10.7 Overview of the goat industry development program and its impacts

According to the Goat and Rabbit Research Centre, MARD's Goat Industry Development Program is a long term project (funded for 15 years) with the goals of:

• introducing modern goat farming techniques to Vietnam with a focus on more intensive farming using higher yielding breeds (crossbred goats) and better standard feeding and animal health systems and extension services;
• increasing rural area incomes as part of improving the rural economy; and,
• developing improved markets for goat-based products in Vietnam, mainly meat, but also milk and goat skins.

The targets that were set for the program are as follows:

• a standing goat herd of about 4.2 million head of goats, both meat and milking animals, by 2015;
• annual slaughter of about 1.25 million meat goats in 2015;
• national goat meat production of between 40,000 and 45,000 tonnes of meat in 2015; and
• national milk production of between 2,000 and 2,500 tonnes of raw liquid milk in 2015.

This program has been well supported by foreign donors and aid agencies. There have been some high profile aid funded development projects in the goat farming sector, which have assisted the program to develop a number of viable benchmarks to guide future development of the sector.

According to MARD, one of these was an award winning project revolving around women goat farmers and the extension of their activities into goat cheese production and its sale to the Hanoi retail and food service sector markets. This project started operations in 1998 and was funded by a number of EU donor governments and agencies, and was run in conjunction with MARD's Goat and Rabbit Research Centre. This program resulted in the development of the Blue Mountains branded range of goat cheeses, which are marketed to, and used by, high end restaurants and hotels in Hanoi.

In addition to the above mentioned project, MARD and its foreign partners are also running projects to develop intensive and semi intense goat farming operations linked to nucleus breeding farms, better quality feeding systems, which use local materials, and animal health systems/extension services.

In the north of Vietnam, the Goat and Rabbit Research Centre reports that these intensification projects have shifted the structure of the goat farming industry from domination by informal extensive goat farms to more viable mix of intensive and semi intensive farms over the past 10 years. Today, the bulk of farms (around 60%) are now semi intensive operations, whereas in these areas in 2000, over 80% of the farms would have operated as extensive systems.

10.8 The government's strategic viewpoint about the goat farming industry and its future development

The Vietnam government generally has a realistic strategic view about the goat farming and its future development prospects. The high level of practical experience derived from the Goat Industry Development Program has provided it with a good understanding about the positive and negative aspects of the industry (see table below)

Strategic Viewpoints About Vietnam's Goat Farming Industry Today

Positives

Negatives

Goat farming has significant opportunities based on past development efforts since 1998, if it: is well organised from an operational standpoint; uses appropriate breeds (crossbreeds) that match market demands; is well supported by extension services, especially animal health and farmer advice; has good feeding resources; and, has a viable commercial market for smallholder farmers to target and service, which is near to their farms. MARD's Goat Industry Development Program, which is supported by the expertise in the Goat and Rabbit Research Centre. This Centre has low cost / smallholder appropriate systems and technologies in place to assist industry development into the long term. The government is fully supportive of increasing the size of the national goat (and sheep) herd. Outwardly, there are also foreign donors that are also interested in facilitating this policy. Past projects have also benefited farmers because goat manure is a good source of fertiliser for goat-crop integrated farms and also a potential for mini biogas projects that assist farmers with their energy needs. A prize winning goat cheese project in northern Vietnam has provided evidence that innovative farming projects close to urban areas can broaden the business scope of groups of farmers where there is a food service and retail market for such product can be successful for goat farmers.

The government has insufficient funds and expertise for all of its goat industry development plans. This undermines wide ranging extension services coverage. The animal health situation in Vietnam is very risky for goats and sheep because there are many diseases and infections (parasites are a major problem) that have a negative impact on these animals, especially when they are used in extensive farming systems. Goat products do not have good broad based demand in Vietnam, and are generally not part of the local food culture. Goat slaughtering is still an on-the-ground activity across Vietnam, which is problematic when trying to build more viable markets in the modernising urban areas. Although there have been improvements, the knowledge of many goat farmers outside the various industry development projects is very weak. The techniques and technologies are also reported to be region-specific and not fully transmittable to other areas of Vietnam, due to climate/environment differences. Smallholder goat and sheep farms generally have shortages in funding to increase the size of their operations. Many of Vietnam's goat farms are extensive system farms that are not very profitable for their operators. Local fodder is of poor quality for use with crossbred goats, so farmers with crossbred goats need good extension support, which is not always available to them. Sheep farming is one of the weakest farming sectors in operation in Vietnam today.

Source: Goat and Rabbit Research Centre, MARD

10.9 The challenges for sheep farming in Vietnam

According to the National Institute of Veterinary Research, goats are significantly more adaptable to the conditions in Vietnam than sheep, and this explains the much larger goat herd and more widespread goat farming activities

Sheep have proven highly problematic in most areas outside Ninh Thuan (Phan Rang) Province, where they have adapted to local conditions over a long period of time. According to sources at Hue University, even Ninh Thuan (Phan Rang) Province is problematic for sheep because a lack of available green feedstuffs in this dry region significantly undermines the potential to expand sheep production in this area of Vietnam in future.

In addition to this, all efforts taken over the past 20 years to expand sheep outside Ninh Thuan province, and some small pockets of viable land in other parts of the country, have failed due to losses arising from a wide range of bacterial, viral and parasitic diseases. Internal parasites are reported to be a major problem for sheep in Vietnam. The OIE lists Vietnam has having a large number of diseases that can affect sheep, with local studies confirming this situation and, even, adding other diseases to the OIE list.

The lack of disease resistance in sheep is a major strategic issue in developing a viable sheep farming industry, whether at the level of a smallholder structure or commercial farms. For this reason, sheep have become more of an academic focus (i.e. show cases) than a commercial focus for the authorities. Shifting away from this situation would require significant funds, which is something that is not available for niche industry development in Vietnam. Additionally, as time would be needed to breed disease resistant sheep, this is also a major constraint to future development.

Strategically, sheep products do not have high inherent demand in Vietnam, unlike pigs and cattle, so this is another factor that marginalises them within government livestock industry development strategy.

11. Meat exports from Vietnam

Vietnam exports of meat were valued at about C$ 52 million in 2009. Although exports are higher than in 2000, the trends in the value of exports have been highly erratic over the past 10 years, As can be seen from the chart below, exports of processed meats are minimal, even though they have long had high profile focus from state-owned enterprises involved in the industry.

Vietnam's Exports of Meat, Poultry and Processed Meats – 2000 to 2009

Source: Vietnam's External Trade Statistics

The main destination for Vietnam's exported meat in 2009 was Hong Kong SAR (see chart below).

Vietnam's Exports of Meat and Poultry by Destination in 2009 – C$ 52 Million

Source: Vietnam's External Trade Statistics

Vietnam's main exports of pork are suckling pigs. In 2009, it exported close 14,000 tonnes of these products valued at about C$ 33 million (see chart below).

Vietnam's Meat and Poultry Exports by Key Product Type in 2009 – C$ 52 Million

Source: Vietnam's External Trade Statistics

While government policy stresses the development of Vietnam as a major exporter of meat, there are two factors that undermine this strategic focus:

• the massive weaknesses that exist in the country's livestock and meat bio-security environment. This is a viewpoint of the regulatory authorities in Hong Kong and Singapore, and has been further stressed to them by recent livestock animal outbreaks in Vietnam; and,
• the very strong phytosanitary and sanitary environments that are necessarily in place to protect consumers in Vietnam's key actual and potential target export markets, e.g. Hong Kong SAR, Singapore, Taiwan, Malaysia, Japan and South Korea.

With Vietnam now a party to AFTA (and the now developing ASEAN Economic Community), the ASEAN-Australia-New Zealand Free Trade Areas, the ASEAN-China Free Trade Area, and also an associate member of an expanding TPP (Trans-Pacific Strategic Economic Partnership Agreement), very urgent attention will be needed over the next 5 to 10 years to strength Vietnam's bio-security environment so its livestock/meat industry is in a much better position to deal with both the opportunities and challenges that are now arising from these FTAs.

The evident opportunities and challenges foreseen by trade sources today for meat producers and processors in a much better quality bio-security environment in future are:

• amongst Vietnamese middle income and younger consumers, who are now starting to prefer supermarket shopping, have growing demand for clean and disease free agri-foods, and are already generating massive new demand for imported products because of their growing use of food service outlets;
• in the Vietnam government's increasing difficulties in dealing with meat imports. This will evolve further as the free trade areas that it is involved in become solidified in terms of 0% duties and non-tariff barriers (NTM) eliminated in the medium term; and,
• the very clear opportunity in exports, because demand is very big in neighbouring meat and poultry "supply deficient" markets, such as Singapore and Hong Kong SAR.

In view of this, the Vietnamese government needs to pay very urgent strategic attention to working with its major trade partners in key target markets, other donor governments, aid agencies and other agencies of relevant to implement its strategic plan for meat exports.

12. Imports of breeding genetics

12.1 Imports of breeding animals

Government officials report that there are large numbers of breeding animals being imported to Vietnam. In addition to this, there are press releases and newspaper articles that report quite high numbers of dairy cattle being imported from New Zealand and, prior to North America's BSE outbreak, goats from the USA.

This information is not, however, reflected in official trade statistics for imports recorded in Vietnam, or exports to Vietnam, except in the area of breeding pigs (see Table below).

Exports of Pure Bred Breeding Animals to Vietnam – 2000 to 2009

	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
Pigs:
Head	1,742	178	330	689	279	2,037	1,396	581	1,506	1,419
Value in US$ '000	493	39	203	478	162	958	800	349	898	1,208
Cattle:
Head	-	304	-	4,319	765	-	-	-	-	5,269
Value in US$ '000	-	442	-	3,253	592	-	-	-	-	1,556
Goats:
Head	-	-	120	-	500	175	128	-	-	-
Value in US$ '000	-	-	136	-	190	25	33	-	-	-
Sheep:
Head	-	-	-	-	30	-	-	-	-	-
Value in US$ '000	-	-	-	-	8	-	-	-	-	-
Total:
Head	1,742	482	450	5,008	1,574	2,212	1,524	581	1,506	6,688
Value in US$ '000	493	481	339	3,731	952	983	833	349	898	2,764

Note: There is no distinction in the trade data between the import of dairy cattle or beef breeding cattle
Source: External trade statistics

As highlighted in the table above, Vietnam's imports of live breeding animals has increased in an erratic manner over the past 10 years.

Discussions with a number of exporters in Australia indicate that Vietnamese importers may be placing orders for breeding animals that are not pure bred or the best quality, because of their budgetary constraints. This characteristic is thought to be most prevalent in the live goat market, but also has some impacts (in some years) in the live beef cattle market.

While this is the case, it is evident that some of Vietnam's imports of live breeding animals, especially cattle, are not being fully reported in its official statistics, although there is no information readily available on why this situation is happening.

According to government and trade sources, and the trade data that is available, the main sources of breeding animals are the following countries:

• Australia – Cattle and goats; and sheep, which are rarely imported by Vietnam;
• Canada – Pigs;
• New Zealand – Cattle;
• Thailand – Pigs and some cattle; and,
• USA – Cattle (only prior to its BSE infection) and goats.

Other countries have also been involved in supplying breeding livestock on a less frequent basis, including South Africa (pigs), France (pigs), Denmark (pigs), South Korea (pigs), UK (pigs), Belgium (pigs) and India (goats).

Based on the available trade data and other information available from government, trade and aid agency sources:

• Australia appears to be the market leader, because of its strong position in the breeding cattle and goat markets;
• the USA and Canada are the leaders in supplying breeding pigs. Interestingly, the USA is reported to be the major supplier of breeding goats, although this is not evidenced by any recent trade data, whether import or export data; and,
• the EU has a much weaker presence as a supplier, with Denmark being the main EU exporter of breeding pigs.

12.2 Imports of semen

Data on Vietnam's trade in semen is only available for bovine semen. Government, aid agency and trade sources comment that there has been active import of swine semen on an annual basis, although there is no segregated trade data readily available on such imports.

Imports of bovine semen have been variable over the period between 2000 and 2009 (see Chart below).

Exports of Bovine Semen to Vietnam – 2000 to 2009

	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
Kilograms	219	313	183	221	89	10	13	NA	NA	NA
Value in US$ '000	52	164	110	156	191	27	48	101	142	96

NA: Data not available.
Source: External trade statistics (Delivered weight)

A review of the trade data indicates that the main suppliers are based in Canada and the USA. Other supply countries with lower market shares, but some consistency in their trade with Vietnam, include Australia, New Zealand, Netherlands and France.

12.3 The regulatory environment for imported genetics

The regulation of imported genetics, whether live breeding animals, embryos or semen, is confusing from both the documentary and transparency standpoints. From the documentary standpoint, there are strict broad based regulations over such imports, with reference being made to:

• information available from the OIE, and the animal health authorities in exporting countries; and,
• local interpretation of bio-security issues that could have a negative impact on Vietnam's livestock herds, its production industry and the end markets.

A review of available documentation indicates that it is highly fragmentary at the level of exporting countries covered and animal / product types. The documentation also varies in terms of age, with some protocols dated in the 1980s, and others being more up-to-date documents, i.e. protocols finalised since 2000. Most of the protocols in place cover pig, beef cattle and dairy cattle genetics. There are also some for goat genetics, but none were detected for sheep genetics.

The primary concern is the prevention of new diseases and conditions, e.g. BSE and Scrapie, from entering Vietnam's already highly risky livestock production and product marketing scenarios. In addition to this, the government also wants to prevent animals with any form of existing disease in Vietnam (multi-species or species-specific) from entering the supply chain, and so causing additional disease outbreaks.

The National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD), an agency within the Ministry of Agriculture and Rural Development (MARD) and MARD's Department of Livestock oversees compliance with the regulations. The basic regulations include:

• imports have to come from a country that is approved as a supplier of breeding genetics to Vietnam. This is determined by the authorities following on from a review of export country regulations, practices, procedures and risks, and discussions with the exporting country's animal health authorities about its exporters' capabilities and their capacity to supply disease free breeding products;
• imports can only come from a country where there is an active import-export protocol in place for the specific livestock genetic products, e.g. live animals, embryos or semen. Canada and its main competitors, namely the USA, Australia, Denmark and New Zealand, have some product-specific protocols in place, although some of these appear to be old, and so may not be currently in force;
• the provision to the Vietnamese authorities at the port of import of an agreed health certification from the animal health authorities in the exporting country for all shipments of livestock genetics. This is in a form prescribed in the import-export protocol between Vietnam and the exporting country for the specific product;
• compliance with exporting country-specific and product-specific requirements on feeding, disease testing, vaccinations, transportation type and method, pre-export quarantine place and time in the exporting country, and other special conditions to be complied with before export to Vietnam, as set out in the agreed import-export protocol for the specific product;
• the right of the Vietnamese authorities to inspect all facilities that are involved in the production of livestock genetics in the exporting country as part of the import-export approval process; and,
• a requirement for the animal health authority in the exporting country to provide the Vietnamese authorities with up-to-date advisories on the disease-free state, or otherwise, of their country and its impacts on any import-export protocols that have been negotiated with Vietnam.

In practice, imports of genetic materials have entered the country from a sizeable number of countries, including the USA, Canada, many EU countries, Australia and New Zealand and, even, South Africa, India, Taiwan and Thailand. Live animals (mainly for slaughter) are also entering Vietnam from Cambodia, China and Laos.

While there appears to be no clear "Developed World style" definition on what the practical regulatory and quarantine requirements are, except for specific bans that would be determined by the activities of the OIE, imports appear to be approved either on an existing import-export protocol base, or on a case-by-case basis. The case-by-case basis approval appears to be done with reference to:

• any livestock development programs, projects or activities that are perceived by the authorities as a valuable contribution to MARD's 2020 Livestock Industry Development Strategy, as well as its component plans and activated or proposed programs covering pigs, beef cattle, dairy cattle, goats and sheep; and,
• the disease status and risk posed by the exporting country, its production facilities, supply chain and the exporter.

The initial reference point for such activities appears to be the institutions, state-owned enterprises (and related provincial and local governments), larger commercial farming businesses, and any aid agency partners / foreign donors that are involved in such programs in Vietnam, as well as the livestock development and veterinary departments within the Ministry of Agriculture and Rural Development (MARD).

Canadian exporters that need assistance in developing "protocols" to support their exports of genetic materials and related supporting services to Vietnam should contact the Embassy of Canada in Hanoi to ensure that their export strategy, plans and genetic material quarantine approvals are appropriate to the requirements of the demand circumstances existing in Vietnam.

13. Future strategic directions and opportunities for Vietnam's livestock industry

The Vietnam economy grew at an average of 7.3% per annum over the 5 years ending 2009. Economic commentators forecast future growth at similar rates over the period to 2015, barring any unforeseen circumstances, which may negatively impact on Vietnam's economy in the future (see table below).

Vietnam Economic Growth Forecasts – 2010 to 2015

	2010 ( %)	2011 ( %)	2012 ( %)	2013 to 2015 % Per Annum
Range of forecasts	6.5 to 6.8	Around 7	6.5 to 7.5	6.0 to 8.0

Source: ADB, World Bank, Vietnam government and independent economic analysts.

Vietnam's population is forecast to grow to 126 million people by 2050, thus increasing the pool of future consumers for pork, beef, goat and sheep meat, and milk and dairy products.

Trade sources now believe that Vietnam has entered a new phase in consumer market development, and there are forecasts that a younger middle income group of up to 20 million persons will exist in 2020. This group is now rapidly developing on the back of the higher disposable incomes that are coming from rapid economic growth.

While there are now very significant concerns that inflation could damage this forecast, most trade sources believe that there is now a "coming boom" in new meat and poultry consumption in Vietnam.

This boom is likely to drive new import growth at rates of between 8% and 10% per annum over the 5 years to 2016.

It should be noted that this rate of import growth is much faster than the growth rates being forecast for local production of meat and poultry in Vietnam over this period. Growth of local production is forecast at between 2.5% and 4% per annum, depending on animal type.

The reader should note that the situation relating to meat price inflation in Vietnam is highly complex, because inflation can arise from a number of factors, or a combination of them, including:

• the weak state of the Vietnamese Dong (local currency) on the global market, This has impacts on animal feed prices in Vietnam because of high demand for imported feed ingredients and inputs. This is also complicated by the dollarization of the Vietnamese economy, whereby some of a producer's domestic operating costs could be denominated in US$, whereas its income is usually in Dong;
• animal disease outbreaks, which can lead to both current and future meat shortages, i.e. due to culling of slaughter-age animals (short term inventories) and also breeding stocks (medium term inventories). This can also involve rumours in the consumer and wholesale markets about disease-related issues (tainted meat) and shortages, or impending shortages;
• the high level tendency by traders in Vietnam to become involved in speculation when there are shortages of products that are in high and consistent demand. The government attempts to control such speculation, but is not always successful; and,
• inherent protectionism, e.g. controls over meat imports, inclusive of "macro management" of meat supplies by the government, and especially the speed at which change in meat import policy occurs. Trade sources comment that this has, in some cases, worsened rather than improved meat price inflation scenarios in Vietnam at times of known disease outbreaks and increasing domestic meat shortages.

Another very important factor that exists in the future development scenario for Vietnam's meat and dairy industries is the government's various strategic plans and the very high level commitment that exists towards their implementation.

As pointed out earlier in this report, the government has the following key development targets for the livestock industry over the period to 2020:

• the livestock industry's share of total agricultural industry output rising to 42% in 2020, up from less than 30% today;
• meat and poultry production increasing to 5.5 million tonnes, under circumstances where 40% of output will come from commercial farms;
• increasing raw liquid milk production to 1 million tonnes in 2020; and,
• establishing the following standing populations of livestock in 2020:
  • pigs at 35 million head, when compared to around 28 million head in 2009;
  • beef cattle at 12.5 million head, when compared to 6.1 million head in 2009; and,
  • 500,000 dairy cattle, when compared to a herd of about 170,000 head of milking cows, immature animals and males today.

All of the indicators being reported in Vietnam today are very positive for Canadian livestock genetic exporters with Vietnam in their strategic business and export development and marketing plans. The reader should acknowledge that all of these indicators are trade and government estimates and government targets.

From the Vietnamese government standpoint, there should be a strategic focus on making future breeding programs, and the supply of breeding stock, more accessible to farmers in a much more effective bio-security environment, which produces meat that meets the demands of:

• Vietnam's growing middle and upper income groups;
• the supermarket chains that are slowly starting to take market share from the wet markets;
• the food service industry, as its grows and expands into new areas, e.g. mid range and higher end restaurants, including fast food chains; and,
• potential export markets, e.g. Hong Kong SAR and Singapore.

This would necessarily involve major improvements in the extension systems across Vietnam, and also the strengthening of farming businesses so that they can profit from new breeding programs and the animals that come from them.

Without a "breeding program + strong bio-security environment" scenario in the industry development equation, it is highly unlikely that Vietnam's evident potential as a quality producer of meat will be achieved over the next 10 years.

14. Opportunities for Canadian exporters of livestock genetics

14.1 The downsides to future industry development scenarios in Vietnam

There are a number of significant downside factors in Vietnam's livestock industry development scenarios that can have very real negative spin-offs for genetic materials imported from any country across the world. These factors include:

• the very weak bio-security environment, which has highly complex impacts both on the smallholder and commercial farming sectors:
  • this is an area in which significant failures have occurred over the past 15 years, and one in which the continuing threats are huge and very dangerous for Vietnam's agricultural economy and related businesses; and,
  • smallholder and backyard farms operate in an inherently weak bio-security environment, with farmers, who often know the risks, but do not have a real capability or capacity to maintain the high standards of hygiene that can prevent disease outbreaks. This situation also overwhelms the extension and veterinary services in Vietnam;
• major weaknesses in extension service coverage:
  • most livestock farms that are involved with extension services are larger operations. According to MARD, only about 35% of livestock farmers across Vietnam are recipients of extension services. This percentage has increased over the past 10 years. A formal survey conducted in 1999 resulted in a finding that only 28% of farmers were extension service recipients; and,
  • on a regional basis across Vietnam, extension service coverage ranges from high coverage of between 40% and 50% of farms in the north central coast and Mekong Delta area, to low level coverage of less than 20% of farms in the central highlands and north east;
• there is a high degree of theory in some of Vietnam's agricultural industry development strategies, and it is possible to get caught up in the local enthusiasm for high profile projects, without proper due diligence or risk analysis being performed to test project viability;
• weaknesses in funding of local research efforts and their effectiveness. According to an ADB study into its Asian agriculture support programs published in 2001, Vietnam has a tendency to underfund its agricultural research and development programs, relative to its agricultural GDP output. The percentage of government agricultural GDP invested in related R&D as cited by the ADB study was only 0.19% in Vietnam, versus 0.54% in China, 0.57 in Malaysia and 1.1% in Thailand;
• weak transmission research findings in Vietnam to farmers and weak collaboration with extension services across the whole of the country; and,
• weaknesses in the uptake of improved breeding and feeding practices by smallholder farmers.

Added to the above factors are two traits in the market that are also specific risks for genetic material exporters:

• imported breeding animals from the Developed World being generally regarded as too expensive by government officials. (Note: Unfortunately, no one in Vietnam seems to understand that this is more a function of poor local currency [Dong] management by the Vietnamese government and the dollarized nature of the Vietnamese market, rather than problems with foreign currencies); and,
• locally, there can be apparent disappointment about imported exotic genetic materials when they fail, as they do under Vietnamese conditions. (Note: Unfortunately it is often the imported product that is blamed for the failure of imported breeding stocks and genetic materials, not the real reasons, which can be highly complex and arise from issues such as bio-security failings, feed and water problems, animal management problems, and the lack of understanding of environment and climate impact on exotics and crossbred animals.

These two traits in the market mean that there is a serious reputational risk in selling breeding animals and semen to Vietnam, if sold solely as a product, and not as a package of product and "after product sales" services. This risk becomes a reality in the form of frequent switching of suppliers and unwarranted rumours spreading about suppliers and their products.

14.2 The opportunities and market development strategies to consider in future

This study has found that Vietnam is a market that has significant opportunities for Canadian exporters of livestock genetics to develop over the 5 years to 2016 and, under the Vietnam's 2020 livestock industry development plans, into the longer term.

Developing this market will not be easy because of the complications that exist in macro control of the development plans and activities (i.e. the complex state linked powerbase), the industry structure and, importantly, all of the downside risks highlighted in the previous section of this report.

For this reason, it would be best for Canadian exporters to actively cooperate with the Canadian government to develop a well thought out and focused "Genetics Canada" marketing strategy that can "open doors" to viable government, state owned enterprise and private sector demand in Vietnam.

This new marketing strategy should include the following components:

• B2B (business-to-business/government agency) marketing campaigns that focus on dealing with the practical realities that exist in Vietnam, i.e. that the sale of breeding stock and genetics is not just a product sale, it must be a "product and services" sale; and,
• developing long term "business focused" relationships with the following entities in order to take advantage of the potential opportunities that might be available from them:
  • key breeding and relevant industry development centres that are controlled by the government across the whole of Vietnam. It should be noted that these tend to operate with varying levels of autonomy and, in practice, may not be wholly centrally controlled; and,
  • the major breeding companies, which operate as state-owned enterprises, other forms of government linked / influenced corporations, and fully private sector owned companies.

Strategically, this would also mean developing a long term business strategy for Vietnam, that should include developing some form of tangible presence in Vietnam to facilitate face-to-face marketing to commercial entities, nurturing technical links with major institutions involved with animal genetics, and, very importantly, to undertaken localised troubleshooting activities.

This would probably mean having to work with an agency in the Canadian government to facilitate such activities, especially market access and regulatory, because most of the key contacts, outside the foreign invested companies, are government linked, influenced or controlled organisations.

In view of the past challenges in the successful implementation of livestock breeding projects and businesses in Vietnam (highlighted earlier in this report), Canadian exporters with an interest in developing a market for their products and services should conduct in-depth market research and, importantly, feasibility studies on the viability of any project involvement in Vietnam. This is important as it would be prudent to review the standing of partner organisations and their ability to contract and meet all of contractual obligations before entering into any agreements with them.

In view of the highly fragmented nature and weak dissemination of livestock breeding information within Vietnam, AAFC, may wish to consider assisting the Vietnamese government to develop a comprehensive and centralised web based library of such information for use by the whole of the Vietnamese livestock industry into the long term. There is currently a Canadian funded CIDA food safety project on-going in Vietnam that may provide one avenue to assist the Vietnamese govt to deal with this issue.

Canadian producers with other products related to opportunities in the markets profiled in this report, and who would like more market information or contacts, may contact the Agri-Food Trade Commissioner at the Embassy of Canada in Vietnam at: vietnam-infocentre@international.gc.ca.