Decision No. 22/2005/QD-BCN Approving the Development Plan for the Dairy Industry in Vietnam until 2010 and Orientations until 2020

DECISION OF THE MINISTER OF INDUSTRY

Approves the Master Plan for the Development of the Dairy Industry in Vietnamuntil 2010 and orientations until 2020

_____________________________

THE MINISTER OF INDUSTRY

Pursuant to Decree No. 55/2003/NĐ-CP dated May 28, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Implementing the delegation of authority from the Prime Minister under Document No. 126/TTg-CN dated January 28, 2005 of the Prime Minister regarding the Master Plan for the Development of the Dairy Industry in Vietnam until 2010 and the orientation until 2020;

Based on the opinions of the Ministries of Planning and Investment, Finance, Agriculture and Rural Development;

At the proposal of the Director of the Department of Consumer Industry and Food,

DECISION:

Article 1. Approves the Master Plan for the Development of the Dairy Industry in Vietnam until 2010 and the orientation until 2020 with the following contents:

1. Development Orientation

a) Mobilize resources from all economic sectors to develop the industry to meet domestic consumption needs and promote exports;

b) Enhance the competitiveness of the industry, apply advanced technology and techniques; Develop the industry towards openness, flexibility, diversification of products to meet market demands and requirements for active integration into the international economy;

c) Vigorously develop efficient dairy cattle herds with competitive capacity, forming concentrated dairy farming regions based on widely applying technological advancements and new breeds with high productivity and quality. Focus on research to select core herds for the industry. Invest in factories and workshops for storing feed (hay and by-products) and processing concentrate feed for cows;

d) Develop the dairy processing industry towards increasing the proportion of domestically produced fresh milk and reducing the proportion of imported powdered milk. Production facilities must have specific investment programs aimed at developing dairy cattle herds;

2. Objectives of the Master Plan

a) General Objective

Gradually build and develop the Dairy Industry in a synchronized manner from raw material production to final product processing, meeting domestic consumption needs, reaching an average of 8 kg/person/year by 2005; 10 kg/person/year by 2010, and an average of 20 kg/person/year by 2020, with exports to foreign markets;

The construction of dairy processing plants must be closely linked to concentrated dairy farming regions so that by 2005, 20% and by 2010, 40% of the demand for milk can be met from domestic dairy herds;

b) Specific Objectives

Strive to increase the total milk production of the industry by an average of 6-7% per year during the period 2001-2005 and 5-6% per year during the period 2006-2010;

The growth rates of specific products are as follows:

Projected production volume by 2010 (converted to fresh milk):

3. Master Plan for Dairy Farming Regions

a) Orientation for development

Developing the Vietnamese dairy herd from now until 2010 to replace part of imported raw materials is a crucial and urgent task. Fresh milk production should reach over 140,000 tons by 2005 (replacing about 20% of imported raw materials), reaching over 300,000 tons by 2010, self-sufficient for about 40% of raw materials, and reaching 1 million tons after 2010. By 2020, self-sufficiency for 50% of fresh milk raw materials;

b) Master Plan for Developing the Dairy Herd

The projected dairy herd for 2005 and 2010 is as follows:

Unit: heads

In 2005, 128 milk collection stations are needed, and in 2010, 254 stations are required. The total investment for these collection stations is 152.8 billion VND.

Grassland area in 2005 is 15,600 hectares, and in 2010, it is 30,200 hectares.

4. Master Plan for Developing the Dairy Industry

Compared to the current industry's production capacity of approximately 547.3 million liters per year (converted to processed fresh milk) and the annual increasing demand, it is expected that by 2005, the industry must invest an additional production capacity of 120 million liters, and by 2010, 248 million liters (converted to processed fresh milk).

The development plan for the dairy processing industry is divided into two phases: Phase I from 2001 to 2005 and Phase II from 2006 to 2010. The list of expansion and construction projects is detailed in Appendix 1.

Construction of milk packaging production lines, printing labels, with a capacity to meet 50% of the demand for production capacity: Phase I capacity: 75,000,000 m²/year, Phase II capacity: 150,000,000 m²/year. Investment capital: Phase I: 5 million USD, Phase II: 3 million USD

Summary of investment capital for dairy industry development by 2010

a) Projected sources of investment capital

Projected government budget and state program funding for developing dairy herds is about 10%;

Credit for constructing processing plants and developing concentrated raw material regions: 50%;

Investment from various economic sectors and enterprises: 40%.

b) Regional orientation

Implementing Decision No. 167/2001/QĐ-TTg of the Prime Minister on certain measures and policies for developing dairy cattle farming in Vietnam from 2001 to 2010, industrial facilities must be closely linked to raw material regions. Processing facilities should be located in concentrated dairy farming areas with large-scale operations and significant markets, each facility responsible for a region within a radius of 100-150 km. For regions with smaller dairy herds and limited markets, small processing facilities with a capacity of about 4,000-5,000 tons per year, mainly producing pasteurized milk and yogurt for local consumption and supplying raw milk to larger processing facilities. In regions with potential for soybean cultivation such as the Southwest and Red River Delta, additional soy milk products should be introduced, interspersed with large-scale industrial processing products with established brands.

Article 2. Certain solutions and policies to support the development of the Dairy Industry and raw material regions until 2010:

1. Regarding Market

Enterprises shall register trademarks, designs, and product quality in accordance with regulations. Strengthen propaganda to raise public awareness of the benefits of using milk for health improvement and physical enhancement. Maintain and improve breeds. Implement school milk programs.

Coordinate with the Ministry of Trade and Vietnamese trade commissioners abroad to provide information and promote the expansion of export markets for dairy products.

2. On Investment

a) Regarding production capacity: Continue investment to expand existing factories and build new ones during the period from 2001 to 2005

to increase annual production by an additional 120 million liters and by an additional 228 million liters during the period from 2006 to 2010.

Invest in factories producing packaging materials to ensure self-sufficiency in design, meet rapid changes in product lines, and reduce imports of components that Vietnam can produce domestically.

b) Regarding production distribution: In concentrated dairy cattle farming areas such as Southeastern region, Red River Delta, North Central region, and South Central region, focus investment on large-scale production facilities to utilize local raw materials.

Organize small-scale processing plants with a capacity of 4-5 million liters per year in regions with small, scattered dairy cattle herds in midland and mountainous provinces and some southwestern provinces.

3. On scientific research and technology transfer

Encourage enterprises to research new products, apply new technologies, especially researching the use of domestic raw materials to replace imports.

Enhance the activities of scientific research agencies to establish sustainable links between research and application of science in production and business.

Continue investment and upgrading of research facilities and training to improve research quality from breeding, livestock management techniques, veterinary medicine, feed, and transfer advanced techniques to farmers.

4. On developing dairy cattle farming regions

Establish and develop relationships among farmers, businesses, the state, and scientists based on ensuring the interests and responsibilities of each subject through long-term economic contracts.

Review current land funds, allocate suitable land for guiding farmers to develop pastures for dairy cattle farming.

Create a fund to support the development of raw material regions by allocating 2-5% of the value of imported raw materials for milk production towards production costs.

5. On human resource development

Develop comprehensive programs and plans with strategic vision for training cadres and skilled workers. Support part of the training costs for local training institutions. Combine specialized departments at universities, implement recruitment policies for graduates in relevant fields, send people for training in countries with traditions in milk production.

6. On capital mobilization

Budget funds will be focused on building breeding centers, centers for producing semen, research institutes, and training facilities for inseminators, schools to train human resources for the dairy industry.

Enterprise funds will be focused on developing processing capacity, providing financial support to farmers, building milk collection stations in various areas, and establishing teams to develop raw material sources.

Mobilize all social capital such as credit funds, funds from government programs, bond sales, stock sales, foreign direct investment (FDI), and official development assistance (ODA) for investments in milk processing projects and projects to develop raw material regions.

Article 3. Implementation

1. The Ministry of Industry shall coordinate with the Ministry of Agriculture and Rural Development and People's Committees of provinces and centrally-administered cities to guide the development of the industry according to planning.

2. The Ministry of Agriculture and Rural Development shall be primarily responsible for developing concentrated raw material regions through the agricultural extension system, dairy cow breeds, and dairy cow farming techniques.

3. Ministries: Planning and Investment, Finance, Trade, Science and Technology, Natural Resources and Environment, State Bank of Vietnam, Development Support Fund shall cooperate with the Ministry of Industry within their respective functions to support enterprises and localities in implementing approved planning.

4. People's Committees of provinces and centrally-administered cities shall encourage the development of dairy processing facilities linked to local raw material regions through the industrial promotion fund, agricultural extension services, and local policies. Organize detailed planning and allocation of land for concentrated raw material regions and land for local processing plants.

Article 4. This Decision takes effect fifteen days from the date of publication in the Official Gazette.

Article 5. Ministries, ministerial-level agencies, governmental agencies, People's Committees of provinces and centrally-administered cities, and heads of related agencies and units are responsible for implementing this Decision./.