Farmers’ Union complains it is being ignored on rice export policy

A new decree on rice exports may be issued soon.  It’s said that the decree aims to ensure that farmers receive at least 30 percent of the final value, but strangely, the Farmers’ Union has not been officially consulted about its provisions

Tuoi tre interviewed the Chairman of the Vietnamese Farmers’ Union (VFU), Nguyen Quoc Cuong, to find out more.  Cuong said that the decree has gone through four drafts, but the Trade Ministry drafters have discussed it only with rice exporters and traders, not with farmers.

Farmers, Cuong said, contribute over 50 percent of the ‘work’ of rice production.  Traders do ten percent but they enjoy 67 percent of the added value, an overly high profit for middlemen.

Tuoi Tre: Many people think that Minister of Industry and Trade Vu Huy Hoang, questioned at the National Assembly, offered no solution to help rice growers obtain 30 percent of profit in the rice production chain.  What’s your view?

Farmers’ Union head Nguyen Quoc Cuong: The Ministry of Industry and Trade (MOIT) covers many fields and areas, but  the biggest rice exporters, the Northern Food Corporation (Vinafood 1) and Southern Food Corporation (Vinafood 2), are state companies belonging to the Ministry of Agriculture and Rural Development (MARD).

MOIT only cares for trade, so it is understandable if the minister does not have much information about agricultural production.  In fact, not only Minister Hoang, but also the Agriculture Minister, Cao Huy Phat, did not offer concrete answers.

TT: Minister Hoang emphasized that the new decree on rice export management will be the way out for farmers’ profit problem. However, it seems that the draft decree focuses on setting up strict requirements on storage capability.

Cuong: I cannot understand why MOIT, when compiling a decree on rice exports, does not consult with farmers.  It’s the farmers who produce the rice. This is quite unreasonable. We have to contact MOIT ourselves to express our opinions.

We think that besides setting up a rice storage regime, rice export companies should be required to sign contracts to buy rice [at a certain price] from a certain number of farmers or their representative. This will establish the responsibility of rice exporters vis-a-vis farmers and equalize the risks.

The draft decree doesn’t address the crucial problem that the rice exporters just act for their own benefit and sometimes dump rice on the world market. That explains why Vietnam’s rice, though of good quality, is still selling at low prices

TT: So do you feel that ministries don’t care much what prices the farmers receive?  It’s been a month since reports surfaced that a VInafood 2’s subsidiary in Singapore was selling rice for less than the official floor price, but both MOIT and MARD’s ministers said they still have not ordered an investigation . . . .

Cuong: Now that National Assembly deputies have raised questions, I believe that the two ministers will instruct their staffs to look into the matter. It is true that the rice exports have not been under strict control. I think that dumping cases have occurred recently. When some exporters sell rice for less than the floor price, importers will force many other exporters to sell rice at low prices.  That keeps Vietnam’s rice price low in the world market, and farmers cannot get a fair price.

We have suggested that one dollar be collected for the rice fund for every tonne of rice that’s exported.  Vietnam exports 5-6 million tonnes of rice every year, which means that we will have a big fund.  Many rice exporters have told us that they can contribute $2-3 per tonne Nguyen Quoc Cuong, Chairman of the Vietnamese Farmers Association

VietNamNet/TT

Tags: Vietnam business news, Vietnam rice export