VIETNAM: FOOD PROCESSING

In the past 15 years Vietnam was grown from a net importer of food to a substantial exporter. It is the world's second most important exporter of rice, and the world's largest coffee exporter and producer of cashew nuts. Tea, peppers, nuts and spices have become important exports. Rice and coffee account for about half of agricultural export revenues. Soybeans, cashews, sugar cane, peanuts, bananas, poultry, fish and seafood are growing. Vietnam's agricultural exports are vulnerable to international price fluctuations because these exports are largely commodity based.
Vietnam's agricultural fishing and forestry industries together produce over US$3 billion of goods annually. Roughly 55% of Vietnam's workforce is employed in agriculture. Commensurate with economic development, the sector had gone from a 25% share of GDP to less than 20% in 2008. Farm products accounted for 22% of the country's income in 2008, down sharply from 50% in 2005. Finally 17% of all of its exports are related to the agricultural, fisheries or food processing industries, down from 55% in 2006. Despite the trend, agriculture will continue to be very important as it raises the productivity of the 70% of Vietnam's population that lives in rural areas.
Traditionally, Vietnam has protected agricultural market with regulations and high tariffs. Vietnam's WTO accession reduced tariffs and led to sharp increases in imports ($7.3 billion in agricultural goods by 2008). Key agricultural imports include dairy, tobacco and grain (wheat) to meet consumer demand, while other major agricultural imports, such as fertilizer, animal feed and pesticides support Vietnam's large agricultural sector.
The key staples of the Vietnamese diet (fish and rice) are produced in abundance domestically and have naturally limited agricultural imports in the past. However, the makeup of