Aquaculture Magazine

February/March 2016

Vietnam Pangasius Industry Still Facing Difficult Times

By C. Greg Lutz

After one year of implementation of “Decree 36,” most farmers have not escaped the vicious circle of market forces and Pangasius has yet to regain its previous competitive position.

By Greg Lutz*

In an effort to improve conditions for the Pangasius farming industry, the Socialist Republic of Vietnam issued Decree No. 36/2014/ND-CP on April 29, 2014. Among other measures, the decree outlined a number of specific requirements for producers, processors and exporters. Two notable requirements for producers were that “The breeds, feeds, veterinary medicine, bioproducts, microorganisms and chemicals used must be conformable with law,” and “By December 31, 2015, every commercial pangasius farm must obtain the Certificate of Good Aquaculture Practice according to VietGap or an international certificate that is conformable with Vietnam’s law.” The Deputy Chair of Vietnam’s Association of Seafood Exporters recently stated that roughly 50% of farmers have attained compliance with certification requirements.

Pangasius processors were informed under the decree that they would also have to comply with a number of formal requirements, including “Take necessary measures to trace the origins of processed pangasius products” as well as “Apply a quality control system, technical regulations and standards for food safety and hygiene during manufacture and sale of aquaculture products; obtain a certificate of food-safety facility issued by a competent authority” and “Ensure the announced quality of sold pangasius products; carry out inspections and take responsibility for the announced quality; label goods in accordance with law.” And, a number of formal quality requirements for processed Pangasius products included “The ice-glazing ratio (ratio of ice glaze to gross weight) of exported pangasius products must be conformable with regulations of importing countries. In other cases, the ice-glazing ratio must not exceed 10%” and “The amount of water must not exceed 83% of net weight (weight of pangasius fillets after removing the ice glazing).”

Although the measures and requirements outlined in Decree 36 (as it is referred to on the Vietnamese Pangasius Association’s webpage) were intended to turn around a number of problems the industry was facing, the sector has struggled to implement the proposed reforms and still faces a bleak situation for the time being. The Association’s webpage ( discusses several viewpoints regarding the current outlook, portions of which are roughly translated here.

Farmers Depressed

Mr. Nguyen Ngoc Hai, director of the cooperative An Thoi Famous Catfish in the O Mon district of Can Tho, when asked about the catfish industry, was depressed, stating “Do not want to say anymore.” He explained that there have not been any encouraging changes recently. His operatives enthusiastically welcomed many authorities from various sectors to plead their case, but “the result is almost nothing.” Prices are still low, and farmers are increasingly suffering. “Recently, several meetings of the ministries and Parliament invited me to comment, I declined, because I am skeptical,” Hai sighed.

Mr. Ho Huu Tri, a fish farmer in the province of Vinh Long, Ben Tre, Tien Giang recently sent a letter to the Prime Minister and the Ministry of Agriculture and Rural Development (MARD). The letter expressed enthusiasm, but with worries about the effectiveness of Decree 36. According to him, Decree 36 was established to meet the expectations of those farmers who like him, are concerned with the quality of fish being raised, restoring the reputation of fish products, a national strategy for a product like Pangasius which deserves position in the marketplace.

On October 28, MARD had organized a meeting for comments to amend Decree 36, with suggestions to amend the provisions of quality and food safety for processed fish products. One specific concern cited in the letter was: “Regarding the fish, instead of applying on the date 01.01.2016 the requirement for glazing not more than 10%, and water content not exceeding 83%; this is amended to the glazing of 20% and 86% water content, indefinitely. The 86% water content means, for injecting water into the fish fillet (rotary water weight gain) of 40%. Glazing adds another 20%, for a total of 60% for the country’s exports. Thus, the fish exported is only 40%. This is a paradox, to the detriment of farmers like us.”

The letter asks: “MARD regulations for catfish state we must follow VietGAP to ensure quality but for now water added in fish processing makes worse quality fish. Having the water at 60% of export products is fraudulent for consumers… then it may be some time before anyone buys Vietnam catfish?”

Difficult Supply Chain

In An Giang province, according to the National Agricultural Extension Center, the new implementation a vertically integrated supply chain Manufacturing Company Trading Services Thuan An (Tafishco). This is chain has 18 members, including processing plants, farmers, seed producers, food services and veterinary medicine. When establishing the supply chain, Tafishco contracts with the members of the chain. Through implementation, incoming raw fish should be produced through the correct technical processes with no antibiotic residues, ensuring a higher market price. However, there are 8 new members joining, so the numbers are small. Besides, Tafishco admits: “Although there is a contract signed between the farmers with Tafishco it also appears that farmers seek to sell outside of the agreed traders and there is controversy during checks for antibiotic residues in fish products.”

Mr. Nguyen Van Phu (Hoa Khanh hamlet, Vinh Thoi Lai Vung district, Dong Thap province) farms 2.8 hectares of tra and previously worked for the company culture, Hung Vuong, from 2010. According to him, the supply chain link has a benefit for farmers in that they need not worry about the capital, inputs, or outputs which relieves concerns over fish quality assurance standards. However, over the years associated with the business, he also saw that the contract terms are prone to protect the business, not seriously benefit farmers.

Another problem for the sector involves implementation of the catfish inspection program by the USDA’s FSIS over the next several months. According to the lawyer Nguyen Hai (Mayer Brown JSM Company), in the transitional period of 18 months from 1-3-2016 to 30-8-2017, Vietnam can continue to export to the United States with two conditions: Vietnam needs to provide FSIS: (i) the list of establishments that are exporting and look forward to continued exports of fish to the United States and (ii) records showing that Vietnam has current regulations on production and processing of catfish for food. Appropriate records also showing that Vietnam must comply with FDA requirements including HACCP requirements. So, right now, businesses need to quickly coordinate with the Ministry of Agriculture and Rural Development and the Vietnam Seafood Exporters Association (VASEP) to prepare records for submission to FSIS. After the end of the transition period, ie from the date 1-9-2017, if they want to continue exporting to the United States, Vietnam must submit a complete dossier showing that Vietnam has a system for monitoring and inspection of Catfish equivalent to the FSIS system as applied in the US. FSIS will then assess the equivalence through verification documents in place as well as in Vietnam.

C. Greg Lutz, has a PhD in Wildlife and Fisheries Science from the Louisiana State University. His interests include recirculating system technology and population dynamics, quantitative genetics and multivariate analyses and the use of web based technology for result-demonstration methods.

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