Self-control of animal feed materials to reduce imports

Vietnam needs to focus on developing high-quality maize, genetically modified corn for outstanding productivity to gradually meet the requirements of animal feed ingredients. Photo: N.Thanh

The price of animal feed increased 17 times

According to the General Department of Customs, the import turnover of raw materials and animal feed in the first nine months of 2022 reached nearly USD 4.07 billion, up 8.6% over the same period in 2021. Previously, in 2021, Vietnam also spent nearly USD 5 billion to import raw materials and animal feed.

Notably, the high price of imported raw materials for animal feed combined with the disruption of transportation due to the Covid-19 pandemic and the Russia-Ukraine war have caused domestic prices to rise sharply for a long time.

The Department of Livestock Production (Ministry of Agriculture and Rural Development) said from the end of 2020 until now, the price of domestic animal feed has increased by 17 times and has not decreased once, causing many difficulties for farmers. All production costs increase, while the selling price of the product does not increase, there are times when it falls below the cost of production. As a result, many livestock farmers suffered losses and even had to stop raising.

Mr. Nguyen Ngoc Son, Head of Hanoi Animal Husbandry and Veterinary Sub-Department, said that Hanoi has about 37-39 million poultry, 1.5 million pigs, and 164,000 cows. In the past two years, the price of animal feed has increased continuously, making farmers unable to calculate input and output. In the immediate future, Mr. Son said that the fact that many farmers take advantage of and mix feed is an effective solution to reduce the cost of animal feed. However, mixing and utilization are only suitable for small- and medium-scale farming while high-tech farming is very difficult.

Mr. Tong Xuan Chinh, Deputy Director of the Department of Livestock Production said that in the livestock system, animal feed plays an important role, accounting for 65-70% of production costs.

According to preliminary statistics, the country currently has 269 factories producing mixed animal feed with modern production technology. However, the input material for the new production system is important. In 2021, the production of animal feed ingredients that need to be used is up to 33 million tons, of which 65% depends on imports. In the context of the current high price of animal feed, the development of corn and soybean material areas is essential to take the initiative in at least 50% of domestic raw materials, gradually reducing dependence on imports.

According to the leader of the Department of Livestock Production, it is necessary to convert a part of the inefficient production area to plant feed crops, including maize (grain corn and maize biomass). However, to do this, there must be a policy of land collection and accumulation; creating favorable conditions for enterprises to lease land, and link with farmers to develop raw material areas, to meet the needs of the livestock industry.

Supporting the development of domestic raw materials

According to Mr. Tong Xuan Chinh, in the future, Vietnam also needs to focus on developing high-quality maize, and genetically modified corn for outstanding productivity to gradually meet the requirements of animal feed materials.

Clarifying one of the difficult aspects in the development of maize production in Vietnam in recent years, Mr. Nguyen Huy Cuong, seed industry director, Syngenta Vietnam Company said that it is because of the small cultivated area. For example, in the Northwest, the average cultivated area is only 1-2 ha/household, and a few households have 5 ha. The small area makes concentrated production of goods very difficult.

Syngenta is coordinating with a number of units and enterprises with great demand for animal feed such as TH true milk, Vinamilk, Dalat Milk to develop the area of maize biomass. These enterprises have high requirements for the yield and quality of biomass corn. Besides, Syngenta also cooperates with a number of units to buy biomass corn, planning to become a concentrated production area; typically in Dong Nai, Nghe An, etc., there are many enterprises that buy large amounts of corn and are a key area for biomass maize.

“For a long time, Vietnam imported corn at a price lower than the cost of domestic production. In the future, Vietnam should apply technology to gradually improve corn yield, because if it improves productivity, Vietnam can compete," said Mr. Cuong.

Currently, the Ministry of Agriculture and Rural Development is collecting comments for the Draft Decree regulating investment policies to improve livestock efficiency, including supporting content of production, processing, preservation and domestic consumption of raw materials for the production of animal feed.

Regarding this issue, Mr. Tong Xuan Chinh said that currently, the draft Decree is being consulted by organizations and individuals to finalize; it is expected to submit to the Government for consideration and approval by the end of this year.

The draft Decree mentions a number of very important points in terms of supporting and developing domestic animal feed ingredients. For example, for cooperative groups and cooperatives when participating in the production of raw material areas for animal feed production, they are supported up to 50% of the total cost for the infrastructure of the raw material areas, not exceeding VND 2 billion for a project. The infrastructure for the raw material area is the construction of intra-regional roads to transport input materials as well as irrigation systems, electricity, and material gathering areas.

In addition, if groups of cooperatives participate in the area of raw materials for animal feed production, they will be supported to buy new varieties, especially high-yield and high-quality varieties about 50%, up to VND 100 million. When investing in raw materials, the most difficult thing is how to have a large area for synchronous mechanization. The policy will support 50% of the cost to collect agricultural land. In the process of converting inefficient agricultural land to growing raw materials for animal feed, the support for each project is no more than VND 1 billion.

“Another very important policy for the production of industrial animal feed is to support businesses producing animal feed. Accordingly, enterprises with projects on research and production of animal feed ingredients will receive 50% support, up to a maximum of VND 2 billion for a project," Chinh said.