ADB loan to improve VN food safety

A US$95 million loan from the Asian Development Bank (ADB) will be used to improve the safety, quality and quantity of Viet Nam’s commercial food crops, and provide alternative and clean energy supply to households through biogas development.

The Manila-based bank’s Board of Directors has approved the loan for the Quality and Safety Enhancement of Agricultural Products and Biogas Development Project.

The project will improve food regulations and quality control systems to meet both domestic and export standards. New infrastructure and facilities to support safe food products will be established, and biogas plants will be built to reduce health hazards from livestock waste.

An ADB press release says financial support, including a credit line, will be made available to 40,000 households for the development of biogas digesters, which both reduce pollution and provide an alternative energy source.

In addition, projects eligible for carbon credits will be developed in conjunction with the biogas units, helping to generate revenue for the Government.

The project, which supports the Government’s efforts to improve food safety and quality, is expected to directly benefit around 6.5 million farmers in 16 provinces and generate about 1.4 million jobs in post-production work.

As a result, poverty incidence in the project areas is expected to fall from 19 per cent to 10 per cent over the 2016-20 period, the press release says.

The total project cost of $110.4 million includes $6.22 million from the central government; $6.5 million from people’s committees in the 16 provinces; $1.35 million from partner financial institutions and another $1.35 million equivalent from the beneficiaries of the biogas plants.

ADB’s loan, drawn from the concessional Asian Development Fund, has a 32-year maturity. The executing agency for the project is the Ministry of Agriculture and Rural Development and the estimated completion date is June 2015.

ADB is also providing a technical assistance grant of $1.5 million to provide start up support for project management and to design a strategy to expand the national biogas programme.

Viet Nam is o­ne of Southeast Asia’s largest producers of fruits, vegetables and teas, but current agricultural practices, such as the high use of fertilisers and the dumping of livestock waste, have impacted o­n the environment and public health, and hurt the sector’s export prospects.

"The increasing integration of Viet Nam’s agricultural production, processing and marketing with international markets makes it critical that improvements are made in product quality and food safety if Viet Nam is to maintain and increase its international market share," says Mahfuzuddin Ahmed, senior agricultural economist with ADB’s Southeast Asia Department.