The Asian Development Bank and Vietnamese government are poised to invest US$55m in Vietnam’s agriculture sector over the next five years to boost the country’s fresh produce output.

Bank and government officials met last week to discuss how best to structure and implement the ambitious Vietnam Quality and Safety Improvement of Agricultural Products project, and are expected to reach a final decision by September.

The lion’s share (around 70 per cent) of the total investment is earmarked for improving agro-production facilities – a key component of the proposed three-point plan, which is scheduled to get underway by the end of the year.

Some US$39m will be used to establish retail rural farm shops, pack-house facilities supplying produce to the wholesale markets for domestic and export supplies, and infrastructural improvements on existing wholesale markets – mainly in Hanoi and Ho Chi Minh City. It may also be spent on improving existing services and facilities, such as sorting, grading, packing and washing facilities, as well as a cold-storage complex in Da Nang.

The rest of the money (US$16m) will be allotted to the regulation and institution development of food safety and quality standards in line with international food standards; and project management - local and central government supporting agri-business and market chain development.

'The Quality and Safety Improvement of Agricultural Products is the most ambitious project undertaken in Vietnam,” says World Union of Wholesale Market (WUWM) member Mike Burchell of Burchell Consulting Ltd, a project post harvest operation and wholesale market specialist. “It’s not only dealing with food quality issues but, more importantly, also with food safety - introducing Safe Agricultural Zones in 14 provinces throughout Vietnam, all endorsed with VIETGAP (a standard copied from EUROGAP).

“The proposals include strengthening links between the producer and consumer by proposed developments in market infrastructure, and identifying proposals to improve services and facilities on existing wholesale markets by promoting import substitution and export trade opportunities for fresh fruit and vegetable products,” he adds.

The Ministry of Agriculture and the Asian Development Bank are expected to split the total cost of the project 20 per cent and 80 per cent, respectively.

“It is expected that final approval will be made by the Government of Vietnam in September,” says Mr Burchell. “Activities and market infrastructure improvements, once agreed, will commence by the end of 2008 over a five year period.”

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