This is in part due to Vietnam having contained the COVID-19 virus relatively early and minimized the economic fallout. The sector had remained resilient during the COVID-19 pandemic, seeing a 4% growth in 2020, or a US$3.7 billion increase in GDP contribution.
Pre-pandemic, Vietnam’s agri-food sector demonstrated strong contributions to the national economy. Findings from the report show that in 2019, Vietnam’s agri-food sector made a GDP contribution of US$86.4 billion. The sector is also responsible for half of the entire workforce with 27.5 million jobs, making it the single most critical source of employment in the economy. The sector also contributed a total of US$13.2 billion in tax revenues.
This was largely driven by Vietnam’s dominant agricultural industry, which contributes over US$55.3 billion in GDP, which is nearly two-thirds of the entire sector. However, the agri-food industry saw greater diversification over the years as both food and beverage manufacturing and distribution saw double-digit growth between 2015 and 2019.
Mary Tarnowka, Executive Director, AmCham Vietnam, said: “The effects of the pandemic have been felt widely and deeply across all sectors, including agri-food, but as a significant pillar of our national economy, the sector demonstrated its resilience by achieving robust growth throughout last year. The crisis can be an opportunity for Vietnam’s agri-food sector to drive our economy to greater heights, promoting food security and sustainable growth, while continuing to support over half of our country’s entire workforce.
“We should continue the diversification of the sector that we’ve seen pre-pandemic, where we deepen our capabilities in higher value-adding roles in agricultural technology, manufacturing, and services.”
Matt Kovac, FIA Executive Director, said: “The report highlighted a range of substantial short-term and long-term challenges facing the agri-food sector in Vietnam, and that it remains crucial for policymakers to recognise and work around these risks, given the scale of the sector’s contribution to Vietnam’s jobs and GDP. With strong headwinds projected for 2021, it is imperative for the Vietnamese government to remain mindful of this with any policy that could impact the industry.”
The report recommends that for the Vietnamese government to develop successful fiscal responses that do not inhibit the recovery of the agri-food industry, three conditions need to be met: using education to influence behaviour; favouring regulatory standards over taxes; and maintaining a constant conversation with the industry.
FIA was founded in July 2010 by a group of leading food and beverage companies. FIA brings together the food
industry’s most senior business leaders to champion initiatives that promote sustainable growth and support regional
policies that deliver harmonised results.