Agricultural production costs are estimated to increase by 3–5% as a result of the conflict.

The Ministry of Agriculture and
Environment has developed a comprehensive response strategy to address the
ongoing conflict in the Middle East, according to a report released by the Government News.

The plan aims to mitigate negative
impacts, maintain growth momentum, and ensure the successful achievement of the
sector’s 2026 development targets.

Accordingly, three scenarios
are outlined based on the potential duration of the conflict: one month,
three months, and one year. Accompanying these scenarios is a set of both
urgent short-term measures and sustainable long-term strategies.

In the immediate
term, the ministry will focus on
stabilizing the supply and prices of agricultural inputs. Key priorities
include: closely monitoring market fluctuations and establishing an early
warning mechanism for logistics risks; assisting
businesses with debt restructuring, warehousing, and cargo preservation; stepping up
trade promotion activities and identifying alternative export markets to reduce
dependency; and reviewing credit and tax policies to support exporters, reduce
production costs, and maintain essential cash flow amid market volatility.

In the long term, the sector will continue to restructure production to enhance added
value. Long-term goals includep promoting “green agriculture” and integrating advanced
science, technology, and digital transformation; and diversifying
export markets and increasing self-sufficiency in raw materials to reduce
vulnerability to global shocks.

Additionally, the ministry has
formally petitioned the Government and the Prime Minister to direct relevant
ministries and agencies to implement synchronized support policies. These
recommendations include providing credit assistance, trade facilitation, and
agricultural insurance, while removing bottlenecks for both businesses and
individual producers.

The ministry stated that proactively developing these response scenarios is crucial for
enhancing the sector’s resilience. This strategy not only protects the industry
against current global instability but also creates opportunities for
restructuring, ensuring sustainable growth for 2026 and the years to follow.

In 2026, the sector
targets growth of 3.7–4%, with total export turnover reaching about $73–74
billion. Production and export results in the early months of the year have
shown positive signals, laying the foundation for achieving these goals.

However, the conflict in the Middle
East is expected to affect the sector through several channels. First, input
costs are rising due to soaring energy prices, which in turn drive up the cost
of agricultural materials, animal feed, and transportation. Agricultural
production costs are estimated to increase by 3–5%.

In addition, logistics costs have
surged, with sea freight rates climbing by 25–35% and delivery times
lengthening. This impacts the competitiveness of export goods, especially
perishable products such as seafood, fruits, and vegetables. Certain
commodities with a large export share to the Middle East, such as cashew nuts
and pepper, face the risk of disruption.

VGP-Pham Long