Experience link value chain of banking in export rice rice in the mekong delta

Nội dung text: Experience link value chain of banking in export rice rice in the mekong delta

1. EXPERIENCE LINK VALUE CHAIN OF BANKING IN EXPORT RICE RICE IN THE MEKONG DELTA Dr. Nguyen Thi Truc Phuong Lecturer in Finance and Accounting Department University of Food Industry HCM City phuongnguyen_74@yahoo.com.vn Mobile: 0968 899 217 Abstract The paper focuses on analyzing and evaluating the issuance and results of the implementation of the Government's credit policy for agricultural and rural development and for rice production and trading since 2014. At the same time, write and analyze and evaluate the process of implementing credit policies to form a value chain of Standard Chatered Bank in the production and trading of export rice in the Mekong Delta. Experience and implementation status of Standard Chatered Bank since 2014. Research using methods is a statistical description from many different secondary data sources. The results show that the credit policy of the Government and the implementation of ministries are quite timely. Especially, the experience of implementing credit policies to form a value chain in production, business and export of rice in the Mekong River Delta is quite suitable for sustainable development in this area, raising prices treat export products of Vietnam rice. Based on the analytical results, the research provides some policy implications about the experience of Standard Chatered Bank implementation for Vietnam's commercial banks and related agencies and localities of Vietnam. Keywords: experience link, value chain, export rice, Mekong Delta 1. Introduction Developing value chain links between banks, businesses and producers, with the participation of the university's scientific research agency is an objective indispensable requirement for sustainable development of improving business performance of banks, businesses and producers. To form this value chain, requires initiative, willingness to cooperate of banks, businesses, effective participation of universities and research institutes, creating attractive attraction for producers are ready to participate; in which, it is indispensable for the policies of the Government, relevant ministries and provinces, cities, and localities where production and trading activities of such agricultural products take place. 329
2. In recent years in Vietnam, a number of linkages between producers and businesses have been initially formed and operated effectively in a number of areas. The chain of links between Standard Chartered Bank and An Giang Plant Protection Company (AGPPS) invests in the agricultural sector in the Mekong Delta region with the aim of helping to establish a chain of value production and business. Sustainable closed rice, is a good example in this area. However, the linkage models have not appeared much in Vietnam, the domestic commercial banks have not actively and actively implemented value chain. The article on relevant credit policy research of the Government and implementation of the formation of linkages in the field of agriculture and rural areas, analysis of the experience of Standard Chartered Bank implemented in the Mekong Delta and give some recommendations. The situation in Vietnam's production and consumption of agricultural products in general, the production and consumption of exported rice in the Mekong River Delta in particular is fragmented and small production according to each household, and lacks. The close link with the value chain between producers, suppliers of materials, breeders, lenders, ensures sustainable, branded development and guarantees prices for the market. The quality of rice products is limited, the rice export brand is also not available, so Vietnam's rice products lack competitiveness in the international market, the export price of rice is low, the market is uncertain, especially the place on the fastidious markets. Therefore, practical research on the experience of Standard Chartered Bank and An Giang Plant Protection Company (AGPPS) invests in the agricultural sector in the Mekong Delta region with the aim of helping to form a link chain. value of production and business of rice in a closed and sustainable manner for export rice, recommendations for Vietnamese commercial banks to implement on a large scale and apply to other export agricultural products with urgency in the integration period Vietnam's increasingly international economy. So far there are some common concepts about value chains that can be seen as follows: Value chain is a concept from business management that was first described and popularized by Michael Porter in 1985 in a book on analyzing his competitive advantage: "Value chain is a series of activities. east of a company operating in a particular industry. Products go through all the activities of a company that operates a particular industry. The product goes through all the activities of the series in a series and at each production activity gets some value. The chain of activities brings more value-added products than the total value added of activities combined. ”Nguyen Tuan (2014) 330
3. Next, researcher Kaplins Rapheal introduced the concept of value chain in globalization analysis: "Value chain is a series of activities necessary to turn a product or service from the moment it is a concept. recite, through various stages of production (including a combination of material transformation and input into different production services), until distribution to the end consumer and subsequent disposal when used ”. And a value chain exists when all participants in the chain work to create good value for the series. Nguyen Tuan (2014) Thus, we can explain the definition of value chain in narrow or broad sense. In a narrow sense, a value chain consists of a series of activities performed in a company to produce a certain product. All activities from design, process of bringing input materials, production, distribution, marketing of sales, implementation of after- sales services have created a chain connecting producers with consumers. Moreover, each activity adds value to the final product. In other words, a customer can afford to pay more than a product with better after-sales service. Similarly, for agricultural companies, an appropriate cold storage system for fresh materials (such as vegetables, flowers, fruits) will have a good effect on the quality of finished products, and therefore , will increase product value. Another expression, in a broad sense, is the value chain of raw material production and shifting systems with production, business, assembly, processing and consumption units. In a narrow sense: a value chain consists of activities carried out within a business to produce a volume of goods, provide or complete a certain service within a certain period of time. Nguyen Tuan (2014) Overall assessment of previous studies on Vietnam practices has not yet had any specific analysis and review on the value-linked model between Standard Chartered Bank and An Giang Plant Protection Company (AGPPS). implementing investment in the agricultural sector in the Mekong Delta region. Clarify the benefits of forming a chain of sustainable closed rice production and business values. Through the article, the author clarifies benefits of joining value chain, First: timely and reliable information sharing; Second, reduce the complexity of market transactions; Third, reduce costs in chain links; Fourth, ensure stable operation throughout the entire chain system; Other benefits, such as improving reputation and competitiveness in the market, sustainable development, So far there are quite a number of domestic and foreign works studying value chain links. In particular, theoretical studies focus on clarifying the concepts of value chain, components in the link chain, role and meaning of the link chain, factors affecting the chain. value. Foreign practical studies focus on introducing linkage experiences in agricultural production in the form of cooperative and cooperative 331
4. models of some countries on the production, processing and consumption of agricultural products. Practical research in the country has a number of works, introducing the linkage models in dairy farming and milk consumption of Vinamilk, Moc Chau Dairy Cow Joint Stock Company; CPGroup's pig production and consumption, production and consumption of some other agricultural welding surfaces. According to Ngo Xuan Tinh (2017), in practice implementing the guidelines of the Party and the State on developing production in the value chain on the basis of promoting the advantages, potentials and strengths of each locality associated with the price chain. regional and global values, the whole country has formed many production areas according to the value chain of products, key goods, large-scale and spread, significantly as: production of high-tech clean vegetables, sturgeon, lemons in Son La province; value chain of Luc Ngan and Bac Giang litchi products; chain of safe vegetable production in Da Lat - Lam Dong; value chain of catfish and catfish products in Can Tho Various forms of organizing consumption of products in series bring efficiency such as: Vietnam Safe Agricultural Products Consumption Association (UCA), connecting nearly 100 cooperatives to build UCAmart branded stores; chain of Co.opmart supermarkets of Saigon Co.op with the system of over 80 supermarkets throughout the country etc. For Thai Nguyen province, initially appeared many models of enterprises and cooperatives in some districts, cities and towns that organize production and trading of products such as bud tea, pig and chicken. Fish, vegetables, tubers, fruits, etc. according to the value chain or participating in some stages of the chain bring positive results. According to Leu Vu Dieu (2017), there are more than 10 thousand farmers participating in technical demonstration models and applying sustainable standards for some agricultural products in collaboration with multinational corporations. family. Many production and business farmers have worked closely with each other to build cooperative groups, cooperatives, to form linkages along the value chain that support and guide farmers to connect with the market. Many agricultural products in Vietnam have been present in many countries around the world. However, until now, there has not been any research work on the experience of forming a link chain in the production, purchasing and processing of rice for export in the Mekong Delta with the role of a focal point, formed by a foreign bank in Vietnam deployed. The article focuses on clarifying this content and making some recommendations. 2. Research Methods The article studies the reality of deploying value linking model in rice production for export in the Mekong Delta region, the author uses qualitative research 332
5. method. The author is based on actual observations, exchange of experiences and direct interviews with a number of specialists of Standard Chartered Bank, some officials in local areas, rice farmers participating in a chain of links, specializing in Members of AGPPS, the author is also based on secondary data, based on reports of Standard Chartered Bank, AGPPS, of some authors published in the mass media. On that basis, the author synthesizes, analyzes, compares, evaluates and draws comments and suggestions in the direction of research. 3. Research results 3.1. Credit policy for establishing value chain and implementing in practice A bank credit policy is very important to facilitate the establishment of a value chain in the field of agriculture and rural areas in the past and now it is Resolution No. 14 / NQ-CP dated 05 / 3/2014 regular Government meeting in February 2014. In this Resolution, the Government assigned the State Bank of Vietnam (SBV) to coordinate with the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Science and Technology (Science and Technology) to implement the pilot lending program. linkage model, high technology application in agricultural production. Next is Decree No. 55/2015 / ND-CP on agricultural and rural credit policy. However, these documents do not adjust and do not mention universities in the models of high-tech applications. State Bank of Vietnam (2015) Implementing the Resolution No. 14 above, the SBV has collaborated with the Ministry of Industry and Rural Development and the Ministry of Science and Technology to implement the pilot program of high-tech application production model. The ministry has selected 28 enterprises in 22 provinces and cities nationwide to implement 31 agricultural production projects under the model of linking and applying high technology. But one thing worth noting is that there are no models of the above 31 projects that have the role of universities or the participation of universities and research institutes. State Bank of Vietnam (2015) After more than one year of implementing Resolution No. 14, the inter-ministry has made assessments and withdraws experiences from the pilot phase, based on that, to include and supplement the provisions of Decree No. 55/2015 / ND-CP on credit policies for agricultural and rural development, contributing to promoting the formation of valuable linkages between stakeholders. State Bank of Vietnam (2015) Resolution No. 14 and now Decree 55/2015 are important legal bases to create opportunities, but also pose significant challenges in the competition for expanding credit safety, capital flows. to agriculture - rural areas, invest capital for models 333
6. linking value chains, high technology application to domestic commercial banks (commercial banks), international economic integration in the coming time. Finding out "niche" market segments; methodical, long-term, systematic investment for customers by value chain is a business strategy trend that many foreign banks in Vietnam are implementing, considered a reference for reference. positive for domestic commercial banks. As for universities, scientific institutes also need to actively explore the needs of practice, really change in research to connect with the demands of businesses and the market. 3.2. Experience of Standard Chartered Bank on the implementation of the rice export value chain in the Mekong Delta A credit solution to contribute to promoting sustainable rice exports is considered very important, started by a foreign banking group in the Mekong Delta region in recent years, possibly It is considered a positive reference, or a challenge for Vietnamese commercial banks in competing to expand credit safety in the current trend of integration and credit environment. This is also a large market and also a challenge in scientific research associated with the reality of Vietnamese universities and research institutes. Specifically, from the beginning of 2014, Standard Chartered Bank, a 100% foreign-owned bank in Vietnam, decided to sponsor a capital of US $ 70 million, equivalent to VND 1,500 billion of preferential loans to Plant Protection Company. An Giang (AGPPS) invests in the agricultural sector in the Mekong Delta region with the aim of helping to establish a chain of sustainable rice production and trading values. This is a reputable enterprise in supplying materials and related fields for farmers in general, rice farmers in particular in this region. Dieu Huong (2014) In Long An province, AGPPS has urgently built a logistics center specializing in packaging leading modern export rice in Asia on an area of 6.5 hectares in Tan An city with an investment of VND 150 billion. Previously, Long An Provincial People's Committee decided to allocate 1,000 ha of agricultural land in Tan Hung to AGPPS to specialize in researching, producing high quality seeds for farmers in the region, mainly Farm households produce rice for export. The study was conducted by AGPPS, without the participation of scientists from any university or research institute in the region of quality assurance or of Vietnam in general. Dieu Huong (2014) Not only in Long An, in Dong Thap, AGPPS also built a center specializing in the production and supply of similar high quality seeds, after being handed over to Dong Cat Farm with 400 ha. Dieu Huong (2014) 334
7. In addition, AGPPS cooperates with Satake Group (Japan) to research and install high-tech rice dryer, whitening and polishing machines to improve the quality of AGPPS commercial rice in regional and national markets. sacrifice. This project comes into operation is a great advantage for farmers to produce export rice, as well as improve rice export efficiency. This is also a favorable opportunity for commercial banks to invest capital for rice farmers. Huynh Van Thon (2014) In fact, from 2010 to the present, AGPPS has invested capital to develop a chain of sustainable rice production value, also known as a large sample field model, through the linkage of building material areas and signing co-targeting products, supplying seeds, preventive and curative medicines, fertilizers , and providing free support for many harvest stages for farmers. In addition, AGPPS invested in building five groups of food processing factories, mainly exported rice in material areas in the provinces of An Giang, Long An, Dong Thap and Bac Lieu in the Mekong Delta region. Huynh Van Thon (2014) Up to now, a large model field model has been evaluated by the authorities to achieve high economic efficiency. As planned, in 2018, AGPPS production chain will have 360,000 hectares of rice cultivation and complete 12 rice processing factories with a total capacity of 2.4 million tons of rice per year in the Mekong Delta region. Huynh Van Thon (2014) Upon completion of the above investment projects, AGPPS will form a closed rice production and trading chain. Accordingly, with farms in Tan Hung and Dong Cat, AGPPS is associated with establishing a centralized unit to research and produce high-tech varieties. This unit will produce super-prototypal, primitive rice varieties, then cooperate with farmers to build material areas specializing in supplying certified rice varieties, experimentally producing corn varieties and high-quality crops. At the same time, building a processing and storing plant to supply rice, maize, varieties to the whole Mekong Delta region and exporting to some countries in the region. Huynh Van Thon (2014) With the logistics center will gather rice from five food processing zones and existing material areas of AGPPS in the Mekong Delta provinces, thereby organizing the processing and packaging of rice packages, including nutritious rice. Vibigaba, other value-added products from rice. This is also a trading center, providing rice for the domestic market and export of the Mekong Delta region. AGPPS has achieved important results in exporting rice to Japan, the capital market is considered the most fastidious in the world but the selling price is quite good. The cooperation with Satake helps AGPPS rice products continue to enter Japan and other markets. Huynh Van Thon (2014) 335
8. Standard Chartered Bank also funded investment in science and technology, in deep processing to add value-added products to maximize the value of agricultural products. Next, Standard Chartered Bank provides capital support for AGPPS to continue the implementation of utilization of straw waste in agricultural production, both to protect the environment sustainably and to increase income. AGPPS will then complete a closed production chain from the supply of seeds, agricultural supplies to processing and consuming various products from agricultural products, especially rice, a strength of Mekong Delta region. In the past, social investment capital as well as foreign investment in the agricultural sector in Vietnam, especially in the Mekong Delta region, were very limited. For the first time, Standard Chartered Bank, a leading foreign bank involved in this field, is very encouraging. Standard Chartered Bank found that the rice production chain in the model of large sample fields is in the right direction and inevitably brings high economic efficiency, low risk and positiveness to society, so it has bravely funded and support for AGPPS. That creates a spillover effect, there will certainly be more businesses to implement the model and have more international financial institutions and domestic commercial banks to participate in similar investments. Before Standard Chartered Bank financed its capital, the bank invited and sent many delegations, investment experts, and finance, including a group of specialized scientific and technical experts to the field to thoroughly evaluate the production chain. which AGPPS is implementing. They found that AGPPS organized in a sustainable manner, especially saw the partner's real work, so they bravely funded long-term capital with AGPPS in the production and export of quality rice High into regional and international markets. In this model, there is no involvement of universities or scientific research institutes, whether or not this participation is due to practical requirements, due to the effectiveness of the research institution itself. Standard Chartered Bank directly invites a group of specialized scientific and technical experts, not cooperating with any universities, this is a concern. Standard Chartered Bank, through its practical research on investment customers, has been completely convinced by the effectiveness of a large sample field model by AGPPS and farmers who are effectively implementing in many localities. In the Mekong Delta region, it has brought harmonious benefits to farmers. In addition to the economic benefits, Standard Chartered Bank wants to create a further impetus to develop this model, in order to create new values for Vietnam's rice exports in the international rice market in a way. long-term and reputable, secure funding of the bank. 336
9. 4. Discussion and Conclusion Standard Chartered Bank's approach is a valuable lesson of reference for Vietnamese commercial banks in determining the strategy of expanding credit safely, effectively, in close financial support, accompanying enterprises to the beginning. Private investment from seed, production, purchasing, processing and export. This activity has the legal foundation of Decree 55/2015 / ND-CP of the Government promulgating credit policy for agricultural and rural development. Domestic commercial banks should urgently implement the selection of reputable businesses that are eligible to finance the above model of sustainable rice production. At the same time, researching and deploying to expand into other areas of Vietnam vomit and seafood export, such as dragon fruit, mango, milk breast, catfish, Basa fish, shrimp, bring many benefits. participants, reduce risks for banks. The proposed model of Vietnam's rice production and trading in general, including the Mekong Delta region, can also be applied to other agricultural products and seafood exports, such as: rambutan pomelo, mango, breast milk, dragon fruit, shrimp, catfish, Commercial banks only need to adopt a clue that the state-owned company has been equitized, or a private enterprise engaged in rice procurement, a reputable enterprise supplying seeds, fertilizers and medicines. insecticides, agricultural tools and purchasing, processing and consuming rice. In other words, Vietnamese commercial banks must be proactive in participating in a closed chain, completing step by step credit operations to ensure sustainable, effective, minimizing risks and at the same time contributing to Part of creating products such as rice, coffee, rubber, pepper, cashew, seafood, tropical fruits, best, reputable, hygienic and safe food, provided to the market domestic as well as export, expanding and improving the competitiveness of Vietnam's agricultural products for export on the international market. In current practice, Vietnamese commercial banks are lending capital to each participant in each stage in the process of exporting rice, coffee, rubber, cashew nuts, pepper, dragon fruit, rambutan, and breast milk. , shrimp, pangasius according to legal basis, meaning Decree 55/2015 / ND-CP, including: rice farmers and all kinds of agricultural and aquatic products mentioned above, traders buy rice and commodities agricultural and aquatic products; enterprises exporting rice, coffee, and catfish Therefore, bank managers need to conduct research on lending plan focusing on one clue according to the above value chain. From the diagram and process of the chain of rice export value mentioned above, commercial banks should actively discuss, discuss and cooperate with enterprises to deploy agricultural products and key aquatic products of Vietnam. 337
10. Deploying this bank credit solution, commercial banks only need to finance capital through a focal point which is the central enterprise of the Linkage Model, reducing costs and time for appraisal, debt collection, ensure safety; faster credit capital rotation, effective for both producers, suppliers and buyers, processing of agricultural products, high quality seafood, ensuring food safety and hygiene standards of all fastidious markets, boosting exports. Forming value chain links is an indispensable requirement of international economic integration, the trend of sustainable development in agricultural production and commercial activities of commercial banks. This is not the owner, the policy, the policy orientation of the Government, the agencies to build macroeconomic policies, effective business strategies of commercial banks and businesses, but also is the demand of farmers and producers. On the side of domestic commercial banks, it is necessary to urgently select reputable enterprises that are eligible to finance all fields of agricultural production according to the above-mentioned model of sustainable rice production. , bringing benefits to many stakeholders, reducing risks for banks. Universities and research institutes need to invest in researching the above model in order to participate in value chain in the future, should not stand outside or not, banks, businesses, people Production put into participating value chain links. However, the participation of universities and research institutes in value chain links must be based on market principles, ie to bring about the effectiveness of stakeholders, on the basis of Voluntary. This is an innovation requirement in research activities of universities. Reference sources: 1. State Bank of Vietnam (2015): "Report on evaluation of implementation of Resolution No. 14 / NQ-CP dated March 5, 2014", Internal circulation documents, Department of Economic Credit, Hanoi, April 2015. 2. Dieu Huong (2014): "Standard Chartered financed US $ 70 million for a large model field model", Hanoi, January 2014, accessed on January 2, 2018 at http: // enternews. vn / standard-chartered-tai-tro-70-trieu-usd-cho-mo-hinh-canh- dong-mau-lon-17675.html 3. Huynh Van Thon (2014): "Foreign capital into rice production chain", Ho Chi Minh City, February 2014. Access on 2/1/2018 at the address: 4. Nguyen Tuan (2014): "BASIC CONCEPT OF THE VALUE CHAIN". Accessed on April 9, 2018 at: quan-ly/item/284-khai-niem-co-ban- ve-chuoi-gia-tri 338
11. 5. Ngo Xuan Tinh (2017): "Producing according to the value chain - solutions to consume agricultural products 6. Access at: theo-chuoi-gia-tri-giai-phap-tieu-thu-san-pham- nong-nghiep-195.html. Access date 18/3/2019 7. Leu Vu Dieu(2017), "Developing value chain in agricultural production: The key to improving agricultural value". 8. Visit at: gia-tri-trong-san-xuat-nong-nghiep-chia-khoa-nang-cao- Gia-tri-nong-san 339