and Human Development Viet Nam p. 42.

22

4 The domestic market The domestic market is very important for the Vietnamese fisheries and aquaculture sector as most of the capture and aquaculture production is consumed in Viet Nam.

4.1 The domestic marketing system In general the domestic marketing system is as outlined in the general description in section 3.3.

4.1.1 Transportation

Fisheries and aquaculture products are transported several times before they are con-sumed and include the following connections:

• Transport from capture/farming to wholesale market. The transport can in prin-ciple be carried out on anything from bicycles to motorbikes to insulated trucks. In general, the hygienic conditions observed are far from optimal i.e. for fresh fish there is a lack of ice, live fish are often kept in dirty water and frozen prod-ucts are not kept at the proper low temperature.

• Transport from wholesale market to retail market. As many of the retailers are small household operations, the products are mainly transported by bicycles or motorbikes under poor hygienic conditions without ice or proper handling.

Most fisheries and aquaculture products are consumed on the domestic market

Fish and aquaculture products are in gen-eral transported under poor hygienic condi-tions

23

4.1.2 Wholesale markets

The fisheries and aquaculture sector in Viet Nam includes a number of wholesale markets.19 20The wholesale markets can be divided into the following categories:

• Wholesale markets at landings places. Wholesale marketing takes place in most traditional landings places. These are often located directly on the beach where the fishermen land their fish using small boats to off-load from the fishing ves-sels and to land on the beach. The wholesalers are then buying the fish and often grading it in terms of quality and sizes directly on the beach. The fishermen are usually selling to the same wholesaler as she/he often finances the fishery opera-tion. The hygienic conditions in the markets are in general poor. There is a need for the construction of physical markets with concrete halls21, ice production and access to clean water. It is recommended that the facilities are established at the existing landing places rather than relocating them, as fishermen often are unwill-ing to use other landing places then the traditional ones (see below).

• Wholesale markets in fisheries ports. Wholesale markets exist in a number of fishing ports along the Vietnamese coastline. Some are built by the Vietnamese authorities and some are set up with foreign assistance i.e. an ADB project con-structed 10 key fish markets at the end of the 90is and Japan have constructed others. The facilities are often better than at the landing places as ice is available and a concrete market is established. However, not all ports have been a success i.e. most fishermen in Vung Tau prefer to use the traditional landing place at Long Hai instead of the Japanese constructed fishing port. One of the problems for the wholesale markets in the fishing ports is that the companies need to pay a fee for using them whilst it is free to use the market places at the traditional land-ing places as there are no costs to use the beach. In Da Nang, the Thuan Phuoc fishing port constructed as a part of the ADB project is going to be closed and used for tourism purposes instead, even though is was opened as recently as 2001.

• Wholesale markets in bigger cities. In many bigger cities in Viet Nam wholesale markets exist. The markets are often located in the very centre of the cities mak-ing transport to and from the market difficult. They are often moved by the au-thorities as no city plans have identified a designated place for them22 The hygi-

19 The project team visited a number of wholesale markets and discussed the development of wholesale markets with local administrations and key stakeholders. Details of this are found in annex 7. 20 In this report wholesale markets refer to places where wholesale is taking place no matter how the places physically look like i.e. road side, dock side or special buildings, etc. 21 The halls should either be enclosed buildings or sheltered areas where a concrete floor is covered by a roof, depending on the actual conditions at the location. 22 This accounts for the wholesale markets in Ha Noi and Ho Chi Minh City that have been moved several times during the last couple of years.

Wholesale markets are found at landing places, in fishing ports as well as in major cities. The hy-gienic conditions are in general poor.

24

enic conditions are poor. The markets visited during this project23 need to be re-placed and relocated and this is true for most markets in the big cities.

Several provinces visited, have plans for establishing "fishery centres" including port and service facilities, wholesale market and areas for fish processing plants.24 In both Ha Noi and Ho Chi Minh City there are plans for establishing a wholesale market and providing them with a permanent location.

There is a clear need for upgrading and expanding the existing wholesale markets as well as establishing new ones. The wholesale markets need to improve the hygienic standards so they are in line with international standards and a system for treatment of waste water and other waste needs to be established. In the planning of the markets, it is also essential to consider the logistical aspects as a large amount of products will pass through the markets.25 As the consumption of aquatic products is expected to increase over the next 10 years (see section 4.4) there is a need for investment in the wholesale sector.

However, it is important that regulations for wholesale markets are developed and implemented.26 The regulations should include the requirement that wholesale only can take place in facilities approved by NAFIQUAVED/MOH. If this requirement is not made and enforced wholesale will continue to take place at beach markets etc. as they are free of charge. It is also important that all other areas of the Vietnamese legis-lation is enforced at all wholesale markets i.e. tax legislation. Several of the companies interviewed during the project were not interested in using official markets as they were forced to register their income and pay tax. At more unofficial markets this does not happen.

4.1.3 Retail markets

Numerous market places and outlets exist all over Viet Nam and as fish is a major commodity it can be found there. The retail markets can be divided into the following categories:

• Open air markets: Many open air markets exists in Viet Nam. The smallest is often located along the roadside while others are located at a specific place which has been used for many years. The hygienic conditions on these markets are poor.

• Indoor market places: Indoor market places are very normal in Viet Nam. The indoor facilities give some protection of the product but in general the hygienic conditions are poor. In Da Nang, a city marketing management company has

23 Se annex 7. 24 This is the case in Ho Chi Minh City, Da Nang and Quang Ninh provinces. 25 These parameters are, according to the SATRA company, taken into account in connection with establishment of the new wholesale market in Binh Dien, Ho Chi Minh City, see annex 7 for further information. 26 See section 6 for further information.

Many provinces are planning to establish wholesale markets

Wholesale markets need to upgrade with respect to hygiene, waste treatment and transportation

Retail marketing takes place all over Viet Nam

25

been established with five markets and one supermarket. The hygienic standards on these markets are good and they are well managed. Unfortunately, they seem not to be very well accepted by the customers27 as the prices are higher than on open air markets due to the fee payable to use the facilities. As is the case with the wholesale markets, there is a need for the establishment and implementation of regulations concerning retail markets. There is also a need for the enforcement of existing legislation i.e. tax legislation in all market places.

• Fish shops and mongers: Bigger cities like Ha Noi and Ho Chi Minh City have a number of specialised fish shops. The hygienic conditions are in general rather good.28

• Supermarkets: In major cities like Ha Noi29 (more than 20 supermarkets) and Ho Chi Minh City (more than 40 supermarkets) a number of supermarkets are estab-lished. The number as well as the turnover is increasing30. The supermarkets in-clude big international chains such as Cora (French), Metro (German), City Mar-ket (USA) and Seiyu (Japan).

4.2 Prices and price formation The distribution and marketing system in Viet Nam is in general rather cost efficient and includes the following margins31:

• Wholesale prices up some 25% in average over the prices paid to the fisherman or fish farmers. Are several wholesalers involved in the operation they normally split the profit.

• Retail prices up some 10 - 25%

Table 4.2.1: Average prices on important products in 1,000 VND32 Species Fish

Farmers Fisherfolks Wholesalers Retailers Processors

27 Se FAO: Fisheries marketing and credit in Viet Nam p. 75. This was also the impression of the consultants as they visited the Han market on Saturday the 9 April 2005 in the afternoon. At this time there were more traders than customers. 28 The consultants visited the Cau Hang Hai San Chien fish shop in Ha Noi. This shop sells more than 30 different species and the product includes live, fresh and frozen products. The customers include not only ordinary consumers but also hotels, restaurants and private com-panies. The owner claimed that the daily turnover was approximately 300 million VND. 29 The team visited the Vincome Ocean Supermarket in Ha Noi only selling fish and aquatic products including live (10% of turnover), fresh (30% of the turnover) and frozen (60% of the turnover) products. The supermarket was opened in November 2004 and has a daily turnover of approximately 40 million VND. 30 The team had a meeting with the sales manager from Ha Long Cannery Company in Ho Chi Minh City and he told that around half of there sale in Ho Chi Minh City were through su-permarkets. 31 Based on the teams interview with actors in the marketing chain. 32 FAO: Fisheries marketing and credit in Viet Nam. p. 84

The Vietnamese dis-tribution system seems to be rather efficient

26

Dried fish - 1.8 28.2 34.8 16.15 Dried squid - 77.2 96.6 116.0 153.33 Fish sauce - - 6.0 8.9 6.81 Mackerel - 20.9 23.7 27.6 43.67 Tuna (common) - 6.9 8.4 9.9 - Dried shrimp - - 69.2 131.4 - Common carp 13.9 11.4 16.0 18.5 - Snakehead 15.2 13.0 20.4 22.8 - Grass 9.2 7.6 11.6 11.7 - Scad - 7.1 7.1 7.9 - Pomfret - 17.1 20.4 24.5 - Anabas 11.0 11.0 - 20.0 - Even though the systems seam to be efficient there is still a need for improvement, in particular:

• Information on market demand and prices should be strengthened in order to establish a market price;

• A more transparent system should be established.

It is estimated that the 25% price increase from fishermen and fish farmers to whole-sale prices can be reduced to some 15% by through the establishment of wholesale markets with free competition. This will be a clear benefit for the consumers as well as the producers and processors.

4.3 Marketing information Information about market demand and market prices are not seen as sufficient by the various groups involved. FICEN under MOFI collect and publish some information but this is not done systematically and the prices are not published before they are historical. The various actors involved in the marketing chain have in general access to the following information:

• Fishermen and fish farmers are in general given very little information about market demand and market prices. They have limited resources and limited op-portunity for collecting information themselves. The larger operators however are often contacting several wholesalers in order to achieve the best price when selling. VINAFIS is in several provinces trying to inform their members, how-ever, the organisation's resources are limited.

• The wholesalers seems in general to have a very well established network and through this they receive information about market demands, prices as well as in-formation about the market supply. They are probably the group that has the best market information. The information is normally kept by the wholesalers themselves as it is a part of their business confidentiality and it is used to ensure their power and position.

There is a need for more market informa-tion

The actors in the marketing chain have only limited access to marketing informa-tion

27

• The fish processors and exporters all have various market channels that give them market information. Besides this, VASEP is providing marketing informa-tion for their members.

In order to establish a well functioning market for fisheries and aquaculture products there is a need to establish a market information system that provides all actors with up to date demand and price information. This system should especially target the weakest groups such as the small scale fishermen and farmers.

4.4 Consumption

4.4.1 Present situation

The consumption of aquatic products in Viet Nam accounts for more than half of the animal protein consumption and is thereby a very important part of the diet and the consumption is increasing33. A consumer survey carried out by FAO shows the fol-lowing per capita consumption.

Table 4.4.1.1: Per capita consumption of aquatic products in kg per inhabitant per year Northern Central Southern Average Cities 29.16 35.64 30.36 31.80 Suburban 38.64 44.04 43.68 41.64 Rural 28.20 39.84 52.32 39.36 Overall mean

31.80 37.68 36.96 35.64

Source: FAO, Fish marketing and credit in Viet Nam p. 126

The most popular fish species is shrimp, squid, crab, snakehead, major carps, com-mon carp, mackerel, tilapia, shellfish and catfish. Fish sauce is with a household con-sumption of 5.8 kg a year a very important product and for poor people it is the main source of animal protein.

The survey on fish consumption in Viet Nam carried out by FAO showed that an increased income not only results in an increased consumption of aquatic products but also an increased consumption of high value species and products and these are already available on the domestic market.

33 Various figures are given concerning the per capita consumption i.e. 8 kg is given by Lam (UNDP: Asia pacific regional initiative on trade, economic governance and human develop-ment. Country case study: Trade in Fisheries and Human Development Viet Nam p. 11), 19.4 kg by Tuan (Globefish: Fishery Industry Profile: Viet Nam volume 75, FAO 2004 p. 32). The FAO figures used in this report are based on a survey including 2,077 households.

There is a need for up to date price informa-tion

Fish and aquatic products account for more than half of the protein consumption in Viet Nam

Shrimp are the most popular item

Increased income in-creases the demand for high value prod-ucts

28

For people living in poverty, fish sauce is major protein source. A general improve-ment in the quality of fish is not expected to affect the fish sauce production. How-ever, the fish sauce processors are competing with the aquaculture sector on raw ma-terial and increased aquaculture production can cause lack of raw material for the fish sauce processors as the aquaculture sector pays a higher price.34

4.4.2 Future development

The FAO consumer survey showed that increased income leads to an increase in the fish consumption and on the basis of this a prediction for the future per capita con-sumption is developed as follows:

Table 4.4.2.1: Projected per capita consumption of aquatic products in kg under vari-ous economic growth scenarios. 2005 2010 Low growth 44.16 52.44 Medium growth

48.60 65.28

High growth 53.88 83.16 Source: FAO, Fish marketing and credit in Viet Nam p. 126

The expected development in the consumption will result in increased investment needs in the marketing chain.

34 For additional information on this subject please refer to Edwards et al: A survey of marine trash fish and fish meal as aquaculture feed ingredient in Viet Nam, ACIAR working paper no. 57

Development of the aquaculture sector can reduce the production of fish sauce a major protein source for poor people

The consumption of aquatic products is expected to grow

29

5 The export market Fisheries and aquaculture products are a major Vietnamese export article and steadily increasing. In 2004, the export value was approximately 2.3 billion USD accounting for some 12% of the total Vietnamese export making it the third most important item after oil and garment.

Table 5.1: Export of fishery products 2001 - 2004

0

500

1,000

1,500

2,000

2,500

2001 2002 2003 2004

Mill

ion

USD

Source: VASEP, see annex 8

The import of fishery products has grown from around 20 million USD in 2000 to around 100 million USD in 2004 of which frozen shrimp accounts for approximately 72% of the total import originating mainly from India, China and Bangladesh. The import is mainly used as raw material in the fish processing industry and then re-exported.35

The Vietnamese processing industry is importing raw material for two reasons36:

• The raw material is cheaper than available Vietnamese raw material;

35 Ministry of Trade: Report on group item aquatic products (in Vietnamese language), Ha Noi, 2004 p. 59 and 73. 36 The company INCOMFISH, visited by the team, are importing approximately 60% of its raw material.

Aquatic products are the third most impor-tant export article accounting for around 12% of the total Vietnamese ex-port earnings

Import of aquatic products is very lim-ited and consists mainly of raw mate-rial to the processing industry

30

• It is possible to buy a graded raw material so the processing plant only purchase the grading they need i.e. shrimp count 20 - 40

The fact that companies are importing raw material because they cannot buy a graded product in Viet Nam, clearly demonstrates a discrepancy in the present marketing sys-tem with respect to raw material and the need for the establishment of a well func-tioning and transparent system.

5.1 The raw material market

5.1.1 The marketing channels

The Vietnamese aquatic product exporters and processors buy raw material either from fishermen, fish farmers or wholesalers:

• Raw material is only purchased in very limited amounts directly from fishermen as they normally are selling through wholesalers;

• Purchase of raw material, especially shrimps, from bigger shrimp farms is normal and accounts for approximately 30% of the raw material used by the shrimp processors;

• Wholesalers are by far the most important source of raw material for the fish processors.

A minor part of the raw material is purchased at wholesale markets.

Most of the processing companies visited claimed that the raw material available was not graded. As a result, if they only have customers for a product of a special grade, they need to buy un-graded raw material only a proportion of which they could use for the main product.

5.1.2 Experience with raw material wholesale markets

In April 2002 the Can Gio Aqua-products Trading Centre in Ho Chi Minh City started to trade shrimp. The centre aimed to establish a direct contact between shrimp farmers in the area and the processors. The producers as well as the processors regis-tered at the market. This registration included what they intended to sell or buy and proposed prices. The centre then established the contact between seller and buyer who negotiated between them and who informed the centre when they reached an agreement. The shrimps were not physically transported to the centre but after the agreement was signed, the processors were obliged to collect the shrimps from the shrimp farm which were still in the ponds.37

37 All information is given to the team by the former manager of the centre and the manage-ment of the Cholimex company that was managing the centre for the Peoples Committee.

The processors buy raw material either from fishermen, fish farmers or wholesal-ers

There is a need for implementation of size and quality stan-dards

A shrimp trading cen-tre was setup in Can Gio in April 2002

31

The Can Gio Aqua-products Trading Centre was in operation until March 2004 when the trading stopped, according to the management, because of the outbreak of White Spot Decease (WSD) in the shrimp farms in the area. However, at the time of opera-tion the centre was not very successful. Approximately 12,000 tons shrimp in total was traded via the centre accounting for under 20% of the available shrimp in the area.38 The unsuccessful performance was due mainly to the following reasons:

• The shrimps farmed in the area were traditionally, via wholesalers, sold to restau-rants in Ho Chi Minh City who pay a higher price than the processors. While shrimp on average obtained a price of 80,000 VND/kg at the market the whole-saler, operating outside the market, paid 82,000 VND/kg.

• The processors found it time consuming to trade at the market. Furthermore, they needed to pickup the shrimps themselves at the farm, a service the whole-salers normally took care of.

• The amount available at the market was low compared with the processors de-mand.

• There was an insufficient legal framework to ensure taxation and legal status of contracts, etc.

• The market did not sell graded shrimps, but if one is interested in buying some, one is forced to buy all the shrimps from one farm,

• The centre was managed by Cholimex which is a processing company itself and thereby a potential customer.

• The companies were not happy about the requirement to register as they thereby could be forced to pay tax.

The Can Gio Aqua-products Trading Centre can not really be looked on as a whole-sale market where demand and supply determined the market price. It was more a centre where contacts could be established.39 Everyone involved in the centre, includ-ing the former management, considered it to have an incorrect setup.

5.1.3 The tuna market

The raw material market for tuna is in many respects special as tuna mainly is ex-ported as fresh fish.

The main area for tuna fishery is Phu Yen province where approximately 2,000 fishing vessels with an engine power of more than 300 Hp take part in the tuna fishery. All tuna landed in the province pass through 10 wholesalers. The wholesalers to some

38 Further information can be found in annex 7. 39 Besides the functions related to trade, the centre was selling feed, medicine and chemicals to the farmers and giving advice and training.

The market was not very successful and closed in March 2004

The centre was not really a wholesale market for shrimp

Tuna is mainly used for fresh export and grading is essential. This is mainly done by wholesalers - Viet-namese or foreign

32

degree cooperate with traders from Taiwan that help grade the quality of the fish into tuna for fresh export to Japan and tuna for processing purposes.

The traders from Taiwan are hereafter buying all the tuna that has a quality for export as fresh tuna and only leave the tuna that can be used for processing purposes to the Vietnamese companies. The Vietnamese companies lack the information and channels to market the tuna in the Japanese market themselves40.

In Nha Trang the situation is different and the processing companies and wholesalers are responsible for the export. The local wholesalers or the processing companies in Nha Trang are grading the tuna.

5.1.4 The raw material prices

The development in the farm gate prices for shrimp is shown in the table below.

Table 5.1.4.1: Farm gate prices for shrimp in VND 1,000 Months North N. Central S. Central Mekong Delta No/kg 31-40 41-50 31-40 41-50 31-40 41-50 <20pcs/kg 21-25 26-30 31-40 41-50Feb 2003 130 120 105 80 65 Mar 2003 135 116 100 80 67 Apr 2003 95 74 118 105 88 80 75 May 2003 95 75 120 108 95 80 60 Jun 2003 87 75 65 118 105 88 80 60 Jul 2003 85 75 80 120 114 108 96 90 Aug 2003 80 75 85 80 120 110 105 92 82 Sep 2003 85 75 85 80 85 120 110 105 82 75 Oct 2003 116 96 82 61 48 Nov 2003 108 93 57 Dec 2003 88 72 Jan 2004 Feb 2004 105 85 Mar 2004 Apr 2004 95 90 135 120 110 100 80 May 2004 125 110 105 90 80 Jun 2004 80 70 126 105 95 77 72 Jul 2004 80 70 130 102 95 75 68 Aug 2004 85 80 137 102 92 75 73 Oct 2004 84 141 106 96 81 Nov 2004 90 145 106 96 81 Dec 2004 95 Jan 2005 148 107 66 Feb 2005 150 114 73 Mar 2005 153 118 76

40 The information was given to the team by Mr. Nguyen Dinh Hung, Director of Phu Yen Aquatic Products Corporation.

33

Apr 2005 146 112 66 Source: FICEN

As identified above, the farm gate prices for shrimp are fluctuating with a slightly in-creasing trend, especially for the larger grades. The major fluctuation, however, seems to be seasonal caused by the seasonality in the farming.

Table 5.1.4.2: Farm gate prices for catfish in VND 1,000 Basa Tra pond Tra cageOct. 2003 12,000 7,250 8,900 Nov. 2003 13,500 Feb. 2004 13,200 9,500 14,500 Mar. 2004 14,500 9,200 14,500 Apr. 2004 8,500 14,200 Jun. 2004 14,000 11,200 14,500 Aug. 2004 14,000 12,500 14,200 Sep. 2004 14,000 12,500 14,200 Oct. 2004 13,000 12,250 12,500 Nov. 2004 12,000 11,250 11,500 Dec. 2004 12,000 11,250 12,000 Jan. 2005 12,500 11,600 12,200 Feb. 2005 12,500 11,400 12,500 Mar. 2005 12,500 11,400 12,500 Apr. 2005 12,500 11,400 12,500 Source: FICEN

There seems to be a similar picture with catfish. The catfish prices went down after the anti-dumping measure (see section 5.4.1) was adopted by the US, but increased domestic consumption, export to other countries, development of new products, etc. have increased the farm gate prices. The farm gate prices on catfish went down to nearly half the normal level for a period before they recovered, causing serious prob-lems for the catfish farmers.41

As described in section 4.3, the information on market demands and prices available for the actors in the marketing chain is limited.

5.2 Transport and cold chain for export42 The processed product for export is normally transported either by insulated trucks or containers and the hygienic standards fulfil international requirements.

41 The impact of the anti-dumping measures on catfish as well as shrimps is analysed in Tung, Thanh and Phillips: A Case Study of Viet Nam. 42 This section is mainly based on SEAQIP: Cold stores in Viet Nam: Present situation and future demand, 2003.

Shrimp prices are fluctuating due to seasonality in farming

Farm gate prices on catfish have increased

34

At present the main part of the Vietnamese aquatic products are exported by sea. The port of Ho Chi Minh City is by far the most important and it is estimated that around 75% of all Vietnamese aquatic products are exported through this port. The second most important harbour for export of frozen aquatic products is Hai Phong, followed by Da Nang.

Since the middle of the 90's the export of aquatic products to China has increased significantly and most of this export takes place by truck, where Mong Cai is the most important border gate followed by Huu Nghi-Lang Son and Lao Cai.

Frozen aquatic products are shipped in refrigerated 20 or 40 feet containers. The con-tainers are normally shipped to either Cao Hung (Taiwan), Hong Kong or Singapore where they are re-loaded for shipment to the US, Europe or Japan.

The total number of cold stores (processor-owned as well as commercial) for aquatic products in Vietnam is close to 650 representing a capacity of approximately 80,000 tons.

Table 3.2.1: Cold stores for aquatic products, number and capacity 2003 Number In percentage Capacity In percentage

North 75 12% 4,995 6%

Central 172 27% 18,088 23%

South 396 62% 55,685 71%

Total 643 78,768 Source: VASEP Company.

As shown in the table, the main part of the cold store capacity is found in the south of Vietnam in line with the fact that the main part of the production takes place here and that Ho Chi Minh City is the main port of shipping. The table also shows that the percentage of cold store capacity in the north of Vietnam is below the percentage of production in this area, while the opposite is true for the central of Vietnam.

Table 3.2.2: Catch, aquaculture production and cold store capacity in the three regions 2002 Total North Middle South

Capture 1,434,800 198,800 437,000 796,480

Aquaculture 976,100 228,330 48,300 697,270

Total 2,410,900 427,130 485,300 1,493,750

Cold store capacity 78,768 4,995 18,088 55,685

Production/cold store capacity

30.608 85.512 26´.830 26.825

The port of HCM City is the main point for export.

The total cold store capacity is close to 80,000 tons

The main part of the cold stores, producer-owned as well as commercial cold stores, is found in the south of Vietnam.

35

The table shows that the production (catch and aquaculture) per ton cold store capac-ity in the north of Vietnam is well above average. However, a large amount of the production is exported as fresh or live products which are not stored at cold stores.

The utilisation of the cold store capacity varies during the year due to the seasonal variations in the production and due to variations in the market demand. In general approximately 40% of the capacity is utilised in the lean season while the total capacity is utilised in the peak season. The capacity has been increased since 2003, however, there seems to be a large demand as a lot of shrimps are stored due to the anti-dumping measure (se section 5.4.1). As in the catfish case, it is only expected to be a temporary problem as processors are expected to find new markets and products.

5.3 Export

5.3.1 Main export products

Shrimp is the most important export article and the importance is increasing do to the increase in shrimp farming. In 2001 shrimp accounted for 44% of the total export value and in 2004 it accounted for 54%.

Figure 5.3.1: Main export commodities 2004

54%

23%

7%

4%

12%Shrimp

Fish

Squid, cuttlef ish +octopus

Dried

Other

Source: VASEP, see annex 8 for further details

The second most important export item is fish followed by squid, cuttlefish and octo-pus. Most of the exported product are block-frozen semi -processed that will be proc-essed further in other countries. However, more and more Vietnamese companies are producing value added and retail packed products.

With respect to species, black tiger shrimp, catfish and tuna are the most important for export. During the last year there have been problems with export of shrimp and catfish to the US market (see section 5.4).

Shrimp is the most important export item followed by fish

Most of the exported product is semi-processed

36

5.3.2 Main export markets

Japan and USA are the main export markets accounting for more than half of the Vietnamese aquatic products export.

Table 5.3.2.1: Export of aquatic products in USD 1,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2001 2002 2003 2004

OtherTaiwanChina + HKSouth KoreaEUASEANUSAJapan

Source: VASEP, see annex 8 for further details

In the late 90's the Vietnamese export to Japan was suffering due to the economical crisis in Japan. At the moment the anti-dumping cases on catfish and shrimp (see be-low) makes export to the US market difficult. On the EU market the Vietnamese ex-porters have faced problems with residues from antibiotics. During the last four years the export to China and Hong Kong has declined while the export to Taiwan and South Korea has grown.

5.4 Trade relations In general Viet Nam has normal trade relations with all other countries in the world. However, during the last couple of years Viet Nam has faced difficulties on the US market do to anti-dumping measures on catfish and shrimp and on the EU market due to antibiotic residue in shrimp products.

5.4.1 US Anti-dumping Measures

Viet Nam has faced two anti-dumping cases on the US market where the country was taken to the US Court of International Trade (CIT). These cases have related to:

• Catfish;

• Shrimp.

USA and Japan are the main export mar-kets

During the last few years there have been problems with the US and EU markets

37

Anti-dumping Measures on Farmed Catfish After an early but unsuccessful attempt to restrict imports by disallowing the name “catfish” on imports from Vietnam, the US Government through the International Trade Commission (ITC) under the United States Department of Commerce (DOC) on 28th June 2002 received a petition from the US Catfish Farmers Association and eight individual catfish processors in the United States demanding an anti-dumping investigation into the imports of certain Vietnamese frozen fish fillets (from catfish – now called tra and basa).

The petitioners alleged that the Vietnamese frozen fish fillets were sold in the United States at prices less than the production costs, and such imports were materially dam-aging the US domestic catfish industry.

After its investigation in January 2003, the DOC ruled in favour of the US catfish in-dustry, and levied a series of tariffs against Vietnam’s catfish exporters from 37% to 53%. The decision was announced on 22nd July 2003.

Table 5.4.1.1: Tariffs for catfish products Agifish 45.07%Cataco 45.81%Nam Viet 53.68%Vinh Hoan 36.84%7 small companies 45.55%Other 63.88%

Antidumping measures on farmed shrimp In relation to shrimp, a claim was made by the US Gulf of Mexico shrimp fishermen and farmers that a number of developing countries were dumping farmed shrimp on the US market. This ad hoc group of mainly shrimp fishermen and farmers called themselves the “Southern Shrimp Alliance",. Their petition to the US International Trade Commission names Vietnam as one of the six developing countries that are globally significant and low-cost shrimp farmers. Antidumping petitions were filed with the ITC on 31st December 2003.

In a February 2004 decision, the ITC determined that there was a reasonable indica-tion that the U.S. industry was materially injured or threatened with injury due to the import of certain shrimp products from Brazil, China, Ecuador, India, Thailand, and Vietnam. The affected products included frozen and canned warm water shrimp and prawns that were allegedly sold in the United States at less than fair value. A prelimi-nary anti-dumping determination was released in July 2004, with taxes of 12-93% and in the final decision of the DOC in December 2004 the average anti-dumping duty for producers from Viet Nam was fixed at 4.58%.

Furthermore, in April 2005 it was decided that the exporters from Viet Nam should pay bonds when exporting to the US to ensure payment of the anti-dumping duties. The bonds were required to ensure payment if the exporter was close to bankruptcy

First dispute was con-cerning the name cat-fish

The US producers claimed that the Viet-namese catfish prod-ucts were sold at a price below the pro-duction costs

The claim by the US catfish farmers was accepted by the DOC

Viet Nam and other Asian producers were taken to the DOC for dumping shrimp on the US market

The claim by the US shrimp fishermen and processors was ac-cepted by the DOC

The exporters were requested to pay bonds

38

or facing other financial difficulties. The refund of the bonds could take up to several years.43

In both of the anti-dumping cases, it is a disadvantage that Viet Nam is not a WTO member and therefore does not have access to the formal WTO mechanisms for chal-lenging anti-dumping measures imposed on the country. Membership of WTO should position Vietnam better for challenging anti-dumping cases (see section 7.3).

It is difficult to see if the two anti-dumping suits or US protectionism. However, es-tablishment of wholesale markets/auctions resulting in transparent prices for raw ma-terial might prove to be advantageous in case of future anti-dumping suits, as one of the claims in the anti-dumping suits was that a true market price had not been estab-lished.44

5.4.2 EU Antibiotic Residue Issue

One other major issue for shrimp aquaculture products occurred in 2001, when the EU detected banned antibiotics (chloramphenicol and nitrofurans) in imported shrimp from Vietnam, as well as other exporting nations in Asia. The problems emerged from use of new analytical techniques that allow detection of these chemicals at very low levels (they also have to be seen in the context of increasing consumer and government concern in the EU over food safety). The result was rejection and de-struction of containers, and increased inspection, with EU examinations of 100 per-cent of shrimp products imported from Vietnam, as well as China, Thailand, and In-donesia and other countries during late 2001 and 2002. Containers with contaminated shrimp were destroyed, causing significant financial losses for some exporters. The export turnover from Vietnam into EU in the first 6 months of 2002 registered an 87% decrease compared to 2001.

In late 2002, the EU Veterinary committee stopped the compulsory 100% examina-tion policy on shrimps imported from Vietnam; which was the result of efforts by MOFI, VASEP, and exporting companies to raise awareness and control use of banned chemicals and antibiotics in the country. The whole issue has proved to be a complex one to control, as it relates to the farm production system, lack of awareness among farmers, and easy importation and trade of chemicals from neighbouring coun-tries. There still exists a need to strengthen policy on the responsible use of chemicals in aquaculture, and further strengthening of quality control and food safety measures in aquaculture production.

43 Viet Nam News 20th April 2005 p. 15. 44 The shrimp case shows, however, that this not is a guarantee as Thailand, where there are wholesale markets for shrimps, also was part of the anti-dumping suit.

WTO membership would have posi-tioned Viet Nam bet-ter

In 2001, EU banned the import of shrimps containing detectable antibiotics

Awareness in use of chemicals and antibi-otics in shrimp farm-ing was raised

39

6 Quality and quality control Quality and in particular the implementation of clear uniform quality standards play a major role in the formation of a traceable market and establishment of a market price.

6.1 Present situation During the last ten years, significant steps have been taken in order to upgrade the quality of fisheries and aquaculture products in Viet Nam. Standards have been devel-oped and implemented together with a public control and authorisation system. The main focus has been on the exporting component of the sector, especially the process-ing plant that is licensed for export, leaving the other sector components behind.

6.1.1 Fisheries

It is estimated that the Vietnamese fisheries sector includes around 85,000 motorised fishing vessels. At present no quality standards/guidelines are in force for this. In gen-eral, the hygienic standards are poor although there are large variations.

Offshore fishing vessels will often carry block ice and sometimes they will grade the fish on board according to standards given by the wholesaler. In most cases they grade only concern sizes.

There is no precise figure on how much of the fish catch that actually becomes waste - used only for fish meal or as fertiliser - exists, but it is probably in the area of 10 - 30%45 indicating the economical potential in an improvement in the handling of fish onboard fishing vessels.

45 None of the persons interviewed during the field visits would quantify the losses, neither their own or in general, however, they all confirmed that it is a problem. According to Ed-wards et al: A survey of marine trash fish and fish meal as aquaculture feed ingredient in Viet Nam, ACIAR working paper no. 57 p. 27, 20 - 30% of the offshore catch becomes waste and in some cases even 50 - 60%.

Quality standards are important for estab-lishment of a market price

Hygienic conditions in the capture fisher-ies need to be im-proved

40

6.1.2 Aquaculture

The total number of aquaculture farms in Viet Nam might be as high as 400,000 and they vary from small household farms to big industrial intensive farms. At present no quality standards/guidelines are in force although there are some under development. Effort has been made to reduce the use of chemical and residues as the use of chemi-cals have caused problems in the export area (see section 5.4.2).

6.1.3 Transport

As is the case with the fisheries and aquaculture, no quality standards/guidelines are at present in force for fish transport although they are under development. The stan-dards with respect to transport of raw material and transport of products to be con-sumed in Viet Nam are in general poor while the systems for transport of products for export fulfil the international standards.

6.1.4 Wholesale markets

A number of wholesale markets exist in the Vietnamese fisheries sector. The markets are mainly oriented towards retailers and do not play a major role in supplying the processors with raw material. At present no regulations/standards are in force in this area and as described in section 4.1.2, the hygienic conditions are in general poor.46

6.1.5 Processing

Aquatic product processing is the area in which most effort has been made in order to ensure a high and uniform quality. Viet Nam have around 330 aquatic product proc-essing plants of which more than 100 are certified for export to the EU47 and even more have implemented HACCP fulfilling the requirements for the US market.

At processing plants solely oriented towards the domestic market i.e. fish sauce facto-ries, the hygienic conditions are not at the same high level and there is a need for up-grading and making improvements.

6.1.6 Retail markets

At present no quality standards/guidelines are in force for this area. At present several types of retail markets are operating in Viet Nam, see section 4.1.3, and the hygienic conditions vary from very bad to very good.

46 Please refer to annex 7 for further information. 47 Globefish: Fishery Industry Profile: Viet Nam volume 75, FAO 2004, p. 25.

There is a need for an improvement of the quality in aquaculture

No quality standards exist for fish trans-port

Guidelines for whole-sale markets are not in place

Hygienic standards at processing plants ori-ented towards the domestic market need to be improved

Guidelines for retail markets are not in place

41

6.2 The control system

6.2.1 The authority

The overall responsibility for food safety including aquatic products remains with the Ministry of Health (MOH)48. However, in the aquatic products area NAFIQAVED has been given the responsibility for food safety in the area from catch/farming to processing.

In several areas i.e. wholesale markets, the division of responsibility between MOH and NAFIQAVED is not clear and in some areas there is an overlap.

6.2.2 Plans for development of the quality and quality control49

Fisheries Quality standards/guidelines are under development and shall be followed by design of training specifications and training plans including training materials. Implementa-tion of this work is to be completed by 2015.

Aquaculture Quality standards/guidelines are under development and shall be followed by design of training specifications and training plans including training materials. Aquaculture farms will be required to fulfil GMP and HACCP. Implementation of this work is to be completed by 2015.

Transport Quality standards/guidelines are under development and shall be followed by design of training specification and training plans including training materials. Implementa-tion of this work is to be completed by 2015.

Wholesale markets Quality standards/guidelines are under development and expected to be published before the end of 2005.

Retail markets Quality standards/guidelines are under development and expected to be published before the end of 2005.

48 The legal basis in force is the Ordinance on food hygiene and safety, National Assembly Standing Committee no. 12/2003/-UBTVQH11 and the Government's decree on the imple-mentation of some articles in detail of Ordinance on food hygiene and safety, Government no. 163/2004/ND-CP. 49 This chapter is based on meetings held with MOH and NAFIQAVED and a paper dated 15 October 2004 (ref 1877/CLTY-HTQT) on strategy for development of NAFIQAVED´s ser-vices in the next 10 years.

NAFIQAVED is the central authority with respect to quality in the fisheries and aquaculture sector

42

The table below summarizes the present situation and future plans.

Area Responsible authority Status and plans Fishery NAFIQAVED Needs to be improved

Plan under elaboration Aquaculture NAFIQAVED Needs to be improved

Plan under elaboration Wholesale markets NAFIQAVED concern-

ing processing MOH if not concerning processing

Needs to be improved Plan under elaboration

Processing- domestic market

NAFIQAVED Needs to be improved Plan under elaboration

Processing- export mar-kets

NAFIQAVED Control in place

Retail markets MOH Needs to be improved Plan under elaboration

While quality stan-dards are well imple-mented in the part of the sector concerning processing for export there is a serious lack of implementation in the other parts of the sector

43

7 Governmental policies and assistance50

7.1 The policy area The programmes in force for development of the fisheries and aquaculture sector have so far mainly concentrated on the development of production and export.

The Prime Minister of Vietnam's Government issued the Decision 251/1998/QD-TTg, dated 25th December 1998, on the approval of a programme on the development of fisheries export until 2005.

The objectives of the programme are as follows:

• Speed up the process of industrialisation and modernisation in Vietnam's Fisher-ies and Aquaculture sector;

• Increase fisheries export value to USD 1.1 billion by the year 2000 and USD 2 billion by the year 2005;

• Turn the fisheries sector into a key economic sector; • Create more jobs, contribute to improve people's lives, put a new face to rural

areas and coastal regions, and solve questions on environment and ecology; • Connect closely fisheries export with aquaculture, fishing, preservation and con-

sumption of products; • Create firm bases for fisheries production and effective exploitation of fisheries

potential; • Improve quality of fisheries products, reduce production costs, increase effi-

ciency and capital accumulation for reproduction, and • Improve competitive capability and expand markets for Vietnam's fisheries

products.

The programme's objectives appear in general to be fulfilled. For example, the export value of approximately USD 2.3 billion reached in 2004.

The programme focused mainly on three species:

• Catfish • Shrimp

50 A list of central policy and legal documents are found in annex 10.

Development of pro-duction and export have been the key concerns in the de-velopment of the sec-tor

The programme in force runs until the end of 2005

The program are in general implemented

44

• Tuna

A programme for the period 2005 - 2020 is at present under development. The key words in this will be consolidation and stabilisation rather than expansion.51 However, it will still be a goal that the production is increased to 4 million tons in 2010 (equally divided between aquaculture and capture fisheries) and that an export value of 4 bil-lion USD is achieved, an increase of more than 10% per year on average.

7.2 The regulations The legal framework in Viet Nam is implemented by a number of ordinances, deci-sions, decrees, guidelines and regulations.52

Until 1986, all prices in Viet Nam were fixed by the Government. However, the situa-tion has moved away from a command economy towards a market economy. A gen-eral trade law was issued in 1998 and this is the foundation for all trade including trade with fisheries and aquaculture products. Besides this a number of decisions have been put in force.

Decision no. 80

The decision no. 80 encores to cooperation in the aquaculture sector between the par-ties involved, in particular:

• Enterprises (Processing companies) • Scientists • Farmers • Banks.

At the start of the season the enterprise and the farmer sign a contract which includes:

• Advance payment from the enterprise to the farmer of 20 - 50% of the produc-tion costs,

• An agreement on a minimum price to be paid, • An agreement that the farmer shall sell all products to the enterprise.

This can hardly be said to be in line with a market economy. It seems therefore that there are some gaps and short cuttings in the legal area that need to be solved includ-ing the enforcement of the existing legislation.

51 The information was given to the team by Mr. Ngo Ahn Tuan, Director and Ms. Tran Thi Mieng, Vice Director in Planning and Finance Department, MOFI. 52 Analysis of legal framework is not included in the TOR for this study and none of the con-sultants are legal experts.

Consolidation and stabilisation will be the focus for the next 5 years

The trade law is the basic law for the mar-keting of aquatic products

45

7.3 WTO accession Viet Nam applied for WTO membership in 1995 and has at present observer status and hopes to become a member in 2005. The WTO regime includes in total 46 agreements and decisions that need to be fulfilled by the member countries. The main issues relating to fishery are shortly described in the following paragraphs including the current status for Vietnamese fulfilment of WTO membership requirements.

7.3.1 Tariff reduction

A part of WTO accession relates to the idea of tariff. The schedule for tariff reduc-tion for WTO accession is reflected in the tariff lines in Chapter 3, and sharper and faster reduction in Chapter 16 (processed fishery products), as shown in the table be-low:

Chapter Current tariff Reduced tariff03 30 20 16 50 40

7.3.2 Non-tariff measures

Government subsidies According to WTO rules, subsidies to companies or for export are not allowed. How-ever, government support in strengthening the fishery management and sustainable fishery development at the national level, including infrastructure development, re-search, training, fishery extension, and market development, is not classified as subsi-dies. The development programmes in force in the Vietnamese fisheries sector does not seem to be in conflict with the WTO rules.

Two years ago the government made subsidised credits available for construction and purchase of fishing vessels. This programme was very unsuccessful and a lot of in-vestment capital was lost. Around 10 years ago, 10 fishing ports were constructed with assistance from ADB. The consultants were informed by MOFI that this programme was not a success either.. During this project a port in Vung Tau financed by ADB was visited. There was nearly no activity at the port during the visit whilst all landings took place at the traditional beach market. Meanwhile the ADB financed port in Da Nang is going to be closed in the near future at it is located in an area that shall be used for tourism.53

A number of companies in the fisheries and aquaculture sector are presently state owned but according to the plans there should only be 7 strategic companies remain-ing in the sector by the end of 2005.54 It is recommended by the consultants that these companies also are privatised so that the state involvement in the companies in the sector is terminated.

53 For further information please see section 4.1.2 and annex 7. 54 The team was informed of this by the CTA of the FSPS and SIRED Mr. Lars Joker.

Viet Nam is at the moment in the proc-ess of accession to the WTO

Import tariff is planned to be re-duced

Subsidies for the in-dustry and exports are not allowed

SOE in the sector is under privatisation

46

Resource and environmental issues Members of WTO shall develop and implement a plan for environmental protection and sustainable development of the fisheries and aquaculture sector. The Ministry of Fishery issued many legal documents relating to resource and environmental protec-tion. This study has, however, not accessed this area.

Sanitation and phytosanitation In 1997 the HACCP system was incorporated in the WHO/FAO Codex Alimentarius and has since been the basic instrument in international trade disputes under the WTO agreement55. As described in chapter 6, Viet Nam has not completely imple-mented the HACCP system and there is still work that needs to be done in this area.

Competition and fair trade The WTO rule requires fair competition in trade in both goods and services.

7.3.3 Possible consequences of WTO membership56

The following positive consequences of WTO membership are expected:

• Viet Nam will have access to information and advice in connection with anti-dumping cases like the catfish and shrimp cases. If member states comply with the requirements of the WTO, the WTO will support them in any legal question concerning trade issues.

• Membership and trade liberalisation is expected to result in increased export earnings as it will liberalize the trade. WTO is the forum where trade liberalisa-tion is discussed and agreements are signed.

• Membership will, at least in principle, lead to the implementation of an environ-mental protection plan and thereby help to protect biodiversity.

On the negative side the following is expected:

• Reduction in employment. Fulfilment of the international requirements and the increased competition will only allow the biggest and most efficient companies to survive and in order to be cost effective they will need to reduce costs including salaries. Some smaller companies might survive, however, as the investments needed are quite significant, it is likely to only be the larger companies that sur-vive.

55 For further information refer to Peter Greenhalsh: Sanitary and Phyto-Sanitary (SPS) Meas-ures and Technical Barriers of Trade (TBT), FAO project PR 26109, July 2004 56 FAO has in cooperation with other donor organisations initiated a project on “Policy Re-search: Implications of Liberalization of Fish Trade for Developing Countries.” This project has been used by the team in their assessment of the impact of the WTO membership. Infor-mation and results so far can be found on www.onefish.org/id/225070.

An environmental development plan shall be implemented

HACCP is a key in-strument for WTO

47

• Reduction in fish for local consumption. There is a possibility that more fish will be exported and the amount left for domestic consumption will be reduced i.e. an increased aquaculture production will use more of the catch of small pelagic fish for feed and hereby reduce the production of fish sauce that is a very impor-tant product in poor peoples diet.

48

8 Market development needs This chapter briefly lists the market development needs with respect to:

• Wholesale market systems, • Governmental policy, • The domestic market, • Export marketing, • Monitoring systems, • Credit.

The chapter does not put forward priorities and recommendations but simply lists the development needs as they have been identified during the study. Priorities and rec-ommendations are given in chapter 9.

8.1 Wholesale market systems Wholesale markets are located in several places in Viet Nam and they are normally a part of the marketing chain towards the consumer, while they play no major role in supplying the processing plants.

Fish marketing and distribution in Viet Nam functions in general well and cost effi-ciently. There are, however, still opportunities for improvements that will reduce costs and make the system more efficient.

8.1.1 Wholesale markets for raw material

With respect to trading of raw material the internationalisation of the industry sets requirements to the supply of raw material including:

• Uniform raw material with respect to size and quality,

• Establishment of a real market value;

• Traceability as this will be required by the consumers;

• Stable supply;

This chapter lists the development needs as identified during the study

Wholesale markets are mainly part of the domestic marketing chain while they play no major role in sup-plying processors.

There is a need for the establishment of wholesale markets for raw material

49

• Improvement of the raw material quality.

The future demand will best be fulfilled by the establishment of wholesale mar-kets/auctions as these, in contrast to the existing system of wholesalers, will:

• Establish a real market price,

• Bring traceability into the raw material market,

• Establish a direct business connection between the producers and processors,

• Establish competition between the wholesalers operating on the market,

• Help to improve the quality of the raw material as raw material having the re-quired quality will be better paid than raw material not having this.

8.1.2 Other wholesale markets

With respect to wholesale markets oriented towards the consumer, the future devel-opment will demand an upgrading of the existing wholesale system in order to im-prove the quality. The domestic market will, with an increase in people's income, de-mand a higher quality. As is the case with the wholesale markets for raw material, there is a need for traceability.

During the next 10 years people's income is expected to increase and this will result in an increased demand for aquatic products including high value products. The whole-sale sector needs to:

• Improve the hygienic standard,

• Ensure proper treatment of waste water and other waste,

• Be able to control traffic to and from the markets,

• Handle frozen products.

8.2 Governmental policy The governmental policy has for the last decade been oriented towards increased pro-duction and export. This policy has been very efficient and the fisheries and aquacul-ture production has more than doubled during the last ten years and with an export value close to 2.5 billion USD it is the third most important export article accounting for approximately 12% of the total export. However, there is a need for several changes in the policy and legislative area:

• Development of a policy and plan for the domestic market,

There is a need for upgrading and expan-sion of the existing wholesale markets

The governmental focus needs to be changed from export to other parts of the sector

50

• Development and implementation of a clear legislation for trading with aquatic products including legal framework for setup and management of wholesale markets,

• Ensure that the legislation is implemented in all parts of the sector,

• Establish a clear division of responsibility between MOH and NAFIQAVED including the transfer of responsibility for the aquatic products wholesale markets to NAFIQAVED.

8.3 The domestic market Little attention has been given to the development of the domestic market for aquatic products despite the fact that most of the fisheries and aquaculture products are con-sumed in Viet Nam. There is a need for:

• Development of a governmental policy in the area,

• Development and implementation of quality standards for the entire supply chain from fishermen/fish farmer to consumer.

8.4 Export marketing The fisheries and aquaculture sector in Viet Nam has today well established export markets. However, there is still a need for improvement:

• Establishment of more long-term business relations with customers,

• Increase in the amount of value added and retail packed products,

• Establishment of a system for traceability,

• Improvement in the product quality.

8.5 Monitoring systems Systematic monitoring and collection of market information is not taking place in Viet Nam and small scale fishermen and fish farmers in particular lack market information. There is a need for:

• Collection and publishing of actual market prices,

• Strengthening the capacity of VINAFIS.

Attention needs to be given to development of the domestic mar-ket

Export of fisheries and aquaculture products is well estab-lished, however, the industry can improve in a number of areas

There is a need for making market in-formation available for the actors in the marketing chain

51

8.6 Credit At the moment many small scale fishermen and fish farmers have difficulty in lending money from banks in order to finance their production costs. Consequently, the wholesalers are providing financial support. This can in the long run be a key barrier against the establishment of a free market since the producers are limited in selling their produce only to the wholesaler providing the financial support.57

57 This study has not investigated the credit market in detail, i.e. how competitive the wholesal-ers are compared to the banks, as this will be subject for a separate study by the WB later in 2005.

Lack of formal credit systems can make free competition difficult

52

9 Development priorities and recommendations The Vietnamese fisheries and aquaculture sector has developed extensively during the last decade. It is estimated that up to four million people are involved in the sector that accounts for approximately 3% of the GDP. With respect to marketing, the de-velopment has also been remarkable. On the domestic market aquatic products are the most important protein source and the consumption is increasing. Export of aquatic products has been given high priority from the governmental side resulting in an ex-port in 2004 of approximately 2.3 billion USD making it the third most important ex-port article accounting for approximately 12% of the total export. However, it is ap-parent that the marketing of fisheries and aquaculture products are experiencing prob-lems i.e. anti-dumping measures, semi-processed products accounting for the main part of the export, low quality aquatic products marketed in Viet Nam, etc.

This chapter summarises major development priorities and recommendations within the marketing area. It synthesises the wider range of development needs identified during the marketing study (see chapter 8) and is organised around:

• The raw material market, • The domestic market, • The export market, • Governmental policy and support.

9.1 The raw material market

9.1.1 Development priorities

Trading of raw material from fisheries and aquaculture is the first, and maybe most important, step in the marketing chain. The trading of raw material in Viet Nam is normally done by wholesalers that are buying directly from the fishermen and fish farmers and who then sell to the processors58. The fish are in most cases not passing any marketplace. Wholesale markets/auctions oriented towards trading of raw mate-rial for the processing industry do not exist in Viet Nam. There is a need for the estab-

58 In some cases the processors are buying directly from the processors particularly in the shrimp industry where it is estimated by FAO that approximately 30% of the raw material is purchased directly from bigger farms. In other parts of the sector direct purchasing from fish-ermen and fish farmers nearly doesn’t exist.

The marketing of Vietnamese fisheries and aquaculture products has devel-oped extensively dur-ing the last 10 years

This chapter outlines the development pri-orities and the con-sultants' recommen-dations.

There is a need for the establishment of a transparent marketing system for raw mate-rial - wholesale mar-kets/auctions

53

lishment of a transparent marketing system for raw material that results in the estab-lishment of a market price for the products. This can be done through the establish-ment of wholesale markets/auctions where fisheries and aquaculture products can be sold by the producer as well as the wholesaler and where processors, exporters and retailers can buy. The establishment of a wholesale market system for raw material will make the trading and price information traceable and ensure development of a market driven sector.

9.1.2 Recommendations

General recommendations It is recommended to design and implement a net of raw material markets in Viet Nam, involving the following steps:

• Identification of the needed number of wholesale markets/auctions for raw ma-terial and the best possible location for them,

• Develop the organisational setup for the wholesale markets including trading system i.e. auction,

• Elaboration of an implementation plan,

• Development of legal framework (see section 9.4)

The steps above represent a major undertaking. Therefore, a pilot project approach is recommended, involving investment and technical assistance for the setup of one or two raw material markets and gradually expanding the net of raw material wholesale markets based on the experience gained.

Specific recommendations Within the next 1 – 5 years the implementation of the following activities is recom-mended:

• Construction of a wholesale market/auction in Can Tho for fisheries and aqua-culture products. The capacity should be 300,000 tons a year. The market should include:

- a concrete market hall of approximately 2 ha,

- Facilities for grading of fish,

- Ice production,

- Fresh water supply,

- Waste management systems including waste water treatment,

- Laboratory facilities for analysis,

It is recommended to establish a net of wholesale markets

It is recommended to start a pilot project and gradually expand

54

- Good road connections.

The total investment costs are estimated to be around 15 million USD.59

• Construction of a wholesale market/auction in Nha Trang or Phu Yen province for fisheries and aquaculture products. The capacity should be 50,000 tons60 a year and include:

- a concrete market hall of approximately 5,000 m2 ,

- Facilities for grading of fish,

- Ice production,

- Fresh water supply,

- Waste management systems including waste water treatment,

- Laboratory facilities for analysis,

- Good road connections.

The total investment costs are estimated to be around 3.5 million USD.

Within the next 10 years the implementation of the following activities is recom-mended:

• In the south of Viet Nam, construction of wholesale markets/auctions with an annual capacity of approximately 1.5 million tons fisheries and aquaculture prod-ucts involving an investment of around 75 million USD,

• in the centre of Viet Nam, construction of wholesale markets/auctions with an annual capacity of approximately 0.5 million tons fisheries and aquaculture prod-ucts involving an investment of around 25 million USD,

• in the north of Viet Nam construction of wholesale markets/auctions with an annual capacity of approximately 0.5 million tons fisheries and aquaculture prod-ucts involving an investment of around 25 million USD.

59 The costs are estimated based on the construction costs for the Bien Dien market in Ho Chi Minh City, see annex 7, which were approximately 100 million USD which included 6 market halls of 2 ha each and all surrounding facilities, giving a total price of approximately 7.5 million USD per ha. 60 The capacity is based on the present need with some possibilities for expansion. At the mo-ment, three old wholesale markets are operating in Nha Trang. The hygienic standards and location are however poor leading to the need for closure.

55

9.1.3 Expected impact and consequences

Construction of the wholesale markets/auctions is expected to result in the following:

• A more transparent system,

• Reduction in the power of the wholesalers,

• A reduction in the wholesale cost from the present 20 – 25% to around 15%61 for the benefit of producers, processors and consumers.

9.2 The domestic market


Despite the fact that most of the fisheries and aquaculture production is consumed on the domestic market, little attention is given to this and in general it is characterised by low quality and poor hygienic conditions. There is a need for improvement of the products as well as the marketing system including transportation and market outlets.


General recommendations The recommendations relating to the domestic market involve the following steps:

• Elaboration and implementation of product standards for live and fresh fish to be sold on the domestic market;

• Improvement of processing facilities for production to the domestic market;

• Development and implementation of standards for markets places.

The recommendations relating to the domestic market involve mainly necessary initia-tives such as standards for products and the development and implementation of re-tail markets by the government. It is expected that the private industry in general will manage the implementation and upgrading themselves.

Specific recommendations Within the nearest future the following activities are recommended:

• Elaboration of standards for the most common fish and shellfish including size and quality grading standards,

• Adoption and implementation of standards currently in force for companies that are exporting by all processing companies,

61 This is the normal landing and auctions costs in Europe including all handling, grading and trading.

There is a need for the development of the domestic market-ing system.

Standards and guide-lines need to be de-veloped and imple-mented

56

• Development and implementation of standards for wholesale markets/auctions including GMP, HACCP and SSOP,

• Development and implementation of standards for retail markets including GMP, HACCP and SSOP,

Within the next 10 years the following standards should be prepared:

• Standards for all Vietnamese fish and shellfish products,

• Standards for domestic transport.


Implementation of the above mentioned recommendations is expected to result in the following:

• improved quality for the consumers,

• Uniform quality.

9.3 The export market


The Vietnamese fisheries and aquaculture sector has a very well developed export market reaching out to most parts of the world. However, the export has from time to time faced some difficulties and shortcomings i.e. anti-dumping measures and export of low value products. There is therefore a need for development in the export ori-ented part of the fisheries and aquaculture sector in Viet Nam.


General recommendations The recommendations with respect to the export market include:

• The industry should move away from short-term sales contacts towards long-term business relations with their customers,

• The share of value added and retail packed products should be increased,

• The market knowledge in the industry should be increased,

The export oriented part of the sector is in general well devel-oped but there are still room for im-provements.

With the exception of the implementation of an appropriate le-gal framework, it is believed that the in-dustry can implement the changes itself.

57

• A policy that prevents future anti-dumping measures62 and related issues should be developed and implemented i.e. the state should withdraw from all enterprises and a legal framework for the establishment of sales markets should be estab-lished.(see also 9.4).

With the exception of the policy area, it is in general expected that the industry will manage the development themselves.

Specific recommendations The industry shall take care of the implementation of the changes themselves without any governmental interference with the exception of the policy area.

With respect to the governmental area, the following should be implemented as soon as possible:

• The state should withdraw from all active participation in companies in the sec-tor.



• A more diversified processing sector,

• Increased market knowledge in the sector,

• Increased export value,

• A pure private sector operating under market economic conditions.

9.4 Governmental policy and support


The governmental policy and support has been focusing mainly on increasing the fisheries and aquaculture production and the export of aquatic products and has achieved considerable success. However, governmental policy and basic legislation as well as updating of existing legislation, development of product standards, etc. needs to be developed in order to give the sector the best possible framework for develop-ment.

62 The consultants believe that it would be impossible to completely avoid future cases as they can be raised by any group of US producers or processors that experience competitive difficul-ties.. It is difficult for the consultants to see the two cases as justifiable and in the consultants' eyes are an expression of US protectionism rather than anti-dumping.

Development, im-plementation and en-forcement of a legal framework around aquatic products mar-keting is urgently needed

58


General recommendations The recommendations are as follows:

• Development of a policy concerning the domestic market,

• The government should continue the withdrawal from active participation in companies in the sector by continuing the process of privatisation,

• Ensure that the legal framework fulfils the international requirements with re-spect to trade63,

• Development of a complete legal framework for wholesale markets,

• Ensure that existing legislation i.e. tax legislation, is enforced in all areas of the sector,

• Develop and implement quality standards for raw material, transportation and wholesale and retail markets (see 9.2).

Specific recommendations Within the next 1 – 5 years:

• The responsibility for wholesale markets/auctions and transportation of fisheries and aquaculture products are moved from MOH to NAFIQAVED,

• Enforce tax legislation in all market places so one market place is not preferred for another because of tax evasion opportunities.

• Develop and implement legislation for wholesale markets/auctions.

Continuous work to be done by the government:

• Develop and upgrade a policy for the sector including the domestic market.



• A well functioning sector with clear roles and regulations,

• All players in the sector will need to follow the same roles and regulations.

63 The consultants have not, as part of their work, experienced that there are any problems. However, none of the consultants have a legal background.

59

9.5 Programmes assisting in the area Several international donor organisations operate in Viet Nam including the fisheries and aquaculture sector.64 With respect to marketing of fisheries and aquaculture prod-ucts the assistance is limited.

During implementation of the first five years of the FSPS and before this under the SEAQIP project, attention has been given and support has been granted to the mar-keting area. However, this is history and FSPS might support development of a brand for Vietnamese seafood products. No further activities will take place.

Swedish assistance has been given to the fisheries marketing area in the form of fund-ing a project for the Ministry of Trade but there are no plans for further assistance in the area. This is also true for AusAid and GTZ.

64 A list of the ongoing and planned projects is found in annex F of the Fisheries and Aquacul-ture Sector Study, MOFI and the WB, 2005.

.

Annex 1: Minutes of Interim Meeting Event: Interim Meeting Time: 19 April 2005 13.30 - 16.30 Place: MOFI, Ha Noi Participants: Mr. Le Thanh Luu, Director RIA no. 1 Mr. Bui Van Thuong, Vice General Secretary, VINAFIS Ms. Tran Thi Dung, VIFEP Mr. Do Van Nam, Science and technology department MOFI Ms. Nguyen Thai Phuong; Manager, VASEP - Information Chamber Mr. Doan Quang Chien, MOFI Mr. Doan Van Dai, Aquaculture department MOFI Mr. Nguyen Viet Cuong, MOFI Mr. Mai Dui Chinh, Planing and finance department MOFI Ms. Nguyen Hong Mai, NAFIQAVED Ms. Misha Coleman, Country manager, ACIAR Ms. Irmen Mantingh, Fisheries Specialist, FAO - Ha Noi Mr. Pham Trong Yen, Vice Director, MOFI - International Cooperation Department Mr Cuong, MOFI - International Cooperation Department Mr. Ronald Zweig, World Bank; Mr. Tran Cong Ich, Fisheries marketing consultant; Mr. Ole Saugmann Rasmussen, OSR-Consulting

-------------------------------------------------------------------------------------------------------------------------------- 1. Opening of the interim meeting The interim meeting was opened by Mr. Yen that welcomed the participant and thanked the WB and FAO for making the study. He informed that MOFI had found the sector study elaborated in cooperation with the WB very useful. Mr. Zweig explained that the marketing study was a follow up activity on the sector study and additional a study on environmental issues concerning aquaculture and a credit study was to be done in the near future. 2. Presentation by the consultants The consultants gave a brief presentation of the activities carried out so fare65 and the preliminary conclusions and recommendations66 as follows. 2.1 Domestic market and marketing

Preliminary conclusions

65 An English version of the PowerPoint presentation is found in annex 4. 66 A written version of these in English as well as Vietnamese language was forwarded to the participants together with the invitation.

.

Viet Nam is characterised by a high per capita consumption of seafood and most of the capture and aquacul-ture production is consumed on the domestic market.

The hygienic conditions in the domestic marketing chain are poor including the transport system as well as wholesale and retail markets.

There is no clear organisational setup for operation of wholesale markets.

Price information is limited and in general not available for the actors.

Preliminary recommendations

There is a need for development and implementation of quality standards/guidelines for products from capture fisheries and aquaculture.

Quality standards/guidelines should be developed for landing sites and fishing ports.

The domestic distribution systems and channels, including the cold chain, should be developed.

Quality standards/guidelines should be developed and implemented.

Quality standards/guidelines for wholesale markets as well as retail markets should be developed and imple-mented.

A pilot wholesale market should be established. The setup should include organisational and management aspects.

Marketing information should be collected and made available for the actors in the marketing chain. Price information should be available on a daily basis.

2.2. The raw material market


Nearly all raw material from the capture production is traded by wholesalers and this also counts for most of the aquaculture products.

The fishermen have limited access to market and price information.


A legal framework for establishment of wholesale markets/auction should be developed.

A price information system for the capture and aquaculture products should be established in order to facili-tate the actors in the marketing and establish transparency and establish a market price. Price information should be available on a daily basis.

Marketing standards with respect to size and quality grading should be developed and implanted.

A model wholesale market/auction should be established. The setup should include the management aspects.

.

2.3. The processing sector


The export oriented seafood processing industry in Viet Nam is in general well functioning and the production and products standards meet international standards. However, there is a need for improvement of the quality control with respect to the primary producers/raw material.

The product portfolio is limited and mainly consisting of semi-processed products.

The knowledge on the export markets is limited.

Nearly all trade are done by Letter of Credit and long term business relations are limited.

The production facilities for production of products to the domestic market i.e. fish sauce are poor.


There is a need for diversification of the production for export purposes including production of more high value products.

Standards for raw material with respect to size grading should be developed and implemented to facilitate the industry as well as the fishermen and fish farmers.

The marketing knowledge among the exporting companies should be increased including the possible use of other financial instruments than Letter of Credit.

Production facilities oriented towards the domestic market should be improved.

There is a need for establishment of systems for traceability within the sector.

2.4. Governmental policies and assistance


The legal framework for trading and marketing of fisheries and aquaculture products is not completed and fragmented into a large number of decisions making it little understandable for the actors in the marketing chain.

The state is still involved in a number of companies operating in the sector.

With respect to wholesale markets is the responsibility not clearly divided between NAFIQAVED and Minis-try of Health.

Collection, analyse and use of statistical data from the fisheries marketing chain is week


A legal framework for the fisheries and aquaculture marketing chain should be developed and implemented.

.

An efficient statistical colleting and information system should be established in order to facilitate the actors in the marketing chain as well as to be used in the fisheries and marketing management.

The state should withdraw from active participation in companies in the fisheries sector.

The responsibility for all wholesale markets should be transferred to NAFIQAVED.

2.5. Financial aspects


Many fishermen and fish farmers have there working capital needs covered by the wholesaler. Some whole-salers have shares in fishing vessels and aquaculture farms.

The wholesaler's financial involvement in the production makes a free competition and establishment of a fair market price impossible.


There is an urgent need for establishment of credit systems for fishermen and fish framers especially oriented towards credits to cower the needs for working capital

2.6. Human resource development


The knowledge's on marketing is limited among most actors in the marketing chain


There is a need for training for all actors involved in the marketing chain

3. Comments from the participants The following comment was given by the participants: The credit issue was briefly discussed and it was mentioned that the establishment of wholesale markets also could lead to competition between the wholesalers with respect to money lending. The credit issue will be specifically addressed in a specific WB study. The consequences of WTO accession should be addressed. The consequences of the increased use of fish for feeding purpose in the aquaculture sector should be taken into account. Tariff and non tariff barriers should be analysed and included in the report. The report should include information on quality management and assurance including assessment of the ca-pacity of the local authorities.

.

It was from many participants mentioned that the role of the middlemen should be addressed in the study in-cluding the power of these.

The consultants were informed about additional legislative material in force in the sector.

It was mentioned that there in the Quality are not only was overlap between NAFIQAVED and MON in the wholesale area but also in other areas.

The participants stated that there was a need for clear and detailed conclusions and recommendations in the report.

4. Closing of interim meeting Mr. Yen and Mr. Zweig thanked the participant for there active participation in the meeting and found the workshop very useful for the consultants work.

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Annex 2: Capture and Aquaculture Production Table 1: Capture and aquaculture production in tons

Year Capture Aquaculture Total 1991 712,377 347,910 1,060,287 1992 721,681 350,083 1,071,764 1993 798,057 374,472 1,172,529 1994 889,998 397,168 1,287,166 1995 954,640 459,950 1,414,590 1996 962,500 411,000 1,373,500 1997 1,078,630 492,000 1,570,630 1998 1,151,400 582,790 1,734,190 1999 1,212,800 614,510 1,827,310 2000 1,280,590 723,110 2,003,700 2001 1,395,783 891,695 2,287,478 2002 1,434,800 976,100 2,410,900 2003 1,856,000 998,000 2,854,000 2004 1,923,000 1,150,000 3,073,000

Source: VASEP Table 2: Increase in percentage of previous year

Capture Aquaculture Total 1992 1.3% 0.6% 1.1%1993 10.6% 7.0% 9.4%1994 11.5% 6.1% 9.8%1995 7.3% 15.8% 9.9%1996 0.8% -10.6% -2.9%1997 12.1% 19.7% 14.4%1998 6.7% 18.5% 10.4%1999 5.3% 5.4% 5.4%2000 5.6% 17.7% 9.7%2001 9.0% 23.3% 14.2%2002 2.8% 9.5% 5.4%2003 29.4% 2.2% 18.4%2004 3.6% 15.2% 7.7%

Source: VASEP

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Annex 3: Wholesale Markets in Viet Nam Wholesale markets are, at the moment, not a normal part of the distribution net for fisheries and aquaculture products in Viet Nam. However, some wholesale markets are already operating, some are under construction and other is under consideration. The consultants has visited some of the existing wholesale markets and discussed plans for establishment of new with local as well as central administration.

1. Exiting wholesale markets 1.1 Ha Noi In Ha Noi two wholesale markets for fisheries and aquaculture products is at present in operation:

• Yen So market for live freshwater fish; • Vinh Tuy wholesale market

1.1.1 Yen So market The Yen So wholesale market mainly trade live freshwater fish from aquaculture sector in the north of Viet Nam. The market was established in 1995 by the fish farmers and traders themselves without any public involvement. It is located in the Yen So district, the old fish farming district of Ha Noi. Originally the market was located along the roadside but has been moved by the police do to problems with the traffic.

Up to some 200 fish farmers, wholesalers and other traders are selling at the Yen So market. In peak season the daily turnover can be 100 tons/day and in average it is around 50 tons/day. The buyers are retailers, restaurants etc. Many of the costumers will sell the fish on the markets around in Ha Noi. The hygienic conditions in the market are very poor.

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1.1.2 Yen So market At Vinh Tuy various fisheries and aquaculture products are sold including iced and frozen products. The prod-ucts come from other provinces and are taken to the market by wholesalers. There are 20 - 30 middlemen operat-ing at the market selling some 0.5 - 1 tons each, given a total turnover at the market around 15 tons/day.

They sell mainly for restaurants and supermarket and it is mainly high value product like i.e. shrimp, lobsters, crab, scallop etc. The prices for flower shrimp (8 - 10 pieces pr kg) were on the 1 April 2005:

• Approx. 250,000 VND/kg for live shrimp; • Approx. 170,000 VND for iced shrimp

The hygienic conditions in the market are very poor.

1.2 Ho Chi Minh City In Ho Chi Minh City three wholesale markets for fisheries and aquaculture products is at present in operation:

• Chang Hung wholesale market; • Xom Cui wholesale market; • Can Gio Aqua-products trading centre

1.2.1 Chang Hung wholesale market

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The Chang Hung wholesale market is located out of the city centre in Ho Chi Minh City. The market where moved from the centre on the city to its present location in the end of 2003. The market is managed by the SATRA Company that belongs to the Peoples Committee in Ho Chi Minh City.

The present location is temporary and construction of a new wholesale market is started and expected to be in operation in 2006. The market covers approx. 8,000 square meters and around 200 wholesalers from Ho Chi Minh City (approx. 65%) as well as other provinces is operating at the market. The customers being retailers, other middlemen as well as processors and the management estimated the daily turnover of some 200 - 300 tons/day but processors and other customers claims that is much higher. The wholesalers operating the pays a monthly rent of approx. 75,000 VND/m2 and besides this they pay for elec-tricity, water etc. according to consumption. It is possible to buy ice at the market. The hygienic conditions in the market are very poor.

1.2.2 Xom Cui wholesale market The Xom Cui wholesale market has been at its present location in decades and is described as a traditional whole-sale market. The wholesale market belongs to the Peoples Committee in Ho Chi Minh City. The market covers an area of approx. 1,000 m2 and there are around 100 shops at the market (50 big and 50 small). The daily turnover is 180 - 300 tons of products.67 The wholesalers are not paying any rent but a fee being: • 2,000 VND/day for small shops; 67 The turnover on the market is calculated by the manager of the market Mr. Hoang as follows. 60 trucks bringing 3 - 5 tons products each are daily coming to the market. The fact that this market has this turnover indicates also that the information on the turnover at the Chang Hung wholesale market is underestimated.

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• 3,000 VND/day for big shops

Besides this they pay for electricity, water etc. according to consumption. The hygienic conditions in the market are very poor.

It is the plan to close the market when the new wholesale market in Bies Dien is constructed and move the activi-ties to this wholesale market. The hygienic condition is poor and traffic problems around the market were observed while visited. 1.2.3 Can Gio Aqua-products trading Centre The Can Gio Aqua-products centre were established in April 2002 mainly to deal with farmed shrimp. The trad-ing centre is under the responsibility of Ho Chi Minh City People’s Committee and managed by the CHOLIMEX company as a non profit operation. Its main objective is to establish trading relationships between aquaculturalists and fishery processors and exporters.

The centre is located 70 km west of Ho Chi Minh City and operated in as follows:

• In order to acquire shrimp products, shrimp traders and processing companies need to fill out a registration form either directly by hand or through telephone. Ordering through telephone came from customers far from the city like Tien Giang, Kien Giang, Ben Tre, and Ba Ria - Vung Tau provinces. The information necessary to register is name and address of the shrimp trader, estimated quantity for the whole year and by given month to be purchased, and the proposed prices for different types of the products.

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• Sellers at the Centre are the shrimp farmers; they also have to fill out a registration form at the Centre’s office. In this form, the farmers provide information on size, quantity and prices for different types of shrimp offered.

Based on the proposed prices provided in the registration forms by both sellers and buyers, discussions and bar-gaining would be held to reach a final agreement on prices, size, location and time of the trading, through a memorandum or trading contracts. Another meeting at site or sample harvests may be done to provide more de-tailed information on the products before the trade.

Besides this the Centre worked as agent for feed suppliers and were also providing credit to local farmers and could in many ways said to be operating like a middleman. The procedure established seems unnecessary difficult.

From the establishment in April 2002 until March 2004 approx. 12,000 tons of shrimp were traded through the Centre. In March 2003 5,000 ha of shrimp ponds in the area, in practice meaning all, were infected with White Spot Decease and the production stopped and consequently the operation of the Centre. The shrimp production and operation of the Centre is not restated by April 2005.

The total production of shrimp in the area was, before the outbreak of WSD, approx. 35,000 tons/year meaning that less tan 20% was traded through the market. There are several reasons for this:

• The farmers were in average obtaining a price of 80,000 VND/kg at the market while the wholesalers were offering 82,000 VND/kg as they could sell to restaurants etc.

• The processors found it difficult and time consuming to trade at the market.

• The amount available at the market was low compared to the processors demand

• The location was wrong

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1.3 Da Nang A wholesale market in Da Nang is presently operating in the Thuan Phuoc fishing port funded by ADB and opened in 2001. The port was visited by a FAO team some three years ago and they describe the situation as fol-lows.

"It is estimated that there are about 20 boats landing per day, 40% of which are boats coming from other prov-inces than Da Nang city. In 2001, the volume traded at the port was about 30,000 MT, 60% of which were landed by boats; the remaining 40% were transported from other provinces inland. Hence Thuan Phuoc is not only a fishing port, but also an inland regional fisheries trading centre, which attracts traders and fishers from different provinces in the region.

In the port, there are about 10 wholesalers, whose trading volume accounted for 70 - 80% of the total. In addi-tion, there are 400 - 500 traders regularly operating at the port and channelling fisheries products to markets in the city or near-by regions. This shows that Thuan Phuoc functions also as a regional fish market for the city and the regions near-by"68.

However, when this team visited Da Nang they were informed that a new wholesale market was under prepara-tion (se section 2) and that the Thuan Phuoc port as well as the wholesale was expected to close and they area used for tourism purposes.

The team visited Thuan Phuoc port and market on Sunday the 10 of April 2005 and meet with fishermen and wholesalers as well as official representatives from the port.

At present 30 - 50 vessels are daily landing some 2 - 10 tons each. There are approx. 30 bigger wholesale compa-nies operating at the market and up to 5 - 600 smaller wholesalers are from time to time using the market. Besides 68 FAO: Fish marketing and credit in Viet Nam p. 73

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the fish there are landed in the port fish from other provinces are brought to the market by wholesalers and traded here.

The port and wholesale market is a public company charging the following:

• Vessels with up to 22 Hp 15,000 VND/12 h; • Wholesalers 1,000 VND/m2/day; • Trucks 15,000 VND when passing the gate

1.4 Van Don in Quang Ninh province At present there are two wholesale markets in Quang Ninh province, one at Coto Island and one in Van Don, the last one visited by the consultants on the 13 of April 2005.

Between 300 and 400 vessels are fishing from Van Don port and furthermore 30 collecting vessels are operating from here. The wholesale takes place directly in the port under rather primitive conditions and nearly all fish is sold for Chinese customers.

2. Wholesale market under design or construction

Several wholesale markets are at present under establishment and feasibility studies for other is under preparation.

2.1 Central fish market in Bac Leu

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It is decided to build a wholesale market for shrimp in Bac Leu and the feasibility study as well as the layout has been made and approved and construction work has gone for tendering. The total production costs are approx. 20 billion VND finances as follows:

• Approx. 10 billion VND from MOFI; • Approx. 10 billion VND from traders, processors and other sources

2.2 Wholesale market in Ha Noi The Peoples Committee in Ha Noi want to establish a wholesale market and have elaborated a feasibility study. 2.3 New wholesale market in Ho Chi Minh City A new wholesale market is at the moment under construction in Binh Dien in Ho Chi Minh City. The fish whole-sale is constructed as a part of a part of a wholesale centre for agriculture and fisheries products. The Bien Dinh market is in total planned to cover 65 ha and include 6 market let-out buildings each covering 2ha. Two of these will be for fisheries products.

Besides the 6 market hales there will be treatment systems for water and wastewater and all kind of infrastructure (stores, laboratories, office facilities etc.), transportation systems etc. Binh Dien is located at the river side and the wholesale market will have its own port. There are good connections to national highway no. 1. The total investment is approx. 100 million USD (approx. 30% will come from Peoples Committee, 30% from SATRA (the company that runs the auction in Ho Chi Minh City among other things) and the remaining from loan).The wholesale market will be established in two steps, where the first step including the two hales for sea-food and the water treatment system. The construction work has been going on for some time and the seafood market is expected to be in operation before the end of 2005. 2.4 New wholesale market/auction in Ho Chi Minh City

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MOFI is at the moment involved in preparation of a feasibility study for establishment of a new wholesale mar-ket/ fish auction in Ho Chi Minh City. The wholesale market/fish auction is planned to be established in connec-tion with the establishment of a fisheries centre in the Muong Chuopi fishing port. The Muong Chuopi fishing port centre will covers in total 71 ha of which 55 ha is for fish processing plants and cold stores and the 16 ha for service facilities. The total investment is approx. 35 million USD that will come from many investors including foreign investment. The wholesale market will cover an area of 11,000 m2 and be in a two floor building. The total turnover in the fish auction is expected to be around 100,000 tons/year, developing as follows: • 210 tons a day in 2007;

• 480 tons a day in 2010

DOFI in Ho Chi Minh City is at the moment investigating how to organise the auction and it is under considera-tion to have it managed by an Australian company that also organise the wholesale market in Sidney.

2.5 New wholesale market in Nha Trang A new wholesale market is at present at construction in Nha Trang. The total production costs are approx. 20 billion VND finances as follows:

• Approx. 10 billion VND from MOFI; • Approx. 10 billion VND from traders, processors and other sources

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The market is expected to be in operation by the end of 2005 and is located in connection with Vinh Truong, one out of three fishing ports in Nha Trang. The fishing port of Vinh Truong is the homeport of more than 300 ves-sels and approx. 50 wholesale companies are operating in the port. The daily landing is between 200 and 500 tons.

The construction of the wholesale market is close to be finalised and it is constructed as a two floor building with 2,700 m2 in each floor giving a total area of 5,400 m2. In connection with the wholesale market various service facilities for fishermen is established such as a block ice plant and a mechanical workshop. The landings in the province are about 60,000 tons/year but the province hopes to attract fishermen from other provinces so the total landings will be around 120,000 tons/year, mainly consisting of: • Tuna; • Pelagic fish; • Aquaculture products that also will be traded via the wholesale market

The DOFI is at the moment thinking out how to organise the wholesale market and an auction system is under consideration.

2.5 New wholesale market in Da Nang The Peoples committee in Da Nang is presently constructing a new fishery industry zone that includes the follow-ing: • Fishing port; • Service facilities (ice plant, mechanical workshop etc.) • Wholesale market • Processing area where processing companies can rent an area and build themselves

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The total area is approx. 30 ha. The wholesale market has not been constructed yet. The area has good connection to the container harbour.

2.6 New wholesale market in Cua Ong - Quang Ninh province DOFI in Quang Ninh province have elaborated a feasibility study for construction of a fisheries centre in Cau Ong. The main idea is that fishing and fish processing shall be moved from Ha Long City that shall concentrate on tourism. Besides construction of the new centre in Cau Ong it is the plan to upgrade the facilities at Coto Is-land.

The centre is planned to cover:

• 4 ha for port and service facilities including wholesale market; • 2 ha reserved for processing plants; • 2.7 ha for a shipyard; • 1,4 ha for housing of workers

The total investment will be approx. 58 million VND. The wholesalers and processing companies met by the con-sultants find the location to be bad.

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Annex 4: Export of Aquatic products Table 1: Seafood export to main countries in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 465,901 537,968 582,902 754,946 26% 27% 26% 32% 115% 108% 130%USA 489,035 655,655 782,238 592,824 28% 32% 35% 25% 134% 119% 76%ASEAN 64,930 79,529 73,080 165,681 4% 4% 3% 7% 122% 92% 227%EU 106,716 84,404 127,240 243,938 6% 4% 6% 10% 79% 151% 192%South Korea 106,708 139,981 0% 0% 5% 6% 131%China + HK

316,719 302,261 147,786 131,198 18% 15% 7% 6% 95% 49% 89%

Taiwan 71,056 105,916 0% 0% 3% 4% 149%Other 334,185 363,005 325,685 224,515 19% 18% 15% 10% 109% 90% 69%Total 1,777,486 2,022,822 2,216,695 2,358,999 100% 100% 100% 100% 114% 110% 106%Source: VASEP Table 2: Export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 76,896 96,251 98,310 118,042 4% 5% 4% 5% 125% 102% 120%USA 70,931 98,665 123,472 89,768 4% 5% 6% 4% 139% 125% 73%ASEAN 22,813 29,183 28,536 42,650 1% 1% 1% 2% 128% 98% 149%EU 30,442 31,368 41,200 75,411 2% 2% 2% 3% 103% 131% 183%South Korea 56,021 69,944 0% 0% 3% 3% 125%China + HK

68,179 77,175 42,902 47,720 4% 4% 2% 2% 113% 56% 111%

Taiwan 19,668 31,195 0% 0% 1% 1% 159%Other 89,572 111,400 48,388 44,018 5% 6% 2% 2% 124% 43% 91%Total 358,833 444,042 458,497 518,748 100% 100% 100% 100% 124% 103% 113%Source: VASEP

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Table 3: Export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 6.06 5.59 5.93 6.40 122% 123% 123% 141% 92% 106% 108%USA 6.89 6.65 6.34 6.60 139% 146% 131% 145% 96% 95% 104%ASEAN 2.85 2.73 2.56 3.88 57% 60% 53% 85% 96% 94% 152%EU 3.51 2.69 3.09 3.23 71% 59% 64% 71% 77% 115% 105%South Korea 1.90 2.00 39% 44% 105%China + HK

4.65 3.92 3.44 2.75 94% 86% 71% 60% 84% 88% 80%

Taiwan 3.61 3.40 75% 75% 94%Other 3.73 3.26 6.73 5.10 75% 72% 139% 112% 87% 207% 76%Average 4.95 4.56 4.83 4.55 100% 100% 100% 100% 92% 106% 94%Source: VASEP Table 4: Seafood export main commodities in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Shrimp 781,474 966,709 1,058,122 1,261,123 44% 48% 48% 53% 124% 109% 119%Fish 310,070 462,781 466,528 552,392 17% 23% 21% 23% 149% 101% 118%Squid, cuttlefish + octopus

118,415 142,786 113,880 162,462 7% 7% 5% 7% 121% 80% 143%

Dried 188,503 138,368 73,720 101,847 11% 7% 3% 4% 73% 53% 138%Other 379,023 312,177 504,444 281,176 21% 15% 23% 12% 82% 162% 56%Total 1,777,485 2,022,821 2,216,694 2,359,000 100% 100% 100% 100% 114% 110% 106%Source: VASEP

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Table 5: Export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Shrimp 87,388 115,656 125,209 141,197 5% 6% 6% 6% 132% 108% 113%Fish 104,564 143,236 154,978 209,083 6% 7% 7% 9% 137% 108% 135%Squid, cuttlefish + octopus

43,120 55,847 45,624 60,535 2% 3% 2% 3% 130% 82% 133%

Dried 34,362 35,756 19,449 30,089 2% 2% 1% 1% 104% 54% 155%Other 89,399 93,548 113,237 77,843 5% 5% 5% 3% 105% 121% 69%Total 358,833 444,043 458,497 518,747 100% 100% 100% 100% 124% 103% 113%Source: VASEP Table 6: Export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Shrimp 8.94 8.36 8.45 8.93 181% 183% 175% 196% 93% 101% 106%Fish 2.97 3.23 3.01 2.64 60% 71% 62% 58% 109% 93% 88%Squid, cuttlefish + octopus

2.75 2.56 2.50 2.68 55% 56% 52% 59% 93% 98% 108%

Dried 5.49 3.87 3.79 3.38 111% 85% 78% 74% 71% 98% 89%Other 4.45 3.61 92% 79% 81%Average 4.95 4.56 4.83 4.55 100% 100% 100% 100% 92% 106% 94%Source: VASEP

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Table 7: Export of shrimp to main countries in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 289,562 347,392 388,517 522,734 37% 36% 37% 41% 120% 112% 135%USA 339,016 467,332 513,276 392,485 43% 48% 49% 31% 138% 110% 76%ASEAN 12,572 21,884 16,617 92,702 2% 2% 2% 7% 174% 76% 558%EU 52,448 20,088 37,891 63,684 7% 2% 4% 5% 38% 189% 168%South Korea 10,218 42,331 0% 0% 1% 3% 414%China + HK

25,063 37,205 19,683 19,933 3% 4% 2% 2% 148% 53% 101%

Taiwan 22,721 15,208 0% 0% 2% 1% 67%Other 62,813 72,808 49,198 112,046 8% 8% 5% 9% 116% 68% 228%Total 781,474 966,709 1,058,121 1,261,123 100% 100% 100% 100% 124% 109% 119%Source: VASEP Table 8: Shrimp export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 35,325 49,252 51,262 62,739 40% 43% 41% 44% 139% 104% 122%USA 29,315 45,801 52,439 36,687 34% 40% 42% 26% 156% 114% 70%ASEAN 1,514 2,691 1,985 8,692 2% 2% 2% 6% 178% 74% 438%EU 9,756 4,384 5,622 8,830 11% 4% 4% 6% 45% 128% 157%South Korea 3,377 6,416 0% 0% 3% 5% 190%China + HK

3,153 4,284 2,881 2,817 4% 4% 2% 2% 136% 67% 98%


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Table 9: Shrimp export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 8.20 7.05 7.58 8.33 92% 84% 90% 93% 86% 107% 110%USA 11.56 10.20 9.79 10.70 129% 122% 116% 120% 88% 96% 109%ASEAN 8.30 8.13 8.37 10.67 93% 97% 99% 119% 98% 103% 127%EU 5.38 4.58 6.74 7.21 60% 55% 80% 81% 85% 147% 107%South Korea 3.03 6.60 36% 74% 218%China + HK

7.95 8.68 6.83 7.08 89% 104% 81% 79% 109% 79% 104%

Taiwan 11.95 6.18 141% 69% 52%Other 7.54 7.88 8.57 8.93 84% 94% 101% 100% 104% 109% 104%Average 8.94 8.36 8.45 8.93 100% 100% 100% 100% 93% 101% 106%Source: VASEP Table 10: Export of fish to main countries in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 49,595 56,466 54,746 66,206 16% 12% 12% 12% 114% 97% 121%USA 98,191 144,980 209,628 141,424 32% 31% 45% 26% 148% 145% 67%ASEAN 16,614 23,296 24,374 39,838 5% 5% 5% 7% 140% 105% 163%EU 14,437 21,716 36,595 110,831 5% 5% 8% 20% 150% 169% 303%South Korea 16,211 45,975 0% 0% 3% 8% 284%China + HK

58,641 114,560 55,829 61,571 19% 25% 12% 11% 195% 49% 110%


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Table 11: Shrimp export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 14,783 15,278 14,749 20,695 5% 3% 3% 4% 103% 97% 140%USA 25,353 38,993 55,390 42,619 8% 8% 12% 8% 154% 142% 77%ASEAN 8,229 12,062 13,354 21,187 3% 3% 3% 4% 147% 111% 159%EU 4,701 7,898 13,380 37,826 2% 2% 3% 7% 168% 169% 283%South Korea 5,722 26,357 0% 0% 1% 5% 461%China + HK

19,901 30,289 20,247 27,446 6% 7% 4% 5% 152% 67% 136%

Taiwan 17,641 8,183 0% 0% 4% 1% 46%Other 31,598 38,716 14,495 24,770 10% 8% 3% 4% 123% 37% 171%Total 104,565 143,236 154,978 209,083 100% 100% 100% 100% 137% 108% 135%Source: VASEP Table 12: Fish export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 3.35 3.70 3.71 3.20 113% 114% 123% 121% 110% 100% 86%USA 3.87 3.72 3.78 3.32 131% 115% 126% 126% 96% 102% 88%ASEAN 2.02 1.93 1.83 1.88 68% 60% 61% 71% 96% 95% 103%EU 3.07 2.75 2.74 2.93 104% 85% 91% 111% 90% 99% 107%South Korea 2.83 1.74 94% 66% 62%China + HK

2.95 3.78 2.76 2.24 99% 117% 92% 85% 128% 73% 81%

Taiwan 2.04 1.86 68% 70% 91%Other 2.30 2.63 2.28 2.88 77% 81% 76% 109% 114% 87% 126%Average 2.97 3.23 3.01 2.64 100% 100% 100% 100% 109% 93% 88%Source: VASEP

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Table 13: Export of squid, cuttlefish and octopus to main countries in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 61,634 66,049 57,439 72,497 52% 46% 50% 45% 107% 87% 126%USA 3,335 3,343 3,846 3,905 3% 2% 3% 2% 100% 115% 102%ASEAN 5,590 5,764 5,171 4,027 5% 4% 5% 2% 103% 90% 78%EU 9,969 13,979 17,302 22,670 8% 10% 15% 14% 140% 124% 131%South Korea 16,163 31,099 0% 0% 14% 19% 192%China + HK

13,496 15,052 5,832 12,620 11% 11% 5% 8% 112% 39% 216%

Taiwan 6,354 11,401 0% 0% 6% 7% 179%Other 24,391 38,599 1,774 4,241 21% 27% 2% 3% 158% 5% 239%Total 118,415 142,786 113,881 162,460 100% 100% 100% 100% 121% 80% 143%Source: VASEP Table 14: Squid, cuttlefish and octopus export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 13,403 16,228 14,434 17,602 11% 11% 13% 11% 121% 89% 122%USA 1,490 1,396 1,691 1,553 1% 1% 1% 1% 94% 121% 92%ASEAN 1,953 1,995 1,989 1,510 2% 1% 2% 1% 102% 100% 76%EU 5,848 8,095 9,690 11,442 5% 6% 9% 7% 138% 120% 118%South Korea 12,032 17,072 0% 0% 11% 11% 142%China + HK

4,265 5,499 2,312 4,452 4% 4% 2% 3% 129% 42% 193%

Taiwan 2,596 4,961 0% 0% 2% 3% 191%Other 16,161 22,633 880 1,942 14% 16% 1% 1% 140% 4% 221%Total 43,120 55,846 45,624 60,534 100% 100% 100% 100% 130% 82% 133%Source: VASEP

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Table 15: Squid, cuttlefish and octopus export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 4.60 4.07 3.98 4.12 167% 159% 159% 153% 89% 98% 103%USA 2.24 2.39 2.27 2.51 82% 94% 91% 94% 107% 95% 111%ASEAN 2.86 2.89 2.60 2.67 104% 113% 104% 99% 101% 90% 103%EU 1.70 1.73 1.79 1.98 62% 68% 72% 74% 101% 103% 111%South Korea 1.34 1.82 54% 68% 136%China + HK

3.16 2.74 2.52 2.83 115% 107% 101% 106% 87% 92% 112%

Taiwan 2.45 2.30 98% 86% 94%Other 1.51 1.71 2.02 2.18 55% 67% 81% 81% 113% 118% 108%Average 2.75 2.56 2.50 2.68 100% 100% 100% 100% 93% 98% 108%Source: VASEP Table 16: Export of dried products to main countries in USD 1,000 Total seafood export in USD 1,000 In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 14,577 23,704 0% 0% 20% 23% 163%USA 690 305 416 2,953 0% 0% 1% 3% 44% 136% 710%ASEAN 6,562 10,212 9,604 15,795 3% 7% 13% 16% 156% 94% 164%EU 338 252 126 659 0% 0% 0% 1% 75% 50% 523%South Korea

18,838 23,494 18,958 21,734 10% 17% 26% 21% 115%

China + HK

138,950 82,491 26,782 21,146 74% 60% 36% 21% 59% 32% 79%

Taiwan 1,927 8,979 0% 0% 3% 9% 466%Other 23,126 21,614 1,330 6,877 12% 16% 2% 7% 93% 6% 517%Total 188,504 138,368 73,720 101,847 100% 100% 100% 100% 73% 53% 138%Source: FAO

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Table 17: Dried products export to main countries in tons Total seafood export in tons In percentage of total In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 1,920 2,941 0% 0% 3% 3% 153%USA 130 79 140 775 0% 0% 0% 1% 61% 177% 554%ASEAN 1,647 3,142 3,057 5,945 1% 2% 4% 6% 191% 97% 194%EU 70 81 74 180 0% 0% 0% 0% 116% 91% 243%South Korea

3,016 3,664 4,912 7,301 2% 3% 7% 7% 134% 149%

China + HK

24,407 22,105 7,526 7,281 13% 16% 10% 7% 91% 34% 97%

Taiwan 1,297 3,779 0% 0% 2% 4% 291%Other 5,092 6,685 523 1,887 3% 5% 1% 2% 131% 8% 361%Total 34,362 35,756 19,449 30,089 100% 100% 100% 100% 104% 54% 155%Source: VASEP Table 18: Squid, cuttlefish and octopus export prices in USD/kg Seafood export prices in USD/kg In percentage of average In percentage of previous year 2001 2002 2003 2004 2001 2002 2003 2004 2002 2003 2004Japan 7.59 8.06 0% 200% 238% 106%USA 5.31 3.86 2.97 3.81 97% 100% 78% 113% 73% 77% 128%ASEAN 3.98 3.25 3.14 2.66 73% 84% 83% 78% 82% 97% 85%EU 4.83 3.11 1.70 3.66 88% 80% 45% 108% 64% 55% 215%South Korea 3.86 2.98 102% 88% 77%China + HK

5.69 3.73 3.56 2.90 104% 96% 94% 86% 66% 95% 82%

Taiwan 1.49 2.38 39% 70% 160%Other 4.54 3.23 2.54 3.64 83% 84% 67% 108% 71% 79% 143%Average 5.49 3.87 3.79 3.38 100% 100% 100% 100% 71% 98% 89%Source: VASEP

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Annex 5: Reference Documents Anrooy & Ha 2003 Vertical chain cooperation in the Vietnamese fisheries products channels, Ha Noi March 2003´ Dang & Ruckes 2003 Fisheries marketing in Vietnam: Current situation and perspectives for development; Ha Noi March 2003 Edwards, Tuan and Allan 2004 A survey of marine trash fish and fish meal as aquaculture feed ingredients in Viet Nam. ACIAR working paper no. 57 FAO 2004 Fish marketing and credit in Viet Nam, FAO fisheries technical

papers no. 468 GLOBEFISH 2004 Fishery Industry Profile Viet Nam. GLOBEFISH research programme volume 75 Greenhalgh, Peter 2004 Sanitary and Phyto-Sanitary (SPS) Measures and Technical Barriers to Trade (TBT), FAO Project PR 26109 INFOFISH 2004 Study on Fish Distribution in Guangdong INFOFISH 2004 Seafood market study in Shanghai KPMG & 2001 Final overall diagnostic report - Diagnostic Review of 3 SOE in the

Fishery Ministry of Finance Industry Lem & Nhan 2003 Module on economic modelling and fish consumption - report, Ha Noi March 2003 Long, Nguyen 2001 Responsible Management of Marine Fisheries in Viet Nam MOFI 20054 Fishery sector and WTO accession MOFI & WB 2005 Fisheries and Aquaculture Sector Study, Final report, February 17, 2005 Ministry of Trade 2004 Report on group item seafood (in Vietnamese language), Ha Noi,

December 2004. Study financed by MPI Institute of research and SIDA PricewaterhouceCoopers 2004 Seaprodex General Corporation. Report on September 2004 deliverables

for GC level Schoen, Christian 2004 Stimulating Local Economic Development along the Pangasius Value Chain in Mekong Delta, PowerPoint presentation Long Xuyen, December 2004 SEAQIP 2003 Cold stores in Viet Nam: Present situation and future demand

.

Tietze 2003 Report on financing of production and marketing of fish and fishery products in Viet Nam, Ha Noi 2003 Tung, Thanh and Phillips 2004 A Case Study of Viet Nam, Policy Research - Implication of Liberalisation

of Fish Trade for Developing Countries, FAO Project no PR 26109 UNDP 2003 Asia Pacific Regional Initiative on Trade, Economic Governance and

Human Development. Country study: Trade in Fisheries and Human Development Viet Nam by Lam Quoc Tuan, Ha Noi May 2003

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Annex 6: Important legal documents

This annex lists the major laws, decrees, circulations, ordinances and guidelines with respect to fisheries and aqua-culture marketing. The Policy area The resolution of the 6th Party Central Committee’s Conference (1986) has opened the market economy in Vietnam and it built three great economical programs: development of foods for people, development of goods for consumers and development of export. The fisheries industry is to be a key economic sector for the cause of national economy.

The Government had "decree 13 CP" issued dated on March 2, 1993 for encourage of development of fisheries sector. In the decree stimulated fisheries sector on the increase areas and productivity of aquaculture, development of fisheries capture, increase of investment new technology, new processing factories for exporting and also supply investment incentive capital, incentive credit for developing of fisheries sector

The Government has approved "fisheries aquaculture program for period 1999-2010" decision 224/1999/QD-TTG. The strategic objectives of this program are increase the fisheries aquaculture production in the year 2010 reach more 2mill tons and earn 3 bill USD for export.

The Government has decision on the development of fisheries seeds issued dated on August 25th 2000. .

The government has approved "fish offshore catching program for period 1998-2010". The strategic objectives of this program are increase the fish offshore catching to the year 2010 reach more 600,000 MT and decrease of inshore catching and protect of fisheries resources .

The government has approved "program for protect and development of fisheries resources to the year 2010" decision 131/2004/QD-TTG

The government has approved "Export strategies for Vietnam’s fisheries to 2005" decision 251/1998/QD-TTG. The strategic program: industrialization, modernize of fisheries industry and expand export markets in-cludes: increase of promotion operations, supply of market information and increase diplomatic activities for trad-ing.

A new Fisheries Law passed by the National Assembly in November 2003, and went into effect on July 1, 2004. The Fisheries Law has 10 chapters 62 articles. It provides a much-improved basis for management of the capture fisheries and aquaculture sectors, including the potential for the involvement of stakeholders.

Quality and product safety Ordinance on Commodity Quality – 1999

Ordinance on Measurements – 1999

Ordinance on food hygiene and safety, National Assembly Standing Committee no. 12/2003/-UBTVQH11

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Governments decree an the implementation of some articles in detail of Ordinance on food hygiene and safety, Government no. 163/2004/ND-CP

NAFIQAVED paper dated 15 October 2004 (ref 1877/CLTY-HTQT) on strategy for development of NAFIQAVED´s services in the next 10 years

Regulation on inspection of production conditions of fishing vessels, landing sites, fish markets, middle-men/collectors, and processing establishments

Regulation on certifications and checks of quality and food safety of fisheries products before placing on the mar-ket (domestic consumption and export)

Regulation on monitoring hygiene and safety conditions of bivalve molluscs harvesting areas

Regulation on monitoring certain substance residues in aquaculture animals and aquaculture products

Sector Standards of food safety criteria and testing methods for fisheries products

Regulations of NAFIQAVED

List of criteria for inspection of production conditions of fishing vessels, landing sites, fish markets, middle-men/collectors, processing establishments

Manual for Laboratory Management

Manual for the Implementation of Monitoring Program for Monitoring Certain Substance Residues in Aquaculture Animals and Aquaculture Products

Manual for Hygiene Control of Bivalve Mollusc Harvesting Areas

Manual for the Implementation of GAP, CoC in Aquaculture (under construction)

Manual for Laboratory Proficiency Test (under construction)

Fulfilling TBT and SPS requirements of fisheries import markets, requirements:

Processing establishments must have HACCP plans and processing facilities and equipment meet health require-ments and standards.

Each lot of products must be certified in accordance with requirements of import countries and accompanied by a regulated health certificate.

Marketing area Trading law 1998 and decree 57/1998/ND-CP issued on December 1998 that stipulate on the import, export operations and processing and agents.

.

Government had "Decision 80/2002/QD-TTG on encouragement the cooperation between farmers, proc-essors, scientists and banker to consume of agriculture and fisheries products". The Government will sup-ply lands, investment capitals, credits for concerned projects.

Financial, credit and tax

Ordinance of commission for secretary of the Party central committee issued dated on May 25th, 1996 for long term loan with low interest for developing of fisheries sector

The Government had Decision 393/TTG issued dated on June 9th 1997 on management and using credits for building offshore fishing boats

Decision of Ministry of Finance 103/QD/ BTC issued dated on February 15th 1998 on apply the export tax rate 0% for fisheries products.

Government’s decision 195/1999/QD-TTG issued dated on September 27th 1999 for establishment of ex-port assistant fund

Ministry of Trade’s decision 1555/1999/QD-BTM issued dated on December 30th 1999 on reward for stimulate of export