Summary of doctoral thesis of Economy: Competitiveness of Vietnam’s agricultural products

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The thesis aims at clarifying the theoretical and practical basis of competitiveness of Vietnam’s agricultural products, on that basis, proposing the views and solutions to improve competitiveness of Vietnam’s agricultural products in the coming time.

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MINISTRY OF NATIONAL DEFENSE POLITICAL ACADEMY guyÔn v¨n quang PHAM QUOC QUYET COMPETITIVENESS OF VIETNAM’S AGRICULTURAL PRODUCTS Specialization: Political Economy Code: 931 01 02 SUMMARY OF DOCTORAL THESIS OF ECONOMY HA NOI - 2021
THE THESIS WAS ACCOMPLISHED AT POLITICAL ACADEMY - MINISTRY OF DEFENSE Supervisors: 1. Assoc. Prof. Dr. Do Huy Ha 2. Doctor Do Van Nhiem Examiner 1: Examiner 2: Examiner 3: The thesis is defended at the Council of thesis evaluation at the Academic level in line with the Decision no: /QĐ - HV3 date month , 2021 by the Director at the Political Academy - Ministry of National Defence. At.....hour.....date ....month.....2021. The thesis can be found at: - National Library - Military Library - Library at Political Academy
THE LIST OF THE THESIS-RELATED PUBLISHED WORKS BY THE AUTHOR 1. Pham Quoc Quyet (2016), "The role of agriculture in ensuring on-the-spot logistics for defensive areas of current provinces and cities", Journal of State Management, No. (241), pp. 96-98. 2. Pham Quoc Quyet (2016), "Improving the competitiveness of Vietnamese agricultural products in integration", Journal of Finance, No. 627, pp. 87-89. 3. Pham Quoc Quyet (2016), Improving competitiveness for Vietnam's agricultural products in the new context of integration, Journal of Economics and Forecasting, No. (06), pp. 38-40. 4. Pham Quoc Quyet (2017), Solutions to improve the competitive efficiency of Vietnam's agricultural products today, Journal of Asia-Pacific Economy, No (489), pp. 93-95. 5. Pham Quoc Quyet (2018), Some solutions to promote export of agricultural products in Vietnam, Journal of Economics and Forecasting, No. (04 + 05), pp. 98-100. 6. Pham Quoc Quyet (2018), "Policy for high-tech agricultural development - research and application in the Central Highlands provinces" (co-author), Proceedings of the National Scientific Workshop "Economic Development - The society in the Central Highlands "for the second time in 2018, Agricultural Publishing House, pp. 453-460. 7. Pham Quoc Quyet (2018), "Improving the innovation capacity of Vietnamese enterprises" (co-author), Proceedings of the National Science Conference "Innovation, improving competitiveness of Vietnamese enterprises”, Da Nang University branch in Kon Tum, Industry and Trade Publishing House, pp. 61-66. 8. Pham Quoc Quyet (2019), "Building a brand "The salvation” for Vietnamese products, Journal of Economics and Forecasting, No. (5), pp. 43- 45.
1 INTRODUCTION 1. Rationale for the study Currently, in the context of international economic integration and trade liberalization, the market for commodity consumption has moved beyond the national border. The problem of international competition of commodity products has become an issue for every country. These countries, on the one hand, call for trade liberalization, on the other hand have policies to protect domestic production, distort international trade, and cause disagreement in the negotiations. These policies aim at enhancing competitiveness of domestically produced goods in the domestic and international market. The most protected and controversial sector is the agricultural one. Vietnam is an agricultural country, where most of its people live in rural areas and are engaged in agricultural production. Therefore, agriculture, rural and peasantry in general; production, export, and raising competitiveness of agricultural products in particular, is always the top priority in our Party and State’s policy. In the socio-economic development strategy for the period 2010 - 2020, our Party has affirmed: “Developing agriculture with large commodity production, high productivity, quality, efficiency, competitiveness, friendly environment, and exports expansion". Over 30 years of innovation, Vietnam's agriculture in general, productivity, quality and competitiveness of agricultural products in particular, has gained vital achievements; from a country lacking food, it now has become one of the leading agricultural exporting countries in the world. Many agricultural products have become the main export commodities of Vietnam, creating a significant source of income for the country's economy, making an important contribution to the success of poverty reduction and improving living standards of farmers, rural development, serving as a stable foundation for the country's socio- economic development. However, besides the achievements, competiveness of some Vietnam’s agricultural products is still low compared to the same kind of agricultural products in the region and around the world. This is shown in the following: the quality has been improved, but is still at a low level, not meeting the increasingly high requirements of the market; production costs remain high compared to inherent advantages; low added value; output is not stable; Export markets are not diversified yet, the market share is still the smallest in developed countries such as the
2 US, EU and Japan; the number of branded products is inadequate, etc. The above shortcomings are also the cause of the paradox "Bad harvest with good prices, good harvest with low prices", causing loss and waste in both material and material terms. The spirit of producers, especially farmers, greatly affects the country’s economic development. In the coming time, Vietnam will continue to integrate into the world economy, Vietnam’s agricultural products will face more fierce competition with agricultural products of other countries in the world, including in the domestic market. The risk of "losing at home" may happen if there are no synchronous solutions to improve competitiveness of agricultural products. Therefore, promoting competitiveness of Vietnam’s agricultural products in the domestic and international markets is an objective element and an urgent requirement in the process of rapid and sustainable economic development now as well as in a long term. It is essential to further conduct related research and clarify the theory and practice, and propose synchronous solutions to promote competitiveness of Vietnam's agricultural products in the coming time. From the aforementioned problems, this thesis author decides to choose the topic entitles "Competitiveness of Vietnam’s agricultural products" as his doctoral thesis. 2. Aims and objectives of the study Aims The thesis aims at clarifying the theoretical and practical basis of competitiveness of Vietnam’s agricultural products, on that basis, proposing the views and solutions to improve competitiveness of Vietnam’s agricultural products in the coming time. Objectives Giving an overview of the studies related to competitiveness of Vietnam’s agricultural products and indicating the scientific gaps that need filling in. Clarifying theoretical basis of competitiveness of Vietnam’s agricultural products, studying the practical experiences of some countries on improving competitiveness of Vietnam’s agricultural products. Analysing the advantages and disadvantages; indicating the causes of the advantages and limitations; pointing out the problems need addressing from the current situation of competitiveness of Vietnam’s agricultural products to serve as the basis for proposing solutions to
3 improve competitiveness of Vietnam’s agricultural products in the coming time. Proposing views and solutions to promoting competitiveness of Vietnam’s agricultural products in the coming time. 3. Object and scope of the study Object: Competitiveness of Vietnam’s agricultural products. Scope In terms of content: The thesis focuses on research on competitiveness of Vietnam’s agricultural products at the national level of Vietnam, in comparison with those of other countries in terms of Political Economy. Agricultural commodities mentioned in the thesis are the products of agriculture in a narrow sense (including cultivation and husbandry, not researching forestry and fishery products). In which, competitiveness of 5 items: rice, coffee, vegetables, pork, meat and poultry eggs is thoroughly analysed. These are 5 products out of 13 national key agricultural products according to Circular 37/2018 of the Ministry of Agriculture and Rural Development, representing items that have been and will have competitive advantages in domestic and international markets. In terms of space: The thesis studies competitiveness of Vietnam’s agricultural products in domestic and international markets (focusing on export markets mainly; competitors are agricultural products. products of the same type of other countries are competing with products of Vietnam in the market). In terms of scope: The thesis is conducted from 2011 to 2019. 4. Theoretical, practical basis and methodology Theoretical basis The thesis is conducted on the basic theoretical basis of Marxism- Leninism; Ho Chi Minh Thought; the line and viewpoints of the Communist Party of Vietnam on commodity economic development, commodity agriculture in a socialist-oriented market economy and international economic integration. Practical basis The thesis is based on the experience of improving competitiveness of agricultural products in a number of countries; the competitive status of Vietnam's agricultural products through published data and documents of relevant ministries, departments, and localities in Vietnam from 2011 to 2019 and the research results of some studies directly related to the thesis.
4 Methodology The thesis is carried out on the basis of the dialectical materialistic methodology of Marxism-Leninism, the thesis uses a combination of research methods of specialized science; in which focus on scientific abstraction method, combining logic and history, analysis - synthesis, statistics - comparison and expert consultancy. Method of scientific abstraction: the thesis does not go thoroughly on the contents and evaluation criteria of competitiveness of all agricultural products, but only focuses on 4 criteria, namely: quality, price, brand name and market share of 5 main commodity groups: rice, coffee, vegetables, pork, meat and poultry eggs. These are the contents and basic evaluation criteria of competitiveness of goods and the representative key products, which will relatively fully reflect the core nature of competitiveness of Vietnam’s agricultural products. This method is applied in chapter 2, mainly in analysing and clarifying central concept of the thesis; identifying factors affecting competitiveness of agricultural products; simultaneously, it is also used to generalize the experiences of enhancing competitiveness of agricultural products in different countries for Vietnam to learn. Method of combining logic and history: This method is used in chapter 2 to build a theoretical framework; used in Chapter 3 to evaluate competitiveness of Vietnam’s agricultural products; use in chapter 4 to concretize views into feasible solutions, appropriate to competitiveness of Vietnam’s agricultural products. Method of analysis - synthesis: This method is used in chapter 1 of the thesis to evaluate, generalize published scientific works, from there draw out problems that the thesis can inherit and develop. . This method, also used in chapters 3 and 4, to analyse the competitive status of Vietnam's agricultural products, draw out problems that need to be addressed, and clarify solutions to improve competitiveness of Vietnam's agricultural products in the coming time. Method of statistical - comparison: This method is mainly used in chapter 3 of the thesis to analyse, synthesize, process collected data and documents, compare data year by year or compare with other countries to demonstrate and clarify the achievements and shortcomings of competitiveness of Vietnam's agricultural products from 2011 to 2019. 5. New contributions of the study The success of the thesis will have the following contributions: Introducing and clarifying the conceptions, the evaluation criteria and the factors affecting competitiveness of Vietnam’s agricultural products, under the perspective of Marxist-Leninist political economy.
5 Analysing and assessing the current status of competitiveness of Vietnam’s agricultural products; identifying the causes and indicating three urgent issues need solving in order to improve competitiveness of Vietnam’s agricultural products in the coming time. Proposing a system of five views and five groups of solutions to promoting competitiveness of Vietnam’s agricultural products in the coming time. 6. Theoretical and practical significance of the study Theoretical significance The thesis contributes to further clarify competitiveness of Vietnam's agricultural products, improves the efficiency of grasping, implementing the Party's lines and guidelines and the State’s policies on promoting commodity agricultural production in general, competitiveness of agricultural commodities in particular. Practical significance The thesis can be used as references for learning, teaching and doing scientific research in some subjects, specializing in political economy, agricultural economics and other related subjects. The thesis can also be references for regions, localities, and managers in charge of producing and trading in agricultural products. 7. Structure of the study The thesis includes: Introduction, 4 chapters (10 sections), conclusions, list of published author's works, references and appendices. Chapter 1 OVERVIEW OF THE THESIS-RELATED RESEARCH SITUATION 1.1. Studies overseas related to the thesis 1.1.1. Studies on competition and competitiveness of the country, the industry, of enterprises and products Typically: Competitive Strategy - Techniques for Analysing Industries and Competitors by Michael E. Porter (1980); Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter (1985); The Competitive Advantage of Nations by Michael E. Porter (1990); “Internationalizing Porter ’ s diamond” by John H. Dunning (1993); Competitiveness in Small Developing Economies: Insights from the Caribbean by Alvin G. Wint (2000); Discussing global competition by Bach Thu Cuong (2002); Competitiveness of firms: review of theory, frameworks and models by Ambastha & Momaya (2004); Measuring competitiveness of Latvian Companies by Arnis Sauka (2014); and Innovative Competitiveness Report - Research Series on the Chinese Dream and China’s Development Path by BRICS (2017).
6 1.1.2. Studies on competitiveness of the agricultural sector and agricultural commodities Typically: International Competitiveness and Agricultural Export of India by S. Sachdev (1993); Agricultural Biotechnology and Global Competitiveness by Paul Piang Siong Teng (2013); Domestic and Export Competitiveness of Major Agricultural Commodities in Andhra Pradesh - a Case Study by A. Siva Sankar and K. Nirmal Ravi Kumar (2014); Impact of Agricultural Modernization, Economic Growth and Industrialization on the International Competitiveness of Agricultural by Weiming Yao (2015); Competitiveness of Tropical Agriculture, A Guide to Competitive Potential with Case Studies by Roger D. Norton (2017); and Competitiveness of Global Agriculture: Policy Lessons for Food Security by Attila Jambor - Suresh Babu (2018). 1.2. Studies in the country related to the thesis 1.2.1. Studies on competition, competitiveness of the country, the industry, enterprises and products Typically: Solutions to effectively promote Vietnam's competitive advantage in the process of integrating into regional and international markets by Market Science Research Institute (2000); Improving competitiveness of our country's economy in the process of international economic integration by Chu Van Cap (2003), National Political Publishing House, Hanoi; Improving competitiveness of Vietnamese enterprises in the current trend of international economic integration by Nguyen Huu Thang (2008), National Political Publishing House, Hanoi; Improving competitiveness of Vietnamese businesses associated with strengthening national defence in our country today by Do Huy Ha (2011), National Political Publishing House - Truth, Hanoi; Competitiveness of Vietnamese enterprises after 5 years joining WTO by Vu Van Phuc (2012), National Political Publishing House - Truth, Hanoi; Improving competitiveness of Vietnamese securities companies by Nguyen Duy Hung (2016); Improving the business environment, enhancing national competitiveness in FTA integration by Pham Thi Hong Yen (2017), Information and Communication Publishing House, Hanoi; Competitiveness of SMEs by Pham Thu Huong (2017), research in Hanoi City, Economic Doctoral Thesis, University of Mining and Geology, Hanoi; Strategic Cost Management (SCM), a tool to improve competitiveness in Vietnamese enterprises by Nguyen Thi Duc Loan (2017); and Journal of Economics and Auditing, No. 6/2017, pp.19-24;
7 1.2.2. Studies on competitiveness of the agricultural sector and agricultural commodities Typical works: Nguyen Tien Manh (1999), Promoting advantages, improving competitiveness of Vietnam's agricultural exports by Nguyen Dinh Long; Agricultural Publishing House, Hanoi; Ministry of Agriculture and Rural Development (2000), Competitiveness of Vietnam's Agriculture Sector: A Preliminary Analysis in the Context of ASEAN and AFTA Integration; Report on TCP / VTE / 8821 Technical Cooperation Project, Hanoi; Researching the main solutions to promote advantages to improve competitiveness and develop agricultural export markets in the coming time by Nguyen Dinh Long (2001); Improving competitiveness of some major Vietnamese export agricultural products in the context of international economic integration by Ngo Thi Tuyet Mai (2007), PhD thesis in economics, National Economics University, Hanoi; Competitiveness of Vietnam's key export agricultural products in terms of trade liberalization by Le Huu Thanh (2009), PhD thesis, Ho Chi Minh National Academy of Politics and Administration, Hanoi; Applying knowledge economy to improve competitiveness of Vietnam's agricultural exports by Nguyen Thu Quynh (2011), Journal of Commercial Science, No. 44, p.p.39-43; Agricultural export advantages of Vietnam after joining WTO by Tran Hoa Phuong (2013), National Political Publishing House, Hanoi; Brand development orientation to improve competitiveness of Vietnam's current agricultural export products by Pham Thanh Cong (2013), Journal of Economic Research, No. 426, pp. 29-35; Vietnam's Economy with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Enhancing competitiveness from agriculture, Business Forum by Vietnam Chamber of Commerce and Industry (2018), Hanoi; 1.3. Overview of the results of the studies published previously and the problems need addressing in the thesis 1.3.1. Overview of the results of the studies published previously By giving an overview of the studies related to competitiveness of agricultural products, some of the following main issues are drawn: Firstly, in terms of theory about competitiveness of Vietnam’s agricultural products. The above studies have mentioned many aspects such as: conception, role of competition, competitiveness of commodity in general, of agricultural products in particular; concepts and
8 characteristics of agricultural products; the need to enhance competitiveness of agricultural products; analysing and clarifying the theory of competition and competitiveness of agricultural products. These serve as important documents for the thesis author to have a thorough understanding about competition, competitiveness, and agricultural commodities. Secondly, in terms of competitiveness of agricultural products. These above-mentioned studies have had general survey and assessment of competitiveness of agricultural products of several countries in the world and in Vietnam. In particular, there are a number of scientific topics and seminars organized by the Ministry of Agriculture and Rural Development, and the Ministry of Industry and Trade, which have evaluated the advantages and limitations of competitiveness of agricultural products of Vietnam. Through that, it helps the graduate student have more materials to analyse, evaluate objectively and comprehensively about competitiveness of Vietnam’s agricultural products in recent years, point out conflicts from the current situation that need to be solved; at the same time serve as the basis for proposing the views and solutions to improve competitiveness of Vietnam’s agricultural products in the coming time. Thirdly, in terms of solutions to improving competitiveness of Vietnam’s agricultural products. Under different approaches, the works have proposed a number of perspectives, directions and solutions to improve the SCT of Vietnam’s agricultural products, to meet the requirements of the process of international economic integration. The views and solutions that the projects give focus on the stage of renovating and perfecting the State's mechanisms and policies; planning concentrated production areas; improve the quality of agricultural products; Branding; market development, etc. Thus, the overview of the published scientific works shows that: with different approaches, the authors have mentioned different aspects and aspects of competition in general, competition of agriculture and agricultural products in particular. However, there has not been any systematic, comprehensive, complete and up-to-date study in terms of economic and political science about competitiveness of Vietnam's agricultural products, especially commodity groups (Rice, coffee, vegetables, pork, meat and eggs). Therefore, the thesis entitles "Competitiveness of Vietnam’s agricultural products" is an independent scientific work, and does not overlap with any studies published previously.
9 1.3.2. The problems raised in the thesis should focus on solving Through an overview of the research situation related to the dissertation topic, it can be seen that although works have achieved certain scientific values, there are still gaps in terms of theory and practice, demanding Thesis questions must answer the following questions: Firstly, how is competitiveness of Vietnam's agricultural products perceived in the perspective of Political Economy? What factors make up competitiveness of Vietnam's agricultural products? Which criteria should be based on to assess competitiveness of Vietnam’s agricultural products? What factors influence competitiveness of Vietnam's agricultural products? What experiences from other countries in the world should Vietnam learn to improve competitiveness of agricultural commodities in the coming years, to meet the requirements of modern and sustainable agricultural development? This is the basic theoretical framework of the thesis, with a very important role, in order to ensure the graduate student can properly implement the purposes and tasks of the thesis. To implement this problem, first of all, the PhD candidate needs to inherit the notions of competition and competitiveness to build the conceptions of competitiveness of Vietnam's agricultural products, under the perspective of Political Economy. In particular, the thesis needs to clarify the evaluation criteria and the factors affecting competitiveness of Vietnam's agricultural products. Simultaneously, the thesis focuses on enhancing competitiveness of agricultural products in some countries around the world, namely: Thailand, Malaysia, Israel, from which to draw the lessons learned for Vietnam to improve competitiveness of agricultural products in the coming time. Secondly, how is competitiveness of Vietnam's agricultural products over the past time? What are the advantages and disadvantages? What are the causes of those advantages and limitations? What issues need to be addressed in the coming time for Vietnam to perform well in enhancing competitiveness of agricultural products? From the theoretical framework built, the thesis will survey and evaluate the competitive status of Vietnam's agricultural products from 2011 - 2019. The process of assessing the current situation does not stop at only making simple statistics, which the thesis will objectively and comprehensively assess, in which 5 main groups of commodities are rice, coffee, vegetables and pork, meat and poultry eggs to prove proof. Accordingly, the objective and subjective causes of the advantages and
10 limitations are identified to improve productivity, quality and competitiveness for agricultural products in particular. Thirdly, in order to improve competitiveness of agricultural commodities in the coming time, what views and solutions should Vietnam take? In order to improve competitiveness of agricultural commodities in the coming time, it is not possible to rely solely on a few solutions of individual nature, but also to have a system of comprehensive and comprehensive solutions. Therefore, on the basis of analysing competitiveness of Vietnam's agricultural products in recent years, the author of the thesis proposes a relatively strict and complete system of perspectives and solutions to improve competitiveness of Vietnam’s agricultural products in the coming time. In which, analysing and clarifying the basis, content, requirements and implementation measures of each solution, close to the characteristics and conditions of Vietnam to improve competitiveness of agricultural products in particular. The proposal and analysis of views and solutions are always based on the Party's viewpoints and the State's policies; Resolutions, decisions, plans, plans and schemes of the Government, relevant ministries, sectors and committees, local governments, especially on the restructuring of the economy in general and the project for agricultural restructuring to increase added value and sustainable development in particular. Conclusion of chapter 1 Chapter 2 THEORY OF COMPETITIVENESS OF VIETNAM’S AGRICULTURE PRODUCTS AND PRACTICAL EXPERIENCE 2.1. Some general issues about agricultural products and competitiveness of Vietnam’s agricultural products 2.1.1. Conception and characteristics of Vietnam’s agricultural products 2.1.1.1. Conception of Vietnam’s agricultural products Conception of goods According to political economics Marxist: "Goods are products of labour that can satisfy a certain human need through exchange of purchase - sale in the market" Conception of agricultural products According to the World Trade Organization (WTO): goods are divided into two main groups: agricultural products and non-agricultural products. Agricultural products defined in the Agricultural Agreement are all products listed from Chapter I to Chapter XXIV (except fish and fish products) and some products of other chapters in the HS code
11 system ( system of harmonization of description and coding of goods). Accordingly, agricultural products include commodities derived from agricultural activities including: (1) Basic agricultural products such as rice, wheat, flour, coffee, pepper, cashew nuts, tea, fresh vegetables, live animals, milk, .. (2) Derivative products such as bread, cooking oil, butter, meat, etc. (3) Products processed from agricultural products such as dairy products, sausages, soft drinks, confectionery, fruit juices, alcohol, beer, cigarettes, raw animal skin, etc. The rest of the code system is considered non-agricultural products. (Industrial Products) The Food and Agriculture Organization of the United Nations (FAO) states that: Agricultural products are a collection of many different commodity groups, including: (1) Group of tropical products such as tea, coffee, and coffee. high, pepper ...; (2) Group of cereals such as rice, flour, cassava, corn ..; (3) Group of meat products and meat products such as pork, beef, poultry ...; (4) Group of oil products and oil products processed from oily seeds such as peanuts, soybeans, sunflowers, etc., and vegetable oils; (5) Group of dairy products such as cheese, butter, dairy products, ..; (6) Group of agricultural raw materials such as natural rubber, cotton, jute, fibre, ..; (7) Group of vegetables and fruits includes vegetables, old and fruit. In the provisions of Clause 7, Article 3 of the Decree on mechanisms and policies to encourage enterprises to invest in the agricultural and rural sectors, agricultural products are defined as: “Agricultural products are products of the agricultural sectors, forestry, fisheries, and salt production”. In this thesis, "Agricultural products" are seen as the products of the group of agricultural products (not researching forestry and fishery products), i.e. researching agricultural products, not Research on products of the forestry sector, fisheries and salt production. Thus, form the aforementioned conceptions, it can be concluded that: Agricultural products are the products of the agricultural sector, which can satisfy certain human needs and be given to exchange, buy and sell on the market. Conception of Vietnam’s agricultural products From the above conception of agricultural products and commodities, it is stated that: Vietnam's agricultural products are the products of Vietnam's agricultural industry, which can satisfy certain human needs and exchange, buy and sell on the market.
12 On that basis, Vietnamese agricultural products are a relatively broad and complex concept, including products that are directly harvested (fresh, raw) and processed products of the agricultural sector (including farming and breeding). With the research scope of the thesis, the author only focuses on researching 5 key products (out of 13 key agricultural products of the country, according to Circular 37/2018 / TT - BNNPTNT), which are rice, coffee, vegetables, pork, meat and poultry eggs for analysis and demonstration. These are products that have been and will have a competitive advantage over similar products of other countries in the domestic and international markets. 2.1.1.2. Characteristics of Vietnam’s agricultural products Firstly, agricultural products are seasonal and depend on natural conditions. Secondly, agricultural products are fresh. Thirdly, agricultural products are regional and diverse. Fourthly, quality of agricultural goods directly affects consumers’ health. 2.1.2. Conception of competitiveness of Vietnam’s agricultural products 2.1.2.1. Conception of economic competition "Competition" is a term used for a long time and has become popular until today; the term "competition" is used in all fields of social life such as politics, economics, culture, military, etc. The issue of competition has been studied and presented by many authors under many different angles: Adam Smith said that "competition is a behaviour that always exists in people, in society, especially special in things related to one's self-interest. A free environment gives individuals the right to compete in the production and exchange of goods and services. Furthermore, competition will lead to a thriving and self-regulating economy. According to Mark: competition is a competition between those who produce and circulate goods by different forms and tricks, in order to win themselves the most profitable production and business conditions, the driving force of competition is maximum profit. According to the Vietnamese Encyclopaedia, competition is: “Competition activity between commodity producers, traders and traders in a market economy, is governed by the relationship between supply and demand in order to win the most profitable production, consumption and market conditions". On that basis, it can be defined that: Economic competition is a competitive activity between economic actors in the market, by different forms and measures to win at the most profitable production and business conditions, in order to maximize profits, ensure its subject’s survival and long-term development.
13 This conception has indicated the source of economic competition is associated with the creation and existence of commodity production, which is directly the economic independence of economic actors. The essence of competition is to reflect the economic relationships between economic actors towards the same goal of ensuring their existence and development. From the different angles of consideration, competition is classified differently: From the perspective of the competition, there is competition between sellers and buyers, competition between sellers or between buyers and buyers. together; on the basis of economic objectives with: competition between branches and competition within the industry; In the perspective, competition has: competition for monopoly, acquiring inputs, or dominating the output market, etc.; In terms of methods or tools of competition has: competition by quality, price, uniqueness, differences of products, accompanying services, competition by the speed of product and competition by both economic and non-economic measure; on the basis of market structure: perfect competition and imperfect competition; in terms of behavioural nature: healthy, unfair and territorial competition with domestic and international competition. 2.1.2.2. Conception of competitiveness of goods Competitiveness Competition is associated with the behaviour of business entities, including individual, corporate and national behaviour. In order to gain advantages on their side in the process of competing with each other, subjects must implement a combination of internal and external force measures to maintain and develop their position in the market. These measures show strength of the subject and are called competitiveness or competitiveness of the subject. Accordingly, it is defined that competitiveness is the manifestation of the capabilities and advantages of production and business entities compared to competitors in best satisfying customers’ needs to get more profits. At present, studies often refer to three levels of competitiveness: competitiveness of the economy (national competitiveness), competitiveness of businesses and competitiveness of products: National competitiveness National competitiveness can be understood as: building a common economic environment, ensuring efficient distribution of resources, achieving and maintaining high and sustainable growth. Competitiveness of business Competitiveness of business is its strength and strength compared to its competitors in the market in providing products and services that
14 meet customers' solvency needs, thereby gaining certain market share and corresponding profit. Competitiveness of products According to C. Mark: A product is considered competitive when it meets the needs of customers in terms of quality, price, features, design, packaging, brand, uniqueness compared to the product of the same type on the market. From the above analysis, it is defined: Competitiveness of goods is the ability to meet customers' needs in terms of quality, price, features, designs, packages, brands, and uniqueness of the same goods as compared to that on the market. Product competitiveness is competitiveness of products of the same type, internal competition. Production entities must regularly carry out technical measures to improve labour productivity to make the particular value of their goods lower than the social value of such goods in the market. To evaluate competitiveness of goods, people often rely on key criteria such as quality, price, market share, brand, etc. 2.1.2.3. Conception of competitiveness of Vietnam’s agricultural products From the perspective of competitiveness of goods and conception of Vietnam’s agricultural products, it is concluded that: Competitiveness of Vietnam’s agricultural products is the ability to meet customers' demand for quality, prices, features, designs, packages, brands, and uniqueness of products made from Vietnam's agricultural industry compared to those of other countries in the market. Thus, from perceptions can be seen, competitiveness of agricultural products is the level or ability to meet the needs of customers for: quality; price; design, features or convenience in use; the accompanying customer care policy and the environmental friendliness of agricultural products. The subjects making up competitiveness of Vietnam’s agricultural products is the state, enterprises, agricultural cooperatives and farmer households, in which the direct subject is enterprises producing and trading agricultural products. The measure to create competitiveness is to constantly improve product quality, lower costs, and strengthen marketing activities (marketing). Competitors are foreign entities that supply the same products on the Vietnamese and international markets. The purpose of creating and constantly improving competitiveness is to dominate the market share, consume many agricultural products, and get more profit for the subjects involved.
15 2.2. Evaluation criteria and factors affecting competitiveness of Vietnam’s agricultural products 2.2.1. Criteria for assessing competitiveness of Vietnam’s agricultural products In order to evaluate competitiveness of Vietnam’s agricultural products in the market, people base on many different criteria based on its two attributes, value of use and value. This thesis analyses and clarifies four basic criteria, namely: quality, price, market share and brand. 2.2.1.1. Quality of agricultural products According to the International Organization for Standardization (ISO): quality is the ability of the set of characteristics of a product, system or process to meet the requirements of customers and interested parties. Quality is considered the most important factor showing competitiveness of products. Consumers are more and more likely to choose products with higher quality than cheap goods in the market. Therefore, product quality is the most important factor to gain the competition in the market. Agricultural goods are the products used by humans for food, food and beverages, directly affecting human health, so quality assurance is a very important agricultural chemistry. The quality of agricultural goods is the characteristics of the product, such as: quality, sensory value, physical and chemical characteristics in accordance with national and international standards and regulations. The quality of Vietnam’s agricultural products is shown first and foremost that the product must meet the criteria in the national and international quality standards; In addition, products manufactured according to processes and quality standards will be granted certificates such as: certification of Vietnamese Good Agricultural Practice (Viet GAP), and Global Good Agricultural Practice (GlobalGAP), certification of food safety (HACCP), organic products (Organic), products protected by trademarks, geographical indications, traceability, etc. Currently, on developed countries’ markets, product quality is also associated with the factors of ensuring food hygiene and safety, environmental friendliness, legal use of labour and sustainable development. 2.2.1.2. Price of agricultural products Price of agricultural goods is a monetary expression of the value of agricultural goods, and at the same time it shows many other relationships in the economy. For a buyer, price is the amount they have to pay the seller to receive a certain quantity of agricultural products. For sellers, price is the share of income or revenue that they receive when
16 consuming a certain unit or quantity of agricultural product. Competitive price means to lower the selling price of the product while ensuring the quality of the product and the profit, forcing the producer to find ways to reduce production costs such as: fully exploiting the advantage over comparison of regions, countries; crossbreeding and breeding for high productivity; apply advanced technology to production; and improve labour skills. 2.2.1.3. Market share of agricultural products Market share is defined as the market share of products that the enterprise dominates; the market share is calculated by the number of products sold by the enterprise over the total products sold in the market or by the sales revenue of total market turnover for that product. Each agricultural product has its own market area with a certain number of customers. When agricultural goods ensure the internal factors such as: better quality, lower prices, ensuring food hygiene and safety and external factors such as: business opportunities appearance, favourable sales promotion, strong brand products, diversified distribution channels will increase competitiveness of the product and expand the market, gain market share from competitors. 2.2.1.4. Trademarks of agricultural products Trademarks of agricultural goods are the combination of properties of the goods such as their use value, value, design and services. Brand is not only a sign that identifies and distinguishes one supplier's products from that of another, but it is also a very valuable intangible asset of the supplier, reputable and shows consumer confidence in suppliers and products. 2.2.2. Factors affecting competitiveness of Vietnam’s agricultural products Because agricultural products have distinct characteristics compared to other conventional goods, especially dependence on natural conditions and freshness. Therefore, competitiveness of agricultural products is influenced by many different factors. In this thesis, the author focuses on analysing a number of objective and subjective factors that have a major influence as follows: 2.2.2.1. Group of objective factors Firstly, natural resources: (Including: geographical location; land, soil, water resources; weather, climate). Secondly, international economic integration and trade liberalization Advantages: creating opportunities for Vietnam to learn from experience and receive investment resources; enjoy tariff benefits when
17 countries fulfil their commitments to reduce tariffs in trade agreements; expanding and diversifying consumption markets; creating pressure for production and business entities to always make efforts to improve techniques, rationalize production, improve productivity, product quality, reduce costs, ... to improve competitiveness for my product. Difficulties: Vietnam’s agricultural products will face more fierce competition in domestic and international markets, especially for countries with developed agriculture such as the US, EU, Japan,…; countries strengthen trade protection measures, impose high import taxes, set up "barriers" on technical standards, quality, food safety and hygiene, and labour use, in terms of environmental protection, origin ..., this makes the market distorted, competitiveness of agricultural products decreases. 2.2.2.2. Group of subjective factors Firstly, the State’s mechanisms and policies. Correct and appropriate mechanisms and policies will create conditions for the rapid development of production and consumption of agricultural products; On the contrary, the inappropriate policy will create a great hindrance to the development of production and consumption of agricultural goods. Secondly, the level of science and technology. Quality and price are the two main factors that make up competitiveness of agricultural products. These two factors depend greatly on the level of science and technology to produce and process it. Therefore, science and technology are factors that affect and decide competitiveness of agricultural products Thirdly, the quality of agricultural labour. Being a creative subject in the production workforce, the agricultural workforce is constantly innovating, selecting and effectively combining resources to create agricultural products to meet their own needs and for the whole of society; Therefore, the scale, growth rate of agriculture in general, productivity, quality, competitiveness of agricultural products in particular, are directly affected by agricultural labour quality. Fourthly, infrastructure for the production and circulation of agricultural products. The quality and price of agricultural goods are influenced greatly by infrastructure for production, processing, storage and transportation. Therefore, in order to improve quality, lower costs and increase competitiveness for agricultural products, we need to pay attention to investing in developing modern and synchronous infrastructure.