Farm produce exports this year have performed well. However, gross profit has been on a downtrend since 2020.

Vietnam’s agriculture has continuously broken export records, with export revenue of over US$48.6 billion in 2021 and US$53.22 billion in 2022 and the trade surplus of US$6 billion and US$8.5 billion, respectively, bringing hope that farmers can make a fortune from growing rice and crops and aquaculture. Regrettably, it remains just a dream. The report on the situation and the prospect of Vietnamese agricultural businesses amidst global upheavals published by FiinGroup in late July 2023 provides information worth pondering. It shows that the profit margin of agriculture seems to move towards the break-even point. On the contrary to the export value and the trade surplus, the gross profit of agriculture fell from 13.2% in 2021 to 11.9% in 2022. In terms of individual industries, the gross profit of rice dropped from nearly 17% in 2021 to 13.5% in 2022. For coffee, the respective figures are 8.1% and 6.6%. According to FiinGroup experts, this downtrend indicates a decline in the profitability of agriculture due to escalating production costs, with the main reason being the rising price of raw materials and input materials such as fertilizers, seeds, and machinery. In fact, the limitations of agriculture were acknowledged at a meeting of the National Assembly in June 2022. Though Vietnam is an agricultural country, it has yet to take the initiative in important input factors in agricultural production. According to a Government report, Vietnam must import 60% of the materials for animal feed production and 42% for fertilizer production. Regarding breeding plants, according to information from a seminar in August 2022, Vietnam is proactive, with 60% of corn seeds and 10% of vegetable and fruit seeds. The FiinGroup report also mentions an unpromising prospect, at least for the short term. FiinGroup experts observed that the profit decline prospect, together with the risks of trade tension and climate change, has eroded the attractiveness of agriculture to businesses in the first half of 2023 compared with the same period in the past four years, evidenced by a fall in the number of newly registered companies and the growing gap between the number of businesses stopping operations and the number of enterprises resuming operations. The thinking of the agricultural economy has appeared, so enhancing the initiative ability in all phases of the production process has been and will be persistently pursued. Naturally, the result cannot come out overnight. In step with the foreign direct investment (FDI) enterprises to make the agriculture sector taking off would be a preferred option for many people. However, selecting partners for a specific trade and phase in the production process needs careful consideration. Besides the market advantage, the superiority in capital and technology of FDI enterprises may cause a disadvantage for the development of domestic businesses. Optimization of related stages such as logistics, post-harvest technology, and development of the high-end market to improve prices of agricultural products will increase the profit of all participating enterprises, including production enterprises. In reality, however, similar to the production stage, persistent efforts are still being made to seek solutions to address shortcomings in logistics, ensuring quality and finding outlets for agro products. Even for the “star” fruit durian, some shipments of durian imported from Vietnam have been found to be too young to ripen or poor quality in the Japanese and Chinese markets. In early September 2023, Vietnamese dragon fruit was taken out of some supermarkets in the UK due to pesticide residue. In 2022, the Agriculture and Cooperative Ministry of Thailand announced that those who harvest and sell unripe durians can be sentenced to imprisonment for up to three years and pay a fine of up to 60,000 baht. Obviously, if things are not done well for Vietnamese agro exports, it needs, for the least, to be done correctly.