August 12, 2015
TPP, AEC a bane to Vietnam''s livestock industry: report
Vietnam''s livestock industry will be a big loser when the Trans-Pacific Partnership (TPP) comes into effect and the ASEAN Economic Community (AEC) is formed, according to a report by the Vietnam Institute for Economic and Policy Research of Vietnam National University.
Relatively advantageous industries are expected to benefit at the expense of disadvantageous industries like livestock and poultry, according to the "Analyzing the Impacts of TPP and AEC on Vietnam''s Macro-Economy and Livestock Sector" report.
The livestock and poultry sector is considered unsustainable, uncompetitive and vulnerable to free trade pacts, said the report.
The livestock industry has low competiveness, having mostly small-scale farming and production, heavy dependence on imported breeds and feeds, common disease problems, limited slaughtering hygiene and food safety, and environmental pollution, according to the report.
These issues affect all livestock sub-sectors such as swine, poultry, cattle, and milk.
The results are low productivity and production output, and the increasing reliance on imports from TPP countries, particularly the US, Australia, New Zealand, Canada and AEC countries such as Thailand.
The report also revealed that in both free trade blocs, Vietnam''s output will decline in almost all livestock industries, except for other animal products, mainly live swine and poultry.
The declining output will also lead to a drop in demand for both skilled and unskilled workers in the livestock sector.
Given the low productivity and competitiveness of the industry, poultry and swine meat producers will suffer the most in terms of output and welfare, according to the report.
However, current consumption habits of Vietnamese people, most of whom prefer fresh over frozen meat, may slow down the impacts, with milk and beef producers having a better chance of survival.
Overall, consumers and importers will have access to cheaper products, while producers and exporters will be severely affected as they will lose out to imports from other countries, such as bovine from Australia and poultry and swine meat from the US.
In the short term, as consumer habits cannot change quickly, the impacts of trade liberalisation on local producers will not be fully felt.
However, in the mid and long term, as frozen meat increases in popularity, domestic production will face stiffer competition.
Consequently, the sector needs to undertake quick restructuring efforts to improve efficiency against foreign competition, the report suggested.
According to a report by Tuoi Tre News last month (http://www.cnchemicals.com/), Vietnam''s poultry industry is already seeing the impact of foreign competition.