Building a trademark for Mekong Delta rice

Although Vietnam is currently the world’s second largest rice exporter, its export value still remains low. The simple reason is that Vietnamese rice does not have an established trademark on the international market.

The Mekong Delta plays an essential role in Vietnam’s rice production. As the country’s main rice basket, it is considered to be a decisive factor in ensuring the nation’s food security and maintaining rice exports. Although Vietnam has gained a firm foothold in foreign markets, it still hits snags in developing a brand name for Vietnamese rice.

Front-runners

To meet the increasing demand for better rice, recently the Mekong Delta has developed areas to grow high-quality rice and has focused on building up its rice trademark. In particular, Bac Lieu province has been successful in creating the Hong Dan brand of rice.

The My Thanh Cooperatives in Tien Giang province also produces rice to the Global Good Agricultural Production (GAP) standard with the slogan “producing safe and high-quality rice”. In September 2008, rice from the My Thanh Cooperatives was granted a certificate in recognition of its high quality. The ADC Company has signed a contract to purchase rice from the Cooperatives at a price 20 percent higher than in the local market.

An Giang province, which has the highest rice output in the Mekong Delta region, has invested approximately VND4 billion in a programme to develop trademarks line with Global GAP standards. The province aims to build up a brand name for its three most famous rice products, namely Nang Nhen Bay Nui, Chau Phu and Phu Tan during the 2008-2011 period. The programme will create a closer link amongst businesses and produce high-quality rice for both local and foreign markets.

A local farmer who grows Nang Nhen rice said that he gets a lot of benefit from growing this special rice. “My entire output is snapped up by a company even though the price of Lang Nhen rice is 50 percent higher than ordinary rice,” he added.

Trademark – a must

Vietnam ranks second in exporting rice to the global market and about 90 percent of the country’s rice exports come from the Mekong Delta. However, Vietnamese rice has not yet gained a high export value due to its low quality and high production costs.

The world’s largest rice exporter is Thailand, which uses two thirds of its rice growing areas to grow seasonal rice and one third to grow high-yield rice. However, the export value of Thai rice is higher than Vietnamese rice of the same kind. According to Prof. Vo Tong Xuan, Rector of An Giang University, Vietnam has been the world’s second largest rice exporter since 1989. Nevertheless, the country has not yet created its own trademark so its export value remains low.

The main reason that Vietnamese rice does not command a higher status lies in how seeds are produced and the management of seed quality in the country’s biggest granary is still insufficient and does not meet the area’s full potential.

At present, provinces in the Mekong Delta use over 100 varieties of rice. Therefore, it’s very difficult to meet large-scale orders for exports. Moreover, 15-25 percent broken rice is the biggest export sales, while 5 percent broken rice only holds a small market share.

Only 30-40 percent of rice in the Delta is whole grain, compared with the 50 percent in advanced countries. Against this backdrop, it is difficult to create a trademark for Vietnamese rice. Despite its 2^nd position in the world’s rankings on rice exports, Vietnamese rice still merits little appeal.

According to Truong Thanh Phong, President of the Vietnam Food Association, high-quality rice is what the global market is craving for. So Vietnam needs to change quickly, he said.

Where to start from?

Prof. Dr. Vo Tong Xuan said that it must start from businesses. Cooperation between businesses, farmers and scientists will create a larger production base.

Le Van Banh, Director of the Mekong Delta Rice Institute, has requested all localities to promptly re-organise production, using one variety of rice, which will enable large scale cultivation and control epidemics. In addition, the state should have a policy to assist farmers and businesses by promoting and consuming their products only.

Following the advice of scientists, it is necessary for the Government to bring the Mekong Delta rice (MDR) trademark into the national programme while regional agencies should join efforts to help farmers and businesses penetrate the world’s markets.

VietNamNet/VOV

Tags: Mekong Delta rice