Aqua-cultured fish is one of the dominant export products in Vietnam. The development of this
sector is a major source of foreign currency and employment. The success of the sector encourages
both local and foreign investment. In Vietnam, the Mekong River Delta (MRD) is the main
producer being responsible for over 80% of the total Vietnamese production (Vietnam Association
of Fish Exporters and Producers -VASEP, 2004). The freshwater Pangasius is the most commonly
cultured edible fish species in this region. Pangasius farming in the Mekong Delta expanded
dramatically: from 154,000 tonnes in 2002 to 1.2 million tonnes in 2007. This explosive growth
raises various sustainability issues. Margin became low or negative as cost of input increased and
market prices decreased. The Vietnamese government has planned the Pangasius farming area of
8,600 hectares with 1.25 million tons of live fish in 2010 and 13,000 hectares with 1.85 million
tonnes in 2020.
Increased export market access for high quality food products is an important avenue for
diversification of Vietnam’s agricultural sector. It is also essential for sustainable rural economic
growth and a reduction of poverty (World Bank, 2006 and 2008). This is especially true for the
sectors with high degrees of smallholder involvement. Smallholder farmers in developing countries
and in particular in Vietnam face a number of technical and managerial constraints that limit their
participation in an export-oriented supply chain (Narayanan and Gulati. 2002; Torero and Gulati.
2004; Van der Meer. 2006; Khoi et al. 2008). The international markets demand that exporters of
fishery products assure hygiene and safety for consumers. The need for more stringent quality
assurance resulted in a shift towards company-owned farms and vertical coordination. However,
the involvement of small-holder may be an important policy instrument for poverty reduction as
fish production in Vietnam is relatively widespread among smallholders and many of them cater
for export markets (Loc, 2006; Sinh and Phuong., 2006). Therefore, the objective of this research is
to design an effective export-oriented Pangasius supply chain based on small-scale farming
systems. Put differently, this research explores how small-scale farmers can benefit from the
emerging opportunities in the Vietnamese fish industry.