Sustainable development in agriculture is a necessity today not only to achieve global food security through judicious use of depleting natural resources. It is also the primary pathway to reduce poverty and enhance the livelihoods for rural households totalling 2.5 billion people
. Globally, public and private sector organisations are identifying and implementing strategies, policies, and technologies that aim to achieve sustainability across agriculture, fisheries, and forestry. An integrated approach, which considers the diverse social, economic, and environmental factors that pose a challenge today, is imperative to the efficacy of action on the ground. Read on to discover why long-term sustainable development strategies are crucial for our long-term survival and the role of digital solutions in ensuring the adoption of these practices in food and agriculture systems.
In Conversation With
Quynh Nguyen Khanh
Quynh Nguyen Khanh is the Chief Executive Officer of PAN Farm and the Chairman of PAN-HULIC. Following a decade-long stint at SSI Asset Management covering its investments in agriculture businesses, Mr. Quynh began his career in The PAN Group as its Investment Director. Mr. Quynh has also served in the Board of Supervisory of Vinaseed (Vietnam National Seed Group), as a Board of Director of Quang Nam Seed and the Supervisory Board of Southern Seed (SSC, 2015-2018), two subsidiaries of Vinaseed.
Mr. Quynh was born and raised in a rural area and worked on farms until he turned 18 years old when he got accepted into university. He then sought a job in the urban area and never considered returning to his village to do farm work. His educational and early professional background is in the field of economics and finance. He graduated from Hanoi Foreign Trade University, earned an MBA degree in finance from Ritsumeikan Asian Pacific University (Japan), and became a charterholder from CFA Institute, USA. Early in his career, he held the positions of a banker, an export-import dealer and procurement dealer, and an investment job professional following his MBA.
Although a career in the agriculture sector did not interest Mr. Quynh initially, the path he chose eventually led him here. His foray into the agriculture sector was largely due to The PAN Group’s strong focus on investments in the sector. His very first proposal was to invest in Vinaseed, a manufacturer of crop seeds. He recalls that as a beginner, he did not understand anything about agriculture. Over the years, his hard work and genuine interest helped him to better understand the company’s business model, competitive landscape, and the sector at large. His involvement in mergers and acquisitions within the sector also played an important role in his professional growth.
Sustainable development is an integral part of PAN Group’s long-term development strategy. The Group partners with several organisations that promote and uphold sustainable development and its efforts have received recognition by many prestigious awards. Our hearty congratulations for the same! Could you tell us about the Group’s focus on sustainable development strategy and its importance to its stakeholders?
Quynh Nguyen Khanh:
The agriculture sector faces several challenges, including the effects of climate change, shortage of labour, fragile economy and modest incomes, the deterioration of the soil quality, the fragmentation of farmlands, etc. We perceive that if we continue with the existing agricultural practices that are harmful to the environment, we threaten our health and safety. We need to seek long-term development for our survival, for which we need sustainable development practices. This belief became the starting point for us to invest in agriculture and make sustainable development paramount in our company’s strategy. Instead of acquiring and consolidating farmlands in an unsustainable way, we engage in contract farming to ensure we don’t drive them away from their own land. Further, we encourage them to adopt a more sustainable way of farming so that we can ensure superior output in every aspect. The second factor that strengthens our focus on sustainability is that we want to position ourselves as a global player, so we need to comply with international standards. Notably, our investors include organisations like IFC. Their equity investment represents about 10% of PAN Farm JSC’s share capital
in addition to the earlier investment ( about 5% of the share capital
) in The PAN Group. As a key stakeholder, they greatly influence our development strategies, particularly regarding sustainable development. They uphold very rigorous standards in sustainability and define several regulations and conditions for how to farm in a sustainable way, which navigates our direction into more sustainable development. Lastly, we realise that sustainable development is not only something we want to do but it is a trend that we cannot overlook. It is currently the priority everywhere in the world. The agroecosystem is moving away from harmful traditional practices to emphasise on long term benefits instead of the short term ones.
Information transparency in end-to-end traceability is today the norm for the agri-food supply chain to instil consumer’s confidence in the brand. How does The PAN Group leverage technology, or plan to in the future, to ensure the supply of high-quality, traceable agricultural products? What have been the benefits of traceability for both the producers and the brand?
Quynh Nguyen Khanh:
Traceability is becoming increasingly important; more like a compulsory requirement from our customers in Japan, the United States and, lately, Europe, especially. This urges us to manage our supply chain better, although there are not enough digital platforms that can monitor the entire supply chain, from farm to table. Currently, we have implemented traceability effectively for aquaculture alone. We export pangasius and shrimp to the markets I mentioned earlier, and these customers demand the highest quality. Shrimps and pangasius ponds need to be carefully managed in-house to ensure quality, and enable traceability for the customers. We monitor the whole supply chain as well. Every year, setting aside the years of pandemic, a team comes down to perform an external audit of the entire process. Currently, all our records are maintained manually and very low tech. We know it is not efficient, but we deal with people in agriculture who are not very tech savvy. And, this is what works best with them. For our crops like rice, coffee, and cashew, a part of our output can be traced back because of our traceability platform that records the information from farmers, which is then made available through a QR code. When we include this QR code on our product labels, customers can trace it back to the origin. For instance, the European market monitors food safety through the Foundation Food Safety System Certification (FFSC) 22000
, which is a very rigorous standard. The Vinarice factory achieved the FSSC 22000 Certification in 2020, but we are yet to expand it to other crops.
Speaking of certifications and their role in food safety and quality assurance, especially when exporting to global markets, how do you believe digital solutions ensure that sustainable practices are being followed and the optimum quality is met throughout the production process?
Quynh Nguyen Khanh:
We have adopted rigorous standards, particularly for shrimp export, that requires the World Bank Group / IFC’s EHS Guidelines
specifically related to the aquaculture business. Our flower production, on the other hand, is GLOBALG.A.P. certified. GLOBALG.A.P. requires us to record the information and systematically monitor the practice so that they can do an audit any time they want, but they don't require us to use a digital platform for the same. Digital platforms are an inevitable trend to facilitate the whole process. As I pointed out before, we are still using manual methods that are very time-consuming and do not always offer the correct information. We are eager to adopt a digital solution that will solve our challenges in this aspect.
Vietnam is one of the oldest rice civilizations globally, and the crop accounts for 82% of the total cultivated land. With several agrarian economies adopting digital technologies, especially during the pandemic, how prevalent is digital agriculture in Vietnam considering that rice producers in the country largely follow traditional agricultural practices?
Quynh Nguyen Khanh: Broadly speaking, the rice cultivation areas can be categorised into two regions: the north and the south. The Mekong Delta in the south is the largest hub for rice production and most of our rice exports originate from here. In the North, farmlands are highly fragmented, and most householders own only 0.1 to 0.2 hectares of land. The farmers do a lot of the work, from sowing till harvest, manually, and rarely rely on machinery. The rice cultivated in the North ends up getting consumed domestically. There is barely any scope to introduce any innovation in the northern region because of the fragmentation and low motivation on the part of the farmers. These farmers often abandon their fields, sell them to industrial zone projects, and find employment in urban areas. I believe that any form of digital innovation in agriculture must begin from the Mekong Delta. The farmers here have larger lands and sometimes they work as a collective group. They consolidate their lands and employ agro machinery and even pesticide and fertiliser sprayers. They are now increasingly adopting automation for their farming. The farmers here are more open to innovations as it improves economic efficiency. As an agribusiness, we are still considering modernising crop production management as we continue to learn about its risks and benefits.
Young farmers in developing countries are increasingly migrating to urban areas. However, the digitalisation of agriculture is creating new opportunities for the younger generation. Could you comment on this?
Quynh Nguyen Khanh: We see increasing trends in incidence of traditional farmers abandoning their lands and migrating to urban areas. Concurrently, some young people from cities are moving to rural areas and experimenting with new farming techniques. Though they might not have enough knowledge or experience of farming, they are tech savvy and want to apply technology in farming. Agri-startups are gaining popularity in Vietnam, but these projects are only in the pilot stage. Sooner or later, agriculture here may be very, very similar to what we see in Australia—large areas of farmland but only very few people working on them. We will have to adopt such modern practices here, too, as we no longer have farm workers. We don’t get to see many youngsters with farming backgrounds these days. There is, however, the scope for those who have experience in technology and want to try something new in agriculture. There are many who leave behind their farms only to return a year or so later to work on the farm with new technology. Those not born in rural areas but want to try something new may not understand the harsh reality of agriculture. But they find it exciting and refreshing for themselves.
Do you have any words of advice for the agri-community?
Quynh Nguyen Khanh: Not much of an advice, but just observation. There are two kinds of farmers today. One comprises old-fashioned farmers who do not bother with technology or learning new things and keep up with the practices they have followed for years. Such farmers are now decreasing in number and in the land area they hold. The other kind includes those who are more like businessmen than farmers. They own or buy land and hire other farmers to work for them. These farmers are increasingly replacing the old-fashioned ones, and I think the future of our agriculture economies depends on them. They are more educated and updated on market developments and technology trends. They also have a business mindset. Innovation should be targeted to this kind of farmers.