Country Profiles

National Industry

Vietnam has experienced rapid economic growth and achieved remarkable poverty reduction since the introduction of economic reforms in 1986. Agricultural growth, at over 4 percent per year, has contributed significantly to this outcome. Within agriculture, the expansion of smallholder livestock production has been a major contributor to increasing farm incomes and reducing rural poverty in Vietnam.

The agriculture sector currently accounts for 21 percent of GDP and about 58 percent of employment. The livestock sub-sector accounts for 27 percent of the agriculture output value (GSO 2014). Beef cattle production is an important industry in the livestock sub-sector, being the third largest industry after pigs and poultry.

Traditionally, cattle were reared by smallholders for draught purposes. Cattle were only slaughtered for consumption when they were unproductive. Today, mechanisation is gradually replacing the animal draught power, which reduces the need for smallholders to keep draught cattle.

The demand for beef as a superior product, particularly in urban areas in Vietnam, has been growing rapidly in recent years due to income increases and population growth. With constrained supply, prices for cattle and beef have thus increased sharply. This, together with regional integration, provides opportunities for smallholders in rural areas of Vietnam to become increasingly specialised in beef production to supply quality beef to urban markets.

Today the beeft industry in Vietnam is still based on smallholder production of one to four head per household, and this pattern is expected to continue in the future. However, there are an increasing number of households that specialise in cattle fattening for slaughter in central and southern Vietnam.The beef industry was able to meet around 70 percent of current domestic demand in 2013 (MARD 2014)

The statistics2 in Table 1 provide overview of the cattle and beef industry in Vietnam. The country had 5.16 million cattle head (including draught and dairy cattle) in 2013. The turnoff number3 was 1.77 million (annual growth of 8.8% on average). This has resulted in a sharp increase in beef production with an annual growth of 8% on average. The growth rate of the turnoff number is higher than that of beef production, which may suggest average carcass weights have declined. However, as the turnoff numbers could be higher than actual slaughter numbers, there may not be enough confidence in the slaughter numbers to draw this conclusion. Nevertheless, the high turnoff levels are an indication of increased specialisation and exchange of animals. The increase in beef supply per capita (6.9%) over the period reflects the increase in the turnoff/slaughter number. The cattle prices increased at the rate of 4.6% annually on average.

Data is provided by the Centre for Informatics and Statistics/MARD based on the official data drawn from the annual livestock reporting system by the General Statistics Office in collaboration with MARD. Data on buffaloes and buffalo meat is not included.
It is important to note that the exchange of animals can happen several times before an animal is slaughtered. Thus, the turnoff figures could be higher than actual slaughter numbers.

The cattle industry in Myanmar is still at initial stage. However, there are a number of drivers that influence the industry development. Vietnam’s population reached 90.5 million in 2014, and is forecasted to grow to around 120 million by 2050 (UNFPA, 2014). In addition, the average annual GDP growth rate between 1995 and 2013 was 7.5%, and GDP per capita in 2013 (current USD) was $1,911 (World Bank, 2014). The purchasing power parity (PPP, current USD) was $5,294. As a superior product with positive income elasticities, beef demand is expected to increase rapidly in the next decades. Vietnam is also urbanising rapidly (currently 30% with 3.4% urban population growth per year) (UNFPA, 2014). This increases demand for high quality beef, but, on the other hand, provides opportunities for rural farmers to work off-farm or in more lucrative agricultural activities. Increasing opportunity costs of labour mean that small scale cattle production becomes less attractive economic activity for smallholders.

Figure 1 indicates a sharp increase of the cattle number in the period 2002-2007. This was in great part due to government support policies including subsidies for crossbreeding cattle and fodder plantation, credit provision, and breeding selection program. Another reason is that in many upland areas, farmers switched from raising buffalos to raising cattle because of their higher reproduction rate (Stur & Gray, 2014). In addition, during this period, demand for beef rose, the price for cattle meat increased, and farmers were able to make profit from raising cattle. Smallholders started raising more cattle using extensive grazing systems.

However, the number of cattle dropped from 6.7 million head in 2007 to 5.2 million head in 2013. Some obvious reasons are (i) an increase in the turnoff/slaughter number due to strong demand from China and domestic markets, and (ii) increased mechanisation reduced the need for draught cattle.

Beef production has risen significantly. However, in 2013 domestic beef production declined slightly compared to 2012 (Figure 1).

Figure 1: cattle production in Vietnam

chart cattle production in Vietnam

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