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Vietnam agriculture welcomes investment waves from Japan

Recently, Fujitsu Vietnam Ltd. and Aeon Agri Create Co., Ltd. have been collaborated with JICA Viet Nam Office to launch an ICT-based project to support Vietnam in forming agricultural value chains. This project, commenced since October 2015, aims to apply smartphone applications to consolidate agricultural data, including farm-work records, growing conditions, weather data, soil data and market-price data in certain field trials to evaluate the effectiveness of Japanese agricultural techniques having been transplanted to Vietnam so far.

Overview of this project.

Specifically, Fujitsu set up a test plot of around 1,000 square meters in Ha Nam Province that consists of a full ICT infrastructure including a smartphone application to monitor crop status as well as environmental conditions and the maintaining of work logs. Furthermore, on January this year, the company has conducted another field trial in Hanoi in which researchers from the Vietnam Women's Union gather market price data on certain agricultural products using a smartphone application.

 

Farming app -- input screen and history log.

Subsequently, collected data will be aggregated and put into visual format at a Fujitsu datacenter before being presented. Aeon Agri Create offers assistance and advice at the test plot, as well as runs workshops and presentations in Ha Nam Province on topics such as fertilization techniques and GLOBALG.A.P. Aeon Agri Create Japan also analyzes data from the test plot and offers ongoing advice along with online assistance. This farming subsidiary of Aeon Group has built 19 farms equipped with advanced IT in Japan, 15 of which are qualified for GLOBALG.A.P standards.

 

Basically, G.A.P refers to Good Agricultural Practices, the generic term for agricultural practices considered to be environmentally, economically and socially sustainable. Accordingly, GLOBALG.A.P. is a set of global standards employed widely in Europe and the United States.

Farming app -- crop photos and work hours graph.

This project is supposed to support the Japanese partners in assessing the technologies and methods that are effective for Vietnam's agricultural sector, and, with the JICA Viet Nam Office, will contribute to creating a food value chain in Vietnam that achieves higher productivity and a stable supply of safe agricultural products. This is a sufficient and necessary solution to urgently improve the severely low productivity and unstable supply heavily depending on climate changes.

Screenshots of market price app.

Concisely, Vietnam’s distinctive wet and dry seasons can enormously affect production yields. Vietnam is a long, thin country stretching north-south, with a climate that varies considerably between its regions. Though agriculture involves 47% of Vietnam's population, it contributed less than one-fifth of gross domestic product in 2014. Vietnamese farmers earn an average of about $70 a month, less than half of the roughly $155 income of the typical urban minimum-wage worker. The country's low agricultural productivity owes partly to the lack of systematic approaches.

The system is monitored by local workers.

Moreover, Vietnam's complicated distribution network generally involving multiple layers of wholesalers, makes it difficult for farmers to know what prices their fruits and vegetables sell for at the retail level. Gaining such insights into the market could help farmers plant more profitable crops. Hence, this project, if succeeded, would result in a great breakthrough in developing this country’s agricultural sector.

 

Some photos at the field trials in Ha Nam.

This ICT-based project is among a serials of collaborative agricultural activities between Vietnam and Japan, which has been intensively developing over recent years. Mr. Kawada, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi emphasizes that 2015 witnessed 38 Japanese firms seeking opportunities or conducting investments in Vietnam’s agriculture sector. The Foreign Investment Agency indicates that Japan was the third-largest investor in Vietnam in 2015, with investment of $1.84 billion, and the majority was contributed to agriculture.

Aeon supermarket in Ho Chi Minh City.

Another form of cooperation emerging over recent years is for Japanese experts to instruct Vietnamese farmers or for Vietnam to send trainees to study Japanese practices. Japanese enterprises also came to Vietnam to directly produce and sell products to Vietnam market or export to Japan. One typical example of this collaboration is the replication of the Japanese ‘Miracle Village’ Kawakami Mura in Da Lat, Vietnam.

Mr. Hironoshi Tsuchiya and Mr. Takaya Hanaoka

In 2012, Mr. Hironoshi Tsuchiya, Director of the HT Capital Investment Fund in Vietnam, realized the potential of Da Lat as a fertile land, with suitable climate for year-round cultivation of vegetables but local farmers, despite their hard work, did not earn a high enough income. He then paid a visit to the village of Kawakami Mura to call for local farmers to go to Da Lat to grow vegetables.

 

Mr. Masahito on the field.

Two farmers Masahito and Takaya Hanaoka decided to explore Da Lat and partnered with a local business to form the An Phu Lacue Joint Venture to plant lettuce here. They strictly apply the same farming techniques used in the village of Kawakami Mura. Also, fertilizers and pesticides are not the same brands but the components must be similar.

Farmers harvest lettuce before sunrise.

Currently, the company has 13 hectares of land and 15 workers. After the first harvest, the company is regularly planting 20,000 vegetable of all kinds each week. The company will export its products to Singapore and Japan. Mr. Hanaoka also states that his company is quite happy to transfer its techniques and farming processes to Vietnamese farmers. In the future the company will hold a program to send Da Lat farmers to Japan to learn cultivation techniques from the village of Kawakami Mura.

Japanese farming techniques are strictly applied.

Despite those early successes, this Japan – Vietnam agricultural cooperation has not always gone smoothly. Issues relating to land, financial support, and administrative procedures remain the greatest barriers for agriculture investors in Vietnam to overcome. Accordingly, JICA has been proposing a comprehensive support framework that addresses current bottlenecks in agricultural promotion, such as non-preferential loan terms, strict collateral requirements, poor business planning, and/or huge upfront investment burdens.

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References:

http://www.fujitsu.com/global/about/resources/news/press-releases/2016/0119-03.html

http://journal.jp.fujitsu.com/en/2016/02/04/01/

http://asia.nikkei.com/Business/AC/Fujitsu-others-to-test-IT-monitoring-of-fields-prices

http://en.vietnamplus.vn/japanese-firms-seek-to-adopt-it-in-agriculture-in-ha-nam/83955.vnp

https://www.vietnambreakingnews.com/2016/01/japan-supports-vietnam-to-form-agricultural-value-chains/

http://www.freshplaza.com/article/154171/Japan-invests-in-Vietnamese-agriculture

http://vneconomictimes.com/article/business/agri-investment-still-beset-by-difficulties

http://gia-nodai.com/321/?lang=en

http://tuoitrenews.vn/business/17528/japans-miraculous-village-in-da-lat

http://english.vietnamnet.vn/fms/business/100420/-miracle-village--of-japan-in-da-lat.html