Source: nongnghiep.vn
Dr. Cao Anh Duong, Director of the Sugarcane Research Institute (SRI). Photo: nongnghiep.vn
The sugar industry market is still vast
Table of Contents
Not long ago, sugarcane in our country had a heavy decline in area, causing sugar output to decrease sharply. But in recent crop years, sugarcane production has had a certain recovery thanks to increased sugar and cane prices and trade defense measures. How do you assess the prospects of sugarcane in Vietnam, especially in the context of increasingly fierce competition with other crops?
If calculating economic efficiency directly, then efficiency from sugarcane is not high. However, compared to many other key crops, sugar cane still has certain advantages. Regarding the market, few key crops have an open domestic market like sugarcane.
Currently, sugar consumption demand in our country is about 2 million tons/year. Meanwhile, sugar output in the 2021-2022 crop year is more than 900 thousand tons. Crop year 2023 – 2024, sugar industry set a target of producing 1 million tons of sugar. Thus, domestic sugar output currently only meets half of demand. Therefore, there is no need to consider exports, the domestic market alone currently helps the sugar industry not have to worry about output.
Branch sugar cane has a great advantage that the level of mechanization is quite high compared to many other industrial crops. Mechanization has occurred in nearly every stage of farming. Promoting mechanization is helping the sugar industry reduce production costs, increase profits and especially reduce pressure on labor when agricultural labor is increasingly scarce and labor costs are increasing.
According to Dr. Cao Anh Duong, sugarcane is still able to compete well with some key crops. Photo: nongnghiep.vn
The level of connection and formation of supply value chains in the sugar industry is also much higher than in many other industrial crops, because the sugar industry’s characteristic is the interdependence between sugarcane growers and sugar factories. If sugarcane farmers do not sell sugarcane to sugar factories, they will not be able to sell it anywhere else, and if sugar factories do not buy sugarcane from farmers, they will not have raw materials for production. Therefore, sugarcane growers almost do not have to worry about output when right from the beginning of the season, factories have invested in advances to farmers and have sugarcane purchasing contracts.
On a national level, the competitiveness of sugarcane is currently not high compared to many other key crops. But in many places, sugarcane is still able to compete well. As in Dong Gia Lai, sugarcane is almost beating other crops because of its better economic efficiency. Or in Son La, sugarcane only has to compete with corn, but domestically produced corn is inferior to imported corn.
Sugarcane growers have not received their fair share of benefits
You don’t have to worry about output, you get advance investment from the factory and you have a product consumption contract, but why in many sugarcane areas are farmers no longer interested in sugarcane, even when sugarcane prices are increasing? in recent years, sir?
In the report “Supply chain of Vietnam’s sugar industry” completed in early 2022, a team of authors from Forest Trends and SRI assessed that the sharing of benefits between stages in the supply chain is currently imbalanced. for serious when people sugarcane planting plays the biggest role but receives the least benefits.
Dr. Cao Anh Duong said that in the relationship between sugarcane production, businesses are always in the upper hand. Photo: nongnghiep.vn
Sugarcane growers, mainly smallholder farmers, are playing a key role at the beginning of the sugarcane industry’s supply chain. They are supplying most of the raw sugarcane to processing factories. However, the role, position and especially the benefits of sugarcane growing households gained from participating in the supply chain are the smallest compared to other groups participating in the chain.
Sugarcane growing households participate in linking and supplying raw materials to sugar processing factories. However, in this link, the factories are always in the upper hand, making decisions about the quality and price of raw sugar cane. Sugarcane growers have almost no say in shaping these decisions.
The sugar industry has mechanized many stages of production. Photo: nongnghiep.vn
Need to remove 2 bottlenecks of the sugar industry
What issues does the sugar industry need to solve so that farmers can feel secure in sticking with sugarcane for a long time and the whole industry develops sustainably, sir?
For the sugar industry to develop stably and sustainably, first of all, two main bottlenecks must be immediately removed: benefit distribution and sugar transparency.
To distribute benefits fairly, farmers must have a voice in forming sugarcane purchasing prices through price negotiation between farmers and factories. Currently, the state’s legal corridor has quite clear regulations on internal price negotiation Price Law 2012: Raw sugarcane is eligible for price negotiation before each harvest between farmers and sugar factories.
In case price negotiation is unsuccessful, Circular No. 56/2014/TT-BTC of the Ministry of Finance stipulates “In case price negotiation has been organized but the parties have not yet agreed on the price, the organizing agency shall Price negotiation (Department of Price Management/Department of Finance) decides the temporary price for both parties to implement.
The regulations already exist and are so clear, but for some reason, the negotiation of sugarcane prices between farmers and sugar factories before each crushing season is not implemented or is not implemented successfully, so the purchasing price of sugarcane is still mainly determined by the price of sugarcane. Sugar factories make their own decisions, contrary to the Price Law. This situation has lasted for nearly 10 years without anyone or any organization being punished.
Harmonious benefit sharing in the production chain will help farmers become more attached to sugarcane. Photo: nongnghiep.vn
So the problem sugarcane price needs to be considered and resolved immediately by the Government, relevant ministries, branches and local authorities. Only by ensuring fairness in benefit sharing can the parties involved in the sugar cane supply chain continue to accompany, cooperate, and develop in the long term.
In addition, the government needs to stipulate that text analysis must be performed by an independent unit, avoiding factories doing it themselves. Currently, many analysis and testing centers have enough capacity to analyze road text. They only need to invest in some machinery and equipment to be able to perform road text analysis services.
While there are no state regulations, factories can implement the most transparent solutions possible regarding sugar to create trust for farmers. A typical example is Nghe An Sugar Cane Company Limited (NASU) has applied near-infrared (NIR) technology to analyze road text most accurately and transparently today.
Data on sugar analysis results of each sugarcane truck, along with the number of harvest orders issued, weight and impurity removal ratio will be automatically connected and transmitted to mobile phones by the My NASU application software. of sugarcane farmers so that farmers can immediately know the amount of sugarcane money they receive. Thanks to that, NASU has created the trust of farmers and the area raw sugarcane of the company still increased during a time when sugarcane area in the country decreased sharply.
Farmers must have a voice in forming sugarcane purchasing prices through price negotiation between farmers and factories. Photo: nongnghiep.vn
In addition, it is necessary to promote solutions to increase the competitiveness of the sugar industry and increase the competitiveness of sugarcane against other crops. In particular, it is necessary to further increase investment in scientific and technological research (S&T) on sugar cane. 2024, Sugarcane Research Institute (under the Vietnam Academy of Agricultural Sciences) – the only science and technology research agency specializing in sugarcane in Vietnam that is only assigned to carry out 2 science and technology tasks with a total budget of only 670 million VND. This is a very low number, on average it only reaches less than 26 million VND/scientific officer/year, much lower than the minimum level of 100 million VND/scientific officer/year that leaders need to achieve. Vietnam Academy of Agricultural Sciences has proposed.
Thank you Sir!
In the current context of state budget investment in science and technology becoming increasingly difficult and tending to be cut, the Government may consider and promulgate a regulation to deduct a portion of profits per ton of sugarcane. or sugar produced to invest back in science and technology research, similar to the method that many sugarcane producing countries in the world are applying. Only then will scientific and technological research on sugarcane in Vietnam be provided with sufficient funding, operate effectively, create new sugarcane varieties and technical advances, and promptly meet the needs. development needs of Vietnam’s sugar industry.
