Decision No. 1291/QD-TTg approving the Plan of Action to develop the agricultural and fishery product processing industry in implementation of Vietnam's industrialization strategy within the framework of Vietnam-Japan cooperation through 2020, with a vision toward 2030

46 THE PRIME MINISTER No. 1291/QD-TTg OFFICIAL GAZETTE Issue nos 09-12/August 2014 THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness Hanoi, August I , 2014 DECISION Approving the Plan of Action to develop the agricultural and fishery product processing industry in implementation of Vietnam's industrialization strategy within the framework of Vietnam-Japan cooperation through 2020, with a vision toward 2030(*) THE PRIME MINISTER Pursuant to the December 25, 2001 Law on Organization of the Government; Pursuant to the Prime Minister :S- Decision No. I 043/QD-TTg approving the Vietnam :S industrialization strategy within the.framework of Vietnam-Japan cooperation through 2020, with a vision toward 2030; At the proposal of the Minishy of Agriculture and Rural Development, DECIDES: Article 1. To promulgate together with this Decision the Plan of Action to develop the agricultural and fishe1y product processing industiy in implementation of Vietnam's industrialization strategy within the framework of Vietnam-Japan cooperation through 2020, with a vision toward 2030, under the Prime Minister's Decision No. 1043/QD-TTg of July 1, 2013. Article 2. This Decision takes effect on the date of its signing. Article 3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People's Committees shall implement this Decision. c•J Cong Boo Nos 765-766 (1418/2014) Prime Minister NGUYEN TAN DUNG © Vietnam Law and Legal F ornm Issue nos 09-12/August 2014 OFFICIAL GAZETTE 47 PLAN OF ACTION to develop the agricultural and fishery product processing industry in implementation of Vietnam's industrialization strategy within the framework of Vietnam-Japan cooperation through 2020, with a vision toward 2030 (Promulgated together with the Prime Minister :S- Decision No. 1291 IQD-TTg of August 1, 2014) I. SITUATION 1. Position and role of the agricultural and fishe1y product processing industry in Vietnam and its prospects in the next 10 years Vietnam 's agricultural and fishe1y product processing industiy has a considerable propo1i ion in processing/manufacturing industr·ies, conu-ibuting about 20% of GDP. In 2001, the agricultural, fishe1y and food product processing industry took the lead in the industi·ial sector, accounting for around 23% of the total indusu-ial production value. This position has never changed over the last 10 years, with the industiy conu-ibuting about 20% of the industr·ial production value in 2010. According to figures released by the General Statistics Office, in 2012, there were over 6,000 enterprises operating in the agricultural and fishe1y product processing industry, the highest number among manufacturing industi·ies. Main processed agricultural and fi.she1y products are rice, coffee, tea, cashew nut, vegetables and fruits, mbber and frozen fishe1y products. Most of them are preliminarily processed products, while the rate of deeply processed (refined) products remains low. Vietnam 's agricultural and fishe1y products are key export commodity items with their expo1i turnover reaching USD 18.1 billion in 2012 and having increased around 2.2 times over the last 5 years. 2. Supply and demand analysis According to Euromonitor International, the world market of packaged foods reached USD 860 billion in 2010 and will increase to USD 997 billion in 2015. With abundant agricultural and fishe1y resources, Vietnam 's agricultural and fishe1y product processing industiy would develop once comprehensive measures and policies are applied. The Vietnamese Government has set the orientation of restructuring processed products, focusing on production of products with high added value, assurance of food hygiene and safety and sustainable development. In addition to the above production and expo1i restiucturing, it is also necessaiy to commercialize products to meet the demand of overseas mai·kets on the basis of making the fullest use of the country's agricultural and fishe1y resources and boosting the export of products with high added value, covering also building brands and accelerating the growth rate of the industry. 3. Existing problems The prime solution to increase the added value of products is to improve food hygiene and safety. Unfo1iunately, at present Vietnam still faces suspension of expo1i due to detection ©Vietnam Law and Legal Fomm 48 OFFICIAL GAZETTE Issue nos 09-12/August 2014 of excessive amounts of plant protection drng and antibiotic residues in agricultural and :fishe1y products. Besides, info1mation on international standards such as the Good Manufacturing Practices (GMP) or the Hazard Analysis and Critical Control Point (HACCP) has not yet been widely disseminated in the countiy. Considering the export of food from Vietnam to Japan, according to the 2011 Impo1ted Foods Monitoring Statistics of the Japanese Ministiy of Health, Labor and Welfare, Vietnam ranked third among counti-ies with the highest number of commodity items violating the Japanese Food Sanitation Act (166 cases, accounting for 13.2% of the total number of violations), following China (278 cases, accounting for 22.1 %) and the US (174 cases, 13.8%). The improvement of confidence in Vietnam's processed foods through sti·ict application of VietGAP standards, ti·ack-and-u-ace regulations and the value chain will provide a premise for raising the added value of agricultural and fishe1y products and processed foods. The second solution is to ensure raw material sources with stable quality and quantity. It is a crncial condition for agricultural and fishe1y product and food processing ente1prises to have raw material sources with stable quality and quantity. The third solution aims at increasing the degree of processing, from the initial steps of processing raw materials and managing the processing process to packaging products. Once the degree of processing is increased, the added value of Vietnamese processed food would be raised. Modernizing the goods circulation network is the fomth solution. Vietnam is now lacking special-use vehicles for the road and seaborne ti·anspo1tation of frozen and refrigerated goods, thus failing to ensure the quality of goods during u-anspo1tation. The fifth solution is to intensify marketing activities. For example, it is necessaiy to alter package designs, shapes and materials, using either plastic bags, paper bags, cans or bottles, etc., depending on the taste of target mai·kets. Regai·ding the Japanese market, if Vietnamese processed goods which are widely liked in Japan have their packages suitable to Japanese consumers' taste, their expo1t tmnover and added value will surely be increased. Therefore, it is necessa1y to work out solutions to increase the added value in each step of the supply chain. In order to participate in the global supply chain, solutions should be adopted and implemented in order to create a number of typical products and develop and raise the quality of agricultm·al, fishe1y and food products. II. ORIENTATIONS TOWARD 2020 To tmn Vietnam into a reliable supplier of safe and high-quality agricultm·al, fishe1y and food products. III. OBJECTIVES BY 2020 1. To develop the world market's tiust in Vietnam as a producer of safe and high-quality agricultm·al, fishe1y and food products for expo1t and domestic consumption. 2 . To create 3-5 processed agricultm·al, fishe1y and food commodity items which can help build Vietnamese brands and image. IV. STRATEGIC ISSUES 1. Ensuring raw material sources with stable quality and quantity. © Vietnam Law and Legal F ornm Issue nos 09-12/August 2014 OFFICIAL GAZETTE 49 2. Increasing the degree of processing. 3. Modernizing the goods circulation network. 4. Improving marketing and brand-building activities V. PLAN OF ACTION Starting Organization of implementation No. Plan of Action time Implementing Coordinating agency agency 1 Selecting typical commodity items Selecting potential commodity July 2014 Ministry of Ministry of items and production areas: Agiiculture Industry and Trade, mbber; coffee; tea; shrimp; and Rural Ministry of Science vegetables and fmits Development and Technology and People's Committees of provinces and centrally nm cities 2 Creating typical products 2.1 Ensming raw material sources September Ministry of Ministry of with stable quality and quantity 2014 Agiiculture Planning and To organize farmer household and Rural Investment, group-based production of Development Ministry of raw mate1ials, encourage the Industry and Trade establishment of aglicultural and People's cooperatives (lateral affiliation); Committees of to instin1tionalize the affiliation provinces and between processing ente1p1i ses centr·ally nm cities and farmers through the signing of product purchase contr·acts (vertical affiliation). To 1mderline the role of ente1p1ises in linking production to the market. To settle matters related to plant protection dmg/antibiotic residues in raw materials. To organize the ce1tification of agiiculmral products produced up to such standar·ds as VietGap, GlobalGap, Rainforest, 4C, etc. ©Vietnam Law and Legal Fo1um 50 OFFICIAL GAZETTE Issue nos 09-12/August 2014 2.2 Increasing the degree of September Ministry of Ministry of processing 2014 Agricultme Planning and To accelerate the setting up and Rural Investment, of processing joint ventures Development MinistJ.y of Science between Japanese enterprises and Technology and VietJ.iamese enterprises. and People's To build capacity for a number Committees of of R&D establishments, provinces and especially the Vietnam Institute centJ.·ally rnn cities of Aglicultural Engineering and Post-Harvest Technology; to build a fisheries research center in the Mekong River delta. To apply a closed production cycle with advanced management systems meeting standards required by Japanese and international markets; to accelerate the transfer of Japanese technologies for agricultural and fishe1y product processing, packaging and preservation. 2.3 Modernizing the goods September Ministry of MinistJ.y of circulation network 2014 IndustJ.y and Agiiculture and To raise the effectiveness of Trade Rural Development small-sized circulation and and People's distJ.ibution enterprises. Committees of To boost the fo1mation of a provinces and circulation and distJ.·ibution centJ.·ally rnn cities infrastrncture system ( agi·iculniral product auction floor, product preliminaiy processing systems at wholesale markets, and channels for distJ.ibuting products to consumers, etc.) © Vietnam Law and Legal F ornm Issue nos 09-12/August 2014 OFFICIAL GAZETTE 51 2.4 Improving marketing and brand- September Minisny of Ministlyof building activities 2014 Agiicultme Planning and To suppott marketing and and Rural Investment, brand-building activities. Development Minisnyof To suppo11 and upgrade Industry and Trade Vietnam Agi·iculniral Exhibition and People's Trade Fair Center (to pe1fo1m Committees of the function of adve1tising provinces and products in association with centrally nm cities cuisines and consumption practices in Vietnam and the world and, at the same time, act as an e-market providing updated inf 01mation on prices and markets at home and abroad). 3 Fo1mulating and implementing Januaiy Minisny of Ministty of the pilot project on hi-tech 2015 Agiiculrure Planning and agiiculrural product processing and Rural Investment zones (in order to create a Development and People's linkage between production Committees of ai·eas with processing and provinces and consumption for selected typical centt·ally nm cities agiiculrural products) 4 Improving the quality of processed agiiculrural, fishe1y and food products 4.1 Food quality and safety June 2014 Ministty of Ministty of Health standards Agiiculrure To review, modify and and Rural supplement Vietnam's food Development quality, safety and hygiene standards in harmony with international standai·ds ©Vietnam Law and Legal Fo1um 52 4.2 4.3 5 OFFICIAL GAZETTE Issue nos 09-12/August 2014 To modernize two food quality, June 2014 Ministry of Ministry of Science safety and hygiene inspection Agliculture and Technology, centers (in the North and the and Rural Ministry of Health, South) for pe1fonning the food Development and Ministiy of quality control. Education and To fo1m a quality control Training system (network) licensed by the Government. To train human resources and improve the capacity to contr·ol food safety and hygiene based on production chains Exainination/inspection June 2014 Ministry of Ministry of Health mechanisms Agriculture To boost the conclusion and Rural of agreements on mutual Development recognition of agiicultural and fishe1y product quality inspection results between Vietnam and impo1ting countries. Suppo1t mechanisms and policies To review and supplement June 2014 Ministry of Ministry of existing policies on investrnent, Agriculture Finance, Ministry land, science and technology, and Rural of Science and finance, credit, scientific Development Technology research, technology tr·ansfer, and Ministiy of etc., in order to boost Vietnam- Education and Japan cooperation. Training VI. ORGANIZATION OF IMPLEMENTATION AND SUPERVISION MECHANISM 1. Assignment of tasks a/ The Ministry of Agriculture and Rural Development shall: Set up an executive board with the participation of related paiiies so as to organize the implementation of the Plan of Action in a comprehensive and effective manner; Urge and exainine agencies, units and localities to implement the Plan of Action; annually summarize and repo1i the Plan of Action implementation results to the Steering Cominittee for the Industiialization Sti·ategy; periodically conduct preliinina1y and final review of the implementation and effectiveness of the Plan of Action and repo1i such to the Prime Minister. © Vietnain Law and Legal F ornm Issue nos 09-12/August 2014 OFFICIAL GAZETTE 53 b/ Related ministries and sectors shall: Realize contents and perfo1m tasks set in the Plan of Action in conf01mity with their functions and tasks as stated in Pait V of the plan; Coordinate with the Ministiy of Agriculture and Rural Development in evaluating the results and effectiveness of implementation of their assigned tasks for summarization and reporting to the Prime Minister. c/ People's Committees of provinces and centi·ally nm cities shall: Direct related local agencies and units to elaborate and implement the tasks set in the Plan of Action in confo1mity with their local characteristics, potential and advantages; fo1mulate , approve and implement specific tasks, schemes and projects to realize the Plan of Action so as to ensure promptness and effectiveness; Coordinate with ministries and central sectors in implementing schemes and tasks on the basis of the contents and tasks stated in the Plan of Action so as to ensure investment efficiency and avoid overlapping; To mobilize resources and coordinate the perfo1mance of the tasks set in the Plan of Action with the implementation of projects under other socio-econoinic development programs so as to ensure effectiveness and thrift. di Agricultural and fishe1y product processing enterprises shall, based on the contents of, and tasks set in, the Plan of Action, take the initiative in fo1mulating and implementing specific investment schemes and projects. 2. Supervision of the implementation of the Plan of Action The Ministiy of Agriculture and Rural Development shall supervise the implementation of the Plan of Action and repo1t supervision results at meetings of the Working Group for the Industi·ialization Sti·ategy once a year. The Working Group shall repo1t supervision results to the Steering Committee for the Industrialization Strategy. 3. Adjustment of the Plan of Action In the course of implementation of the Plan of Action, if meeting with any difficulties and problems, agencies, organizations and ente1prises shall repo1t such to the Ministiy of Agriculture and Rural Development and the Working Group for the Industii.alization Sti·ategy for consideration and settlement. The Ministiy of Agriculture and Rural Development shall coordinate with the Working Group for the Industrialization Sti·ategy and related ministries and sectors in summarizing and evaluating the implementation results up to 2016 and experiences of the Japanese paitners and, on that basis, adjust the Plan of Action's contents which are to be implemented after 2017. 4. Funding sources Funds for implementation of the Plan of Action shall be mobilized from the following sources: the central budget, local budgets and international aid; and funds raised from communities and other lawful sources. Prime Minister NGUYEN TAN DUNG ©Vietnam Law and Legal Fomm