The Minister of Agricultural and Rural Development, Cao Duc Phat, says 2007 will be the year of international economic integration for the Vietnamese agricultural sector. Mr Phat said WTO membership will open up new opportunities for the Vietnam agricultural sector to expand its export markets and increase export volumes. However, the sector will also have to overcome many challenges after commitments on opening up markets are applied.

To successfully integrate into the world economy, the agricultural and rural development sector has built action plans, including research on the structure of agricultural products, evaluating the competitive edge of each agricultural product, and mapping out strategies and measures for each period of development.

Since early 2007, the sector has carried out a number of solutions relating to joining the WTO. Notably, the sector has cooperated with relevant ministries and sectors to adjust mechanism and policies, and enhance capacity to realize international commitments.

The sector has also amended policies on agricultural subsidy, removed subsidies which are no longer suitable with WTO regulations, and build new subsidy policies which are in line with WTO regulations such as those assisting in marketing, information, consultancy and transport fees for export.

The agricultural sector has received due investment to fund research on science and technology, training, agricultural extension, developing infrastructure for the agricultural sector, plant seed, animal breeding and natural mitigation. It has also applied development measures to catch up with the integration process.

In recent times, Vietnam has provided few subsidies for exports and it has maintained the right to enjoy some WTO regulations exclusively for the country which is developing this field.

In fact, the levels of tariff cuts for most agricultural products are not high while Vietnam is currently applying a tariff cut level lower than the permissible rate of 10 percent of output value. To play to its strengths and cope with new challenges, more attention should be given to agricultural and rural areas, particularly those facing a number of difficulties.

In regard to the agro-forestry product market in 2007- the first year of Vietnam’s entry to the WTO, minister Cao Duc Phat predicted that agricultural product exports will continue to see positive signs with export turnover projected to reach US$7.5 million, up 58 percent from a year earlier.

There might be fluctuation in price in the agricultural product market but staple items such as rice, coffee, rubber, pepper and wood products will still be able to achieve market penetration with Vietnam in the WTO. However, the important thing is how to raise the competitive capacity of products rapidly, especially those with low levels of competition, in order to generate steady jobs for farmers.