MARD Proposes Higher Import Tariffs

VIET NAM - The Ministry of Agriculture and Rural Development (MARD) has asked the government to discourage the import of meat and animal products which can be made domestically.

19 September 2008

4 minute read

The overly low import tax has been considered the ‘chief culprit’ behind the overflow of meat, eggs and milk into Vietnam recently.

Nguyen Xuan Duong, Deputy Head of the Livestock Husbandry Department under the Ministry of Agriculture and Rural Development (MARD), said that imports of meat and dairy products have become worryingly high recently and threatening local production.

He went on to say that local production is facing big difficulties due to lack of capital, epidemics and higher feed prices. Meanwhile, local breeding farms cannot sell their products due to the massive imports.

According to Duong, the prices of poultry meat and eggs have decreased, with chicken selling at VND23-24,000/kg and eggs at VND1,400-1,500/egg.

Prof Nguyen Dang Vang from the Livestock Breeding Institute also said that Vietnam has imported too much meat and poultry meat so far this year, which has put big difficulties on local farmers.

Vang said that 118,000 tonnes of meat of different kinds were imported into Vietnam in the first eight months of the year, while Vietnam’s meat exports have never reached that level. If the current import growth rate is maintained, Vietnam will import 200,000 tonnes of meat this year.

Also according to Vang, one of the reasons behind the high imports is the decreased import tax.

Vang said that he well understands that the import tax was cut by the government in an effort to restrain inflation and ensure sufficient supplies for domestic consumption. However, the import tax should be high enough to encourage local production.

In fact, the government of Vietnam has cut taxes on this group of goods sooner than the deadlines stipulated in the country’s WTO commitments.

Under its WTO commitments, Vietnam does not have to cut the tariff on beef to 14% until 2012, while it has slashed the tax rate to 12% already. Vietnam only has to cut the tariff on fresh and frozen pork to 25%, but it has slashed the tax rate to 20% already.

Vietnam does not have to cut tariffs on chicken, duck and wild goose meat, but it has slashed the tariffs from 40% when it officially joined the WTO in early 2007 to 12%. Under its WTO commitments, the import tax on milk materials must be slashed to 18% in 2009, while Vietnam is imposing 10% on the imports now. The import tax on poultry eggs has also decreased from 80% in early 2007 to 20%.

MARD thinks that Vietnam should follow the commitments it made when joining the WTO on cutting taxes on meat and poultry meat and related products.

According to the Livestock Husbandry Department under MARD, Vietnam exported $80mil worth of animals and animal products in the first seven months of the year, while it imported $321.8mil worth of these products, including $187.6mil worth of milk and cream, $82.7mil worth of poultry meat, $12.5mil worth of pork, $17.2mil worth of beef.