Catfish farmers opt for losses due to bank duress

Catfish prices have gone down but many farmers in the Mekong Delta are forced to sell due to the pressure from the high interest rates on bank loans.

Le Thi Dao, a catfish farmer in Can Tho, said she had managed to sell only one out of her three ponds in which she farmed catfish.

She was unable to find buyers for the other two though prices had fallen to VND23,000 (US$1.1) per kilogram from VND28,500 at April end.

She was extremely worried since her bank debt was due on June 27.

“If I do not manage to sell the fish, I will not be able to clear the debt in time. The high interest rate plus the fine for overdue payment will cause me a big loss.”

Nguyen Thi Mai, a catfish farmer in An Giang Province, contracted with Tuan Anh Corporation to sell 130,000 kg of catfish at VND26,000 each in May.

But the firm refused to buy the fish until the price dropped to VND22,000.

Fearing that price would fall further, she had no option but to sell at that price to pay her loan in time.

Thai An Lai, deputy head of the Dong Thap Seafood Association, said a price of VND23,000 would cause farmers a loss of VND1,000 on every kilogram they sell.

However, the pressure to repay loans and the 20 percent plus interest rate had forced farmers to sell at a loss.

Some firms had taken advantage of this to force the price even lower.

Nguyen Van Thanh, head of the An Giang Department of Agriculture and Rural Development, said farming costs had increased by 30 percent this year.

The banks had worsened their plight by increasing interest rates.

Le Van Thanh, an An Giang farmer, said he had borrowed VND1 billion ($50,000) from a bank at an interest rate of 19 percent.

But the bank had recently hiked the rate to 21 percent.

There have been reports of banks hiking the rate to even 25 percent.

Many seafood associations in the Mekong Delta have called for policies to support farmers.

Nguyen Ngoc Thach, director of the Dong Thap branch of the State Bank of Vietnam, said the bank would consider offering farmers more time to repay if they were unable to sell their fish and not slap fines for late payment.

Nguyen Tuan Phuoc, deputy director of the An Giang Bank for Agriculture and Rural Development, said his bank would offer a two-month extension. – Tuoitre

Tags: Vietnam catfish exports