While the consumer goods distribution chains like large shops, supermarkets and trading centrers are mushrooming in major cities, the agricultural product distribution networks remain weak in rural areas, which account for more than 70 percent of the national population. Agricultural services, including fertiliser, pesticide and animal feed in the Mekong River Delta- the granary of the whole country are far from matching consumer goods distribution systems with hundreds of foreign giants. Agricultural products are only known through the newly-emerging coffee trademarks such as Trung Nguyen and G7. Only recently have Vietnamese agricultural products begun to find their way into Metro supermarket chains.

For a long time, traders have played an intermediary role in attracting farmers into the market. Selling goods is never the strength of farmers or producers who are unfamiliar with market prices, product quality and where to buy products. Therefore, their products are sold at low prices. Not including staple export items such as rice and seafood, people have little information about the consumption markets and prices of other agricultural products as their prices vary considerably. For instance, fruits and vegetables are sold in gardens at price levels five or 10 times lower than those in cities. Cattle and poultry products are also in the same situation.

Normally, pork sellers enjoy between 20-30 percent of product’s value while 70-80 percent goes to those responsible for transport and processing. This is grossly unfair as farmers are those who produce abundant volumes of agricultural products but are compelled to keep selling at low prices, sometimes lower than production cost. The on-going sugarcane harvest in the Mekong River Delta is a typical case in point.  Sugar mills have agreed the buying price of VND350 per kg and while farmers’ production cost is VND260 per kg, traders pay only VND200-250 per kg. Despite suffering very low prices, farmers are reluctant to sell in order to avoid great losses.

For the consumption market, farmers also suffer bitterness like city dwellers in the face of price hikes of steel, iron, cement and petroleum.  The only difference is that their incomes are much lower than urban people. This year, farmers encountered unforeseeable difficulties such as natural disasters, epidemics and soaring prices of fertiliser, pesticides and animal feed, thereby badly affecting the consumption power of the rural market.

In fact, producers only pay attention to patterns, prices and advertisements of their products for the export market such as garments and textiles, leather and footwear and seafood while giving little attention to the domestic market, particularly to the rural market.

What will farmers gain from Vietnam’s entry into the World Trade Organisation (WTO)?

In order to boost the development of the rural market, Vietnamese enterprises should map out solutions for developing the national economy and supporting services such as finance, banking and information and setting up distribution systems. They should join hands with producers in the renewal process to meet the requirements of the rural market, which boasts great potential for development. To bridge the gap between rich and poor, between rural and urban areas, it is essential to help farmers gain access to modern commercial systems and ensure the fairness of distribution. It is time to issue policies aimed at encouraging entrepreneurs to develop commercial services in rural areas with a view to boosting production and expanding outlets to improve people’s living standards.