The Role of Agricultural Exports in Socio-Economic Development

(relative and absolute) and competitive advantage have a relationship and create a premise for each other in the process of using and promoting advantage factors. Regarding the advantages (relative and absolute), it is mainly due to the available potential of the country in terms of natural resources such as: land, climate, weather - ecological conditions, labor, geographical location and technological level... creating differences in relative labor productivity and productivity of input factors in production of countries. But not all comparative advantages become competitive advantages and it does not mean that all competitive advantages are comparative advantages, although there is a very close relationship with each other, for example: having good and favorable land and climate conditions will create products with high quality and low cost, so from the above favorable factors, it is easy to become highly competitive advantages in terms of quality and consumption price in the market. Having a low production cost is of course a competitive advantage. However, this advantage only becomes a competitive advantage when the producer directly or indirectly regenerates profits into competitive advantages such as: delivery, price, quality, advertising, etc. Of course, the low cost advantage is very important and decisive, but it is only a premise of competitive advantage. To exploit competitive factors such as: quality, price, design, reputation, convenience in transactions, etc. into a highly competitive advantage, many factors must converge.

Thus, comparative advantage and competitive advantage do not imply each other, but are not opposed to each other, but have an interaction that is both a premise and a condition for each other to develop. From the above issues, in terms of competitive advantage, it is not easy for Vietnam to compete firmly and win in the market at once. Because in order to transform and achieve competitive advantage, the following conditions are required:

- There must be a competitive macroeconomic environment and a favorable trade environment for investors, in which the Government plays a key role.

The key role is to create an environment, pave the way and support the business sector to penetrate and improve competitiveness in the world market.

- There must be a dynamic and effective micro-business environment, operating in a competitive environment, in which businessmen play a key role, requiring high management capacity, both entrepreneurial spirit and a sense of social responsibility [30].

In summary, the theories presented by the author above all have their own strengths and limitations. However, fundamentally, applying trade theories to building strategies to promote the export of goods in general and strategies to promote the export of agricultural products in Vietnam in particular must be based on these theories to build development strategies for each specific field, industry, and agricultural product. Thereby, there can be appropriate mechanisms and policies, adequate investment to promote the export of agricultural products in which Vietnam has a competitive advantage compared to countries with the same type of agricultural products exported in the region and the world, as well as limit or discourage investment in agricultural products in which Vietnam has difficulty competing with other countries.

1.2. THE ROLE OF AGRICULTURAL PRODUCT EXPORT IN SOCIO-ECONOMIC DEVELOPMENT

1.2.1. The role of agricultural product exports in socio-economic development

1.2.1.1. Concept of agricultural commodities

According to the United States Department of Agriculture, agricultural products include products ranging from unprocessed commodities such as soybeans, cereals, wheat, rice, and raw cotton to high-value processed foods and beverages such as sausages, cakes, beer, wine, and condiments sold in retail stores and restaurants. According to the Food and Agriculture Organization (FAO), agricultural products/products of agricultural origin are any products or commodities, whether raw or processed, that are

processed, marketed for human consumption (excluding water, salt and additives) or animal feed.

According to the definition of the Agreement on Preferential Tariff Scheme for the ASEAN Free Trade Area (AFTA), agricultural products mean: Raw agricultural materials/unprocessed products listed in Chapters 1 to 24 of the Harmonized System (HS) and similar raw agricultural materials/unprocessed products listed in the headings of the Harmonized System; and products that have undergone minor processing but the form has not changed significantly from the original product.

Thus, the concept of agricultural products can be understood in general as follows: agricultural products or agricultural products are products provided by the agricultural sector. Agricultural products are agricultural products produced from agriculture and brought to the market for consumption.

1.2.1.2. National economic development strategy

The policy to promote agricultural exports is an organic part of the overall economic policies. Like other economic policies, the policy to promote agricultural exports must aim to achieve the goals of the national economic development strategy. The export-oriented strategy has three levels: export of raw and semi-processed goods (agricultural products, minerals), primary export based on unskilled labor and export diversification. Vietnam's current economic development strategy is to combine the primary export strategy with the import substitution strategy. In that combination, there are interweaving of different levels of these two strategies. For example, Vietnam's export-oriented strategy includes both export of raw and semi-processed goods (such as agricultural products, minerals), export based on unskilled labor (not requiring high expertise) such as export of leather shoes, textiles, deeply processed agricultural products and export of high-tech goods such as televisions, computers, etc. Of which, primary goods export accounts for a higher proportion than high-tech goods export. This proportion will gradually decrease with the increasing development of

industrialization and modernization of the economy. The policy to promote the export of Vietnamese agricultural products is built to implement that development strategy [25].

1.2.1.3. The role of agricultural exports in socio-economic development

Agriculture and agricultural products play an extremely important role in the national economy of each country, whether it is a developed or developing economy. That role is demonstrated in the following specific aspects:

a. Exporting agricultural products to earn foreign currency to import modern technology for industrialization and modernization

Vietnam is a backward agricultural country, with poor technical infrastructure, slow agricultural production development and dependence on nature, and many potentials have not been properly exploited. The development of our country's economy is operated according to the market mechanism. Therefore, promoting exports, developing foreign trade, expanding economic and scientific and technological cooperation with other countries to increase import and export turnover is necessary in the current period. The direction to promote our country's exports in the coming time is to effectively exploit the potential of resources, labor and land, and improve the structure of export goods to suit the consumer tastes of each market. To do so, it is necessary to promote agricultural production, reasonably shift the structure of the agricultural and rural economy to create a source of high-quality agricultural products, with diverse types and designs of goods. Only then can we provide a stable and solid source of agricultural products for export, increase foreign currency revenue, increase the country's accumulation level, and serve well the cause of industrialization and modernization of the country.

In 2008, despite the complicated fluctuations in the world economy, Vietnam still achieved high export turnover, with total export turnover of goods and services estimated at 62.9 billion USD, an increase of 29.5% compared to 2007.

In which the foreign-invested sector increased by 25.7% and the domestic economic sector increased by 34.7%. Among the 10 products with the largest export turnover in 2008, the agricultural, forestry and fishery sector contributed 5 products: aquatic products (reaching 4.436 billion USD), rice (reaching 2.758 billion USD), rubber (reaching 1.675 billion USD), coffee (2.116 billion USD), wood and wood products (reaching 2.764 billion USD)...[16] [38].

Vietnam's export results are still modest compared to many countries in the region, but they are very meaningful for our country in promoting all domestic resources, increasing national accumulation, creating more investment capital for technological innovation and increasing jobs for the agricultural workforce, and having a positive impact on the agricultural sector.

It can be said that foreign currency revenue from Vietnam's goods export activities is the main source of capital for our country to import technology and machinery to serve the cause of industrialization and modernization of the country. On the other hand, boosting exports also has the meaning of setting aside a sum of foreign currency to pay off foreign loans that are due, creating more prestige for new loans.

b. Agricultural exports promote the process of restructuring the agricultural economy.

The structure of the agricultural and rural economy has changed positively, shifting towards gradually reducing the proportion of agricultural production value and increasing the value of industrial and service production. The proportion of agriculture, forestry and fishery in GDP has gradually decreased from 27.2% in 1995 to 21.9% in 2008.

[16] [38]. In essence, the shift in agricultural structure in recent years is a shift in production in a broad sense from the method of rice monoculture, self-sufficiency in food, small-scale dispersion with low efficiency to a multi-cropping economy, oriented towards large-scale concentrated production, high socio-economic efficiency, and sustainable ecological environment. This trend is increasingly demonstrating its superiority compared to the old model of previously taking food production as the goal, self-sufficiency in food production, and self-sufficiency in food production.

Food security at all costs, taking the goal of increasing rice productivity and output as the goal of the whole country, each locality and each facility.

The structure of crop acreage has changed positively towards improving economic efficiency, especially crops for export. Exported agricultural products have established a foothold in the international market. Many agricultural products have taken the leading position in the world such as rice, coffee, pepper, rubber, etc. The proportion of exported agricultural products accounts for about 30-35% of the total volume of agricultural products. Promoting the export of agricultural products has had a positive impact on agricultural production. This is consistent with the requirement of shifting the economic structure towards industrialization and modernization .

Table 1.1: Vietnam's economic structure from 1995-2008

Percentage % compared to last year

Year

Agriculture, forestry and seafood	Industry and build	Service
1995	27.2	28.7	44.1
1996	27.8	29.7	42.5
1997	25.8	32.1	42.1
1998	25.8	32.5	41.7
1999	25.4	34.5	40.1
2000	24.3	36.6	39.1
2001	23.3	38.1	38.6
2002	23	38.5	38.5
2003	22.5	39.5	38
2004	21.8	40.2	38
2005	20.9	41	38.1
2006	20.4	41.5	38.1
2007	20.3	41.58	38.12
2008	21.99	39.91	38.10

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Source: General Statistics Office, Ministry of Planning and Investment, Ministry of Agriculture and Rural Development [42] [2]

[16][39].

c. Value of agricultural products in gross domestic product (GDP)

Implementing the policy of economic innovation, economic development according to the market mechanism under the management of the State, opening up and integrating with countries in the region and the world, our country's economy has had a clear economic growth in 3 areas: agriculture, forestry and fishery; industry, construction; services. Specific manifestations are as follows: in the period of 1996-2000, the average GDP of the whole country reached 6.9%, in the period of 2001-2005 it reached 7.5%, in 2006, 2007 and 2008 it reached 8.2%, 8.48% and 6.23% respectively [40] [41] [2]

[16] [38] . In particular, the agricultural sector is a sector that develops with a high and stable growth rate, with many export products in large volumes such as: rice, coffee, rubber, cashew, tea, pork, seafood, etc.

The growth rate of agricultural production in our country in the period 1996-2000 reached an average of 5.7%/year, in the period 2001-2005 the average in 5 years was 5.4%. The growth rate was strong in both fields: cultivation and animal husbandry. The crop production sector has gradually shifted to commodity production, linked to the market, improving product quality and value. In the period 1996-2000, the average production value growth rate reached 5.8%/year, while in the period 2001-2005, although the food cultivation area decreased by about 220 thousand hectares due to structural change, but due to increased productivity and quality, the average production value growth rate reached 7.2%/year, while farm animal husbandry developed in an industrial direction with an average production value growth rate of 6.1%/year [3] [40] [41] [2] .

Along with the increase in the growth rate of output value, the proportion of agricultural product value in the total GDP of the country has also changed in the direction of constantly increasing output value and decreasing the proportion of the sector in the national economy. In 2008, GDP in the agricultural, forestry and fishery sector at 1994 comparable prices reached 85,564 billion VND, an increase of 3.79% compared to 2007 [16] [38].

Table 1.2: Vietnam's GDP growth rate

Percentage % compared to last year

Year

Nationwide	Divide
Nationwide	Agriculture, forestry and seafood	Industry and construction	Service
1995	9.5	4.8	13.6	9.8
1996	9.3	4.4	14.5	8.8
1997	8.2	4.3	12.6	7.1
1998	5.8	3.5	8.3	5.1
1999	4.8	5.2	7.7	2.3
2000	6.7	4.0	10.0	5.6
2001	6.89	3.0	10.4	6.1
2002	7.08	4.2	9.5	6.5
2003	7.34	3.6	10.5	6.5
2004	7.79	4.4	10.2	7.3
2005	8.4	4.0	10.6	8.5
2006	8.2	3.4	10.4	8.3
2007	8.48	3.41	10.6	8.68
2008	6.23	3.79	6.33	7.2