Harnessing Technology 5.0 for Sustainable Agriculture

After nearly 40 years of innovation, Vietnam's agriculture sector has always been a cornerstone of its economy. In 2023, Vietnam was among the top 15 global agricultural exporters with a US$26.4 billion export value, up over 17% from the previous year. Despite this success, challenges in sustainability and productivity remain. Vietnam is addressing these by integrating high-tech and smart agriculture solutions for more sustainable practices.

Developing both production scale and level

At the Agriculture Forum 2024: Smart Agriculture Breakthroughs from Technology 5.0, recently organized in Hanoi by Vietnam Chamber of Commerce and Industry (VCCI)’s Business Forum Magazine in collaboration with other relevant agencies, Mr. Hoang Quang Phong, Vice President of VCCI, highlighted the continued growth of Vietnam's agricultural sector. He emphasized that the sector has not only expanded in both scale and sophistication but has also maintained a robust growth rate in recent years. This progress underscores agriculture's role as a cornerstone of the economy and its contribution to ensuring national food security.

In the first half of 2024, the agriculture, forestry, and fishery sector experienced an expansion of 3.38%, marking the highest growth rate for the first half of the year in the past five years. Specifically, agriculture grew by 3.15%, forestry by 5.34%, and fishery by 3.76%. Additionally, the sector's export value reached US$29.2 billion, reflecting a 19% increase year on year.

“Given these results, the agricultural sector is optimistic about achieving its full-year export target of US$57-58 billion. This target is US$2-3 billion higher than the goal set by the Government at the beginning of the year,” he said.

According to Mr. Nguyen Do Anh Tuan, Director of the Department of International Cooperation (Ministry of Agriculture and Rural Development), Vietnam's agriculture has maintained high annual growth of 3-4% in recent years. Especially since 2021, with many domestic efforts and global price hikes of many agricultural products, agricultural growth was 3.4 - 3.8%. Currently, Vietnam is among the Top 5 exporters of pangasius, rice, coffee, cashew nuts, black pepper, tea, cassava and wood products.

However, growth must be higher year by year while Vietnamese agriculture  is facing a lot of challenges, he said, citing that productivity has reached the threshold, particularly in key agricultural products like rice, coffee, pepper and pangasius which are all at the world’s highest productivity, while natural resources are declining. Cultivated land is hardly expanded or must be converted into urban land or gradually degraded. Besides, new regulations of countries on food safety, technical barriers on the environment are challenging, most typically new regulations on anti-deforestation in Europe.

In particular, major current difficulties of the agricultural sector are climate change, market fluctuations and changes in consumption trends. The main principle and approach of the agricultural sector is to create more value with fewer inputs, fewer natural resources and less labor.

“To do that, we can only take advantage of scientific and technological achievements, including high-tech agriculture, to create a more valued, greener, and cleaner economy,” he emphasized.

Reforming and enhancing the development policy for high-tech agriculture
In the context of mixed opportunities and challenges from the industrial revolution, Vietnamese agriculture will find it increasingly difficult to remain competitive by relying on low-cost, labor-intensive, and resource-based approaches, said Phong. It is necessary to change the mindset in agricultural development, that is, to shift from agricultural production to agricultural economy.

Technology 5.0-driven agriculture envisions a future where agriculture is highly efficient and productive through the synergy of human collaboration with advanced science and technology. Leveraging technology 5.0, producers and farmers will benefit from enhanced access to cutting-edge tools and comprehensive skills training, enabling them to adapt to new technological advancements. This approach aims to facilitate the creation of multi-value agricultural products, supporting the goals of sustainable agriculture.

According to Mr. Dang Kim Son, Permanent Vice Chairman of the Association of Advanced Technology Enterprise in Agriculture (ATEA), the government needs to have necessary support policies for high-tech agricultural development. It should form high-tech agricultural parks and high-tech agricultural regions with specialized areas of key agricultural products.

Here, the government and businesses will collaborate to invest in comprehensive infrastructure and support services. They will form value chains linked into ecosystems operated by leading processing firms to increase the value of agricultural products and bring products to the market. Surrounding this core are local small and medium businesses that supply input materials and services for production and business. Farm cooperatives and farmer households are linked to build consistent technological processes and origin of goods, supply quality-guaranteed raw materials on schedule to processors and traders.

In addition, it is necessary to apply special preferential policies to attract and support large firms to invest in high-tech agriculture. Vietnam's ability to sustain its role as a driving force for the country’s economy, society, and environment hinges on the successful adaptation and advancement of its leading science and technology firms. And this process has gone beyond the stage where it can only rely on the individual efforts of the units but there must be concerted coordination among businesses, between businesses with scientific and technological organizations, between businesses with farmers based on an effective policy and law system of the government.

Therefore, it is necessary to promptly reform the mechanisms and refine the organizational systems of research institutes and universities. This includes integrating research and training, fostering an environment that motivates scientists to focus on innovation, and ensuring that attention is given to the practical outcomes of scientific products, Son said.

Simultaneously, it is essential to expedite the reform of mechanisms and enhance the organization of the agricultural extension system and technology consulting services. Establishing a strong customer service relationship with technical transfer personnel and aligning producer service effectiveness with their interests is crucial. Additionally, it is imperative to reform technician training methodologies and assemble teams of highly skilled professionals to deliver superior service to all agricultural stakeholders. These efforts will drive reforms in procedures, management mechanisms, and support policies for high-tech agriculture parks and regions. The goal is to foster the development of industry clusters, high-tech agriculture hubs, and innovative startup incubators.

Reportedly, the Ministry of Agriculture and Rural Development coordinated to establish the Food Innovation Network in Vietnam to coin an innovation ecosystem by mobilizing domestic and international experts and scientists to link businesses and government agencies to address problems arising from value chains and improve the quality of food and food products.

In the coming time, the Ministry of Agriculture and Rural Development and relevant agencies will advise on policy reforms regarding land and infrastructure to generate momentum in land concentration and sufficient land fund for businesses to invest in high-tech agriculture and supporting industries; credit policy; clear and transparent tax policy; science and technology research policy; and human resource training, said Mr. Nguyen Do Anh Tuan.
 

Innovation "locomotives" are needed
Mr. Pham Hong Quat, Director of National Agency for Technology Entrepreneurship and Commercialization Development

The innovation initiative network is highly appreciated, especially in agriculture, because this is a very useful initiative for Vietnam in the world economic forum. The Ministry of Science and Technology is also making efforts to launch initiatives for domestic and international connection, linkage and cooperation.

Resources from research institutes and universities need to be combined and materialized by the business sector to meet market needs and cope with international challenges and requirements. The government is the place to launch enabling initiatives, not do it for them, and the private sector plays a very important role in providing resources and measuring the effectiveness of policies and support programs of the Government.

This open approach to innovation requires the extensive participation of corporations, especially industry leaders, because they place purchase orders and solve global and regional issues.

Currently, in addition to global challenges such as land degradation and climate change, Vietnamese agriculture faces significant issues that demand urgent attention. Adopting a sharing economy and fostering collaborative partnerships in agriculture are crucial steps to address these challenges and improve outcomes for farmers. It is essential to introduce leading initiatives and strategic players to drive competition and innovation, ultimately enhancing the sector’s resilience and productivity.

Close collaboration between agribusinesses and scientific agencies is essential
Mr. Ha Van Thang, Chairman of Vietnam Council of Agricultural Companies (VCAC)

To truly make science, technology and innovation the foundation of smart and sustainable agriculture, the approach needs to focus on scientific organizations and agricultural businesses in investing activities.

To achieve smart agriculture, it is essential to develop smart human resources. In Vietnam, however, many farmers and agricultural professionals continue to rely on traditional farming methods. The adoption of new scientific and technological advancements in agricultural production is still limited, and there are few robust and sustainable linkage models in place. To overcome these challenges, it is important to focus on enhancing the skills and knowledge of agricultural workers and fostering closer integration between technology and farming practices.

Therefore, the close linkage between agribusinesses and scientific organizations is essential for creating a cohesive and robust foundation for agricultural development, leveraging resources effectively, fostering innovation, and building a framework for green, circular, and sustainable agricultural practices.
At present, 63 provinces and cities across the country have state-owned scientific centers, organizations and enterprises. Many centers have received big budgets, modern equipment and cutting-edge technologies but most of them have not been able to promote their available resources due to the inadequate legal basis to initiate cooperation and association with domestic and foreign organizations and individuals, thus causing a huge waste of resources.

In addition, we lack a strong legal framework for public-private partnership and innovation. The use of public assets for development cooperation remains unsmooth. Legal regulations for new economic models, green economy, circular economy, including innovations, are not enough.

Therefore, the government needs to promptly complete legal regulations in a positive and open direction to have appropriate policies for agricultural investment cooperation for both public and private sectors. At the same time, it needs to promptly issue strong regulations to shape a legal framework for new economic models, green economy and circular economy.

Development cooperation and innovation models need to be allowed to be tested and piloted in an open mechanism rather than be governed by old regulations on the principle that we can do what is not prohibited by law.

Planning must align with production output
Mr. Pham Dinh Nam, Director of Vietnam Institute of Agricultural Technology Application and Development

First of all, to effectively assess whether high-tech agriculture is adequately supported, it is essential to clearly define its concept and evaluate the corresponding policies and mechanisms in place.

Second, high-tech agriculture will be linked to planning. Planning requirements need to be broad enough to align with production output and minimize fragmentation and small-scale operations. High-tech agriculture needs to develop in highland and mountainous areas by applying technologies to create valuable products for society and meet quality standards for export. Planning is very important. Agricultural subjects are smallholding farmers, cooperatives and enterprises with difficult access to planning. When planning is not resolved well, it will involve many other issues such as logistics and transportation, which are both costly and ineffective.

The third is collateral-related policy. When investing in high-tech agriculture, businesses must spend a lot of money on infrastructure systems such as greenhouses and net houses or products grown on agricultural land need to be considered as collateral assets for credit loans.

Fourth, it is necessary to determine whether high-tech agriculture contributes to greenhouse gas (GHG) emissions and to establish accurate measurements and counts for the creation of carbon credits. This area remains underexplored and has not yet been thoroughly investigated. There needs to be basic and accurate research on high-tech agriculture from institutes, universities and relevant agencies. Therefore, it is very important to have businesses ready to invest in manufacturing selected industry-specific products. To support specific industries, it is necessary to have the synchronous development of e-commerce and warehouse-free commerce to reduce production costs and logistics costs.

Unlocking capital for high-tech agriculture
Mr. Le Van Tuan, Deputy Director of Credit Policy Department, Vietnam Bank for Agriculture and Rural Development (Agribank)

There are still many difficulties and obstacles in lending credit for high technology. Specifically, high-tech agricultural development policies are still inadequate: It is hard to use agricultural ownership certificates to mortgage for bank loans; generic and unspecific criteria for determining high-tech agriculture and clean agriculture programs and projects. There are no regulations on which agency confirms project criteria and commercial banks subsequently lack the ground for determining program-based lending.

In addition, there is a lack of investment capital for high-tech agriculture. This is an important factor because there must be large investment capital for infrastructure construction, environmental treatment, crop and livestock varieties, machinery, technology, labor training, product introduction and consumption.

Land accumulation and rural infrastructure remain inadequate. It is necessary to have a large area of well-positioned land for high-tech agricultural production. However, at present, agricultural development lacks planning while land accumulation and concentration is slow.

Agricultural land policy has not encouraged farmers to protect land and invest in land for the long term. In addition, agricultural land is still very fragmented. Given this reality, if authorities at all levels do not have solutions to promote land accumulation to form large-scale fields, it will be difficult to encourage farmers to expand production, build farms, and apply high-tech to agricultural production.

Advancing high-tech human resource training
Dr. Trinh Van Thien, Chairman of Hai Duong Farmers' Union

Developing smart agriculture, high-tech agriculture and 5.0 agriculture is one of the popular trends adopted by many companies, farmers, and cooperatives. This approach has demonstrated its effectiveness and contributed significantly to revitalizing the agricultural sector.

Therefore, it is recommended that agricultural businesses form joint ventures and partnerships with farmers' organizations to support training in high-tech human resources. The agricultural labor force accounts for a very high share but its productivity is low. Currently, we are facing major challenges from the shortage of professionally skilled, qualified workers to meet the demand for human resources for smart agriculture. This is considered the core in developing smart agriculture.

Moreover, it is necessary to support investment in agricultural production infrastructure, especially information infrastructure systems for e-commerce and agricultural processing infrastructure. Rural areas are characterized by small-scale production, poor information technology infrastructure, and uneven resource levels. This is an area where information technology infrastructure is currently underdeveloped and needs significant enhancement. It is important to shift its focus from entertainment to supporting agricultural production.

The main smart agricultural products need to have commercial production commodity, have current and potential markets, and have sufficient conditions for development such as land, climate and weather. Although high-tech applications and advanced technological solutions, driven by digitalization and connectivity, are being integrated to develop innovative agricultural models, the field of smart agriculture remains relatively nascent. At present, agriculture produces a large volume of output but with relatively low value, and the efficiency of land and resource utilization is inadequate.

Quynh Anh (Vietnam Business Forum)