Development of GM crops may reduce the nation’s dependence on imports, helping to narrow the trade deficit and calm concerns about economic stability.

Increases in food prices have spurred inflation of 27 percent, the fastest since at least 1992.

“Vietnam plans to allow massive production of GM crops after 2010,” Pham Van Toan, Hanoi-based head of the general office at the agriculture ministry’s Science and Technology Department, said.

The country approved in 2005 the program to cut agricultural imports, he said.

The agricultural attaché’s office at the US embassy in Hanoi said in a report the authorities have completed a draft of a law that will allow such crops.

A National Assembly session in October is expected to approve the law, Vietnam News Agency reported.

Bui Thi Huong, an agricultural specialist at the embassy, said in the report: “Vietnam remains keen to produce genetically modified crops, particularly soybeans, corn and cotton, to reduce the dependence on import of these key commodities.”

Vietnam was Asia’s biggest importer of soybean meal, which is used primarily for animal feed, along with Indonesia last year.

It shipped in 2.4 million tons, according to data from the Foreign Agricultural Service.

Vietnam also imported 750,000 tons of corn, the FAS said.

Dependence on imports
The country is dependent on imports of soybeans, corn and cotton for its “large feed and textile industries,” Huong said.

Cotton imports rose 26 percent to 170,000 tons in the seven months through July, according to the General Statistics Office.

Cotton is used by the garment industry to manufacture clothes, the country’s second-biggest export after crude oil.

The trade shortfall widened in the seven months through July to US$15 billion, or more than in all of 2007.

The deficit in the same period last year was $6.3 billion.

Imports rose 57 percent, slowing from 62 percent growth in the first half.

Toan said the Science and Technology Department has not issued any guidelines to ensure GM crops are safe for mass production.

Delays in approving regulations mean the 2010 target is unlikely to be met, according to the US report.

Vietnam aims for GM crops to account for about 70 percent of production by 2020, the report said.

“Under this plan, Vietnam expects to create new plant varieties, animal breeds and biotech products through application of biotechnology, so as to enhance the competitiveness of its agricultural and fishery products,” Huong wrote. Bloomberg