Despite steady growth over the last three years, the farm produce processing industry - particularly in the Mekong Delta, which is one of the leading regions for food production - is facing challenges as a result of outdated technology, the Industry Ministry recently reported.
The farm produce processing industry's value now accounts for 20 per cent of the industrial sector's total value and 31 per cent of the total export revenue of the Mekong region.
Blessed with rich potential rice and fruit harvests, the delta has developed farm produce processing in an effort to spur the region's economy.
Over the last three years, the number of farm produce processing workshops in the region has increased from 18,400 to 23,125. In 2003 the region brought in an export revenue of €490 million from processed farm produce.
The processing industry, however, still faces many difficulties including unbalanced growth. Much of the reason for this is that the processing of liquor, beer, beverages, rice and sugar has a high proportion of total production value.
Though fruit is one of the region's major resources, processed fruits such as canned pineapples, mango and longan have proportionally less value.
Another problem is that the big fruit areas in Tien Giang, Ben Tre, Tra Vinh, Vinh Long and Hau Giang have fewer processing plants than An Giang and Kien Giang, which have smaller orchards, the Ministry says. An Giang has three fruit processing plants while Kien Giang has a big pineapple processing plant.
Outdated processing technology remains a challenge for the industry. Poor drying and presevation methods after the harvests have caused the loss of 18-22 per cent of the crop output annually.
For example, the whole region has only a silo system capable of preserving 30,000 tonnes of rice, and most farmers still use traditional preservation methods such as drying rice in the yards or keeping it in ceramic vases. Another major problem is the absence of foreign and domestic investors in farm produce processing industry. Of the total 42 foreign and domestic investment projects in Long An's industrial parks, few projects engage in farm produce processing.
As a result, local farmers have constantly worried about the damages, and have resorted to dumping their crops during peak harvest due to the lack of modern processing for their staple products.
The Ministry says that the industry also needs to improve produce quality, packaging and food hygiene to help Vietnamese processed food produce compete with similar products on the world market.
To develop the processing industry over the next six years, the Ministry of Agriculture and Rural Development says it has devised a plan to make further investments in upgrading drying, preservation and processing technology.
The plan aims to develop high quality fruit growing areas, build more cold storages and bigger processing plants to accommodate 10,000-50,000 tonnes for major fruit areas, and smaller plants with domestically produced equipment, and increase the rate of processing fruits and vegetables from the current 10 to 20 per cent in 2010.