Vietnam’s forestry sector poised for breakthrough growth

Minister of Agriculture and Environment Do Duc Duy has stressed that Vietnam’s forestry sector is at a pivotal moment, with the potential to surpass its traditional 5% growth rate and achieve double-digit expansion.

As one of the three pillars of the agricultural sector, alongside livestock and fisheries, forestry is being developed, not only with a focus on sustainability but also as a multi-objective industry that maximises its economic, environmental and climate resilience contributions.

Duy highlighted that Vietnam has 15.8 million hectares of designated forestry land, including 14.8 million hectares of forested land and nearly eight million hectares of production forests, providing significant opportunities for growth.

With an average annual production value increase of 4.7% and a trade surplus contributing 60% of the country’s total, the sector has made notable progress. However, Duy pointed out that its full potential remains untapped due to institutional barriers, insufficient investment, and slow technological adoption.

The minister identified several structural challenges, including inconsistent policies, weak forest management infrastructure, and inadequate investment from central to local levels. He also noted that scientific and technological applications in forestry remain limited.

Another major hurdle is overlapping forest ownership. Vietnam has nearly 1.2 million forest owners, with just 2,000 State-owned entities managing 50% of the total forest area. Additionally, balancing economic development with forest conservation continues to be a pressing challenge.

Deputy Minister of Agriculture and Environment Nguyen Quoc Tri emphasised that forestry planning is frequently affected by competing priorities such as transportation, infrastructure and economic development, making forest management more complex. He also pointed out that forest support policies are fragmented and prone to overlaps, reducing their effectiveness.

To address these challenges, the Government has strengthened decentralisation, granting local authorities greater flexibility in implementation. However, Duy stressed that significant investments in high-quality human resources and infrastructure are still needed to meet modern development demands.

The Director of the Department of Forestry and Forest Protection, Tran Quang Bao, proposed incorporating revenue from forest environmental services, approximately 3 trillion VND ($118 million) per year, into the sector’s official production value. This, he argued, would better reflect forestry’s contributions to the economy and provide a crucial funding source for reinvestment in forest quality and community support.

To drive the sector forward, Minister Duy outlined a development strategy centred on 'multi-value, multi-objective' growth.

"Forestry is not just an economic sector; it is deeply linked to environmental protection, ecological conservation and sustainable development," he emphasised.

The strategy is centred on a number of key priorities, including institutional and policy reforms to eliminate regulatory overlaps in forestry, land management and biodiversity conservation, sector restructuring and technology adoption to modernise forest management and enhance disaster resilience, diversified forest-based economic activities, including under-canopy farming, eco-tourism, and conservation initiatives and human resource and infrastructure investments to support long-term development.

Duy highlighted the importance of digital transformation, citing the pilot project for plantation coding across 10 provinces in 2024 as a step toward building a national plantation database and timber traceability system to enhance transparency and export value.

The Minister also underscored the role of carbon credits as a 'valuable national asset' and a potential bargaining tool in international climate negotiations. He called for policies that incentivise environmental protection, expand the carbon credit market, and improve financial support for forestry workers.

"Current forest protection payments are too low to ensure stable livelihoods for local communities," Duy noted, emphasising that this remains a major barrier to rural development in remote areas.

With these strategic shifts, Vietnam’s forestry sector is poised for a transformative leap, unlocking new economic potential while reinforcing its critical role in environmental sustainability and climate resilience.