Vietnam dairy sector needs policy reforms to unlock growth potential

Vietnam's dairy industry faces critical hurdles that must be cleared to realize its substantial development prospects, according to sector specialists who have outlined a comprehensive reform agenda.

Key recommendations centre on establishing mandatory minimum quotas requiring dairy processors to source fresh milk domestically, coupled with strategic financial incentives. Experts suggest the government introduce preferential capital access, favourable credit terms, and tax benefits for companies that exceed prescribed domestic milk procurement targets.

The proposed approach draws from proven strategies already implemented across the region. The Philippines, Indonesia, and China have successfully employed similar mechanisms to bolster local dairy production and reduce import dependency. These neighbouring economies have demonstrated that combining regulatory requirements with economic incentives effectively stimulates investment in domestic supply chains.

Implementing such policies would address critical vulnerabilities in Vietnam's dairy value chain while supporting local farmers and processors. The measures are designed to encourage vertical integration within the industry and create stable, predictable demand for domestic raw milk supplies.

Industry observers note that removing these structural constraints is essential for Vietnam to capitalize on expanding domestic demand for dairy products as consumer purchasing power continues to rise across the country.