Despite achieving annual export earnings of US$25 billion, most of Vietnamese farm products are coarsely processed and sold at low prices.

The processing industry is a key sector that needs more investment, especially in the private sector, to increase the value of agricultural products. With as many as 1,500,000 hectares left for growing fruit and vegetables, Vietnam must have been a strong producer and exporter of fruit and vegetables. However, it annually earns only US$500-600 million in export turnover

The country now has 60 State-owned fruit and vegetables processing plants and smaller private-owned establishments using outdated technologies.

According to the Department of Agro-Forestry-Fishery Product Processing and Salt Industry, the total capacity for fruit and vegetables processing and packaging is just 300,000 tons per year since the application of processing technology is not the same in different regions.

The Head of the Planning Department under the MARD, Trang Hieu Dung, says the agricultural sector will focus on improving the post-harvest processing process to raise the added value of farm products in the near future.

The coffee sector is expected to increase the proportion of processed coffee from 20 percent in 2010 to 40 percent by 2015 and to 70 percent by 2020. The sector will also raise the capacity for instant coffee processing from 10,000 tons (1 percent) to 25,000 tonnes (2.5 percent) by 2015 and to 50,000 (5 percent) by 2020 and roasted and ground coffee from 10 percent by 2015 to 20 percent by 2020.

The added value of rice exports is expected to rise 15 percent by 2015 and 25 percent by 2020.

The MARD aims to renew processing technologies to boost rubber exports. It has set a target of raising the capacity for rubber latex processing by 500,000 tons by 2020.

The ministry will also prime the pump in the pepper industry to upgrade at least 14 processing plants to improve product quality and safety. The capacity for white pepper and powdered pepper processing will rise 30 percent and 25 percent respectively by 2020.

The fruit and vegetables sector will focus on increasing the capacity and operational efficiency of plants processing high-quality products such as frozen, canned and fried fruit and vegetables, natural condensed juices.

The processing sector which accounts for 85 percent of the total seafood export volume is expected to make a breakthrough in export business by increasing the proportion of instant products to replace coarsely processed products.

The sector will invest more in renewing technology and abide by international production standards such as ISO and hazard analysis and critical control points (HACCP) to raise the added value of export products to 70 percent by 2020.

For the forestry sector, the ministry will re-organise the wood processing industry to balance the production capacity and material supplying sources.

In addition, more industrial parks will be built to help raise the total wood processing capacity to 6 million m3/year.

(VOV)