Ministry discusses way to increase value for pepper products

The Ministry of Agriculture and Rural Development recently held a conference on sustainable development for black pepper to meet requirements of free trade agreements in the Central Highlands province of Dak Nong.

Ministry discusses way to increase value for pepper products

The conference aimed to assess the current situation and forecast the market to find reasons, resolve difficulties in production, credit and market, seek opportunities and propose fundamental solutions to promote sustainable development of pepper industry of Vietnam.

According to the ministry, from 2001 to now, Vietnam has always ranked first in the world in production and export of pepper. In 2001, the area of pepper in Vietnam was more than 35,000 hectares. In 2018, the area of pepper was 150,000 hectares, an increase of 400 percent, accounting for above 40 percent in production and nearly 60 percent in pepper export market share of the world. Vietnamese pepper has been exported to 105 countries and territories. Pepper export turnover reached US$90 million in 2001 and hit $758.8 million in 2018, up more than 700 percent. However, after pepper export value of Vietnam hit a record high at more than $1.42 billion in 2016, in the past three years, global prices of pepper continuously declined  as supply increased by 8-10 percent whereas demand merely rose 2 percent.

Mr. Le Quoc Doanh, agricultural deputy minister, said that the prices of pepper plummeted due to excessive supply. Earlier, domestic price of pepper sometime were up to VND250,000 per kilogram but now the price fell to around VND45,000-VND46,000 per kilogram. With such price level, pepper farmers across the country have been facing several difficulties due to losses and unable to pay their bank loans. According to forecast, global pepper production in the near future will still be in rising trend, so the pepper price of Vietnam will possibly continue to decline. This year, global pepper production will reach 602,000 tons, up 8.27 percent, of which, Brazil rises 28 percent, Cambodia surges 17 percent and Vietnam is expected to reach 240,000 tons in pepper production, up 9 percent as newly-grown pepper areas from 2014 to 2016 have started to give fruits.

According to the Ministry of Agriculture and Rural Development, when the price of pepper was at high levels, the area of pepper increased too rapidly, even at places that are not suitable for pepper plants. Moreover, there has not been any effective cure for diseases on pepper plants. Supply of pepper seedlings remains limited, of which activities including researching, selecting new varieties, producing disease-resistant pepper varieties, selecting and recognizing original parent plants and original parent plantation have not been paid much attention by provinces. In addition, production under GAP and food safety standards has not been fully carried out. Organizing production, preliminary processing and intensive processing is still limited and has not completely developed potentials and advantages of pepper industry.

As for the development direction of pepper industry in the near future, there were many opinions at the conference that the industry should encourage farmers to produce sustainably as well as ensure consumption for farmers. Mr. Dinh Xuan Thu, representative of the Pepper Association of Dak Song District in Dak Nong Province, said that authorities currently encourage development of organic pepper but they need to reconsider about consumption. At the present, global market has only consumed around 5 percent of organic pepper, if all provinces focus on producing organic pepper, it will continue to lead to excessive supply and repeat the same failures as regular pepper.

In fact, in Dak Song District, there are many companies concentrating on develop organic pepper but up to now they have not had stable consumption. Mr. Hoang Phuoc Binh, vice chairman of the Pepper Association of Chu Se District in Gia Lai Province, also said that if pepper industry want to develop sustainably, first it is necessary to improve the quality of Vietnamese pepper to meet international standards. Authorities should train and equip farmers with knowledge to raise awareness, hereby they will be able to develop pepper industry sustainably. 

Agricultural deputy minister Le Quoc Doanh said that the country need to keep the area of pepper at around 100,000 hectares. As for pepper plantations that are not effective and suitable, farmers should switch to grow more suitable crops. During cultivation, farmers should use organic fertilizers to reduce diseases on pepper plants. At the same time, farmers should choose suitable cultivation method.

As for provinces, they should increase their roles in developing value chain and pay more attention to intensive processing of pepper products. The Department of Crop Production and the Department of Plant Protection should continue to popularize pepper production process to provinces and research cures for pests and diseases as well as tighten control on plant protection drug residues in pepper so as to meet the requirements of global market. Deputy minister Le Quoc Doanh also asked relevant ministries and departments to cooperate with the Ministry of Agriculture and Rural Development to research and build projects to increase the value of pepper products. In addition, banks should have policies to support pepper farmers.

By Dong Nguyen – Translated by Thuy Doan

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