Marketing co-ops can put more money in farmers’ pockets

Though farmers have to work hard, they get only a small share of the value of their crops. Especially, they tend to lose out when the price rises after a harvest. Experts say that to solve the problem, farmers should join in marketing co-operatives that are able to store rice until the price is right.

Four of five experts consulted by Tuoi Tre agree that marketing cooperatives can bolster small farmers’ strength vis a vis middlemen and rice exporters. They’re not talking about the huge production co-ops of the pre-doi moi days, but rather about new model, market-savvy organizations.

Dr. Vo Tong Xuan, former rector of An Giang U.: it is necessary to compensate farmers’ losses

Farmers ought to join cooperatives or enterprises. When they harvest their crop, they can keep their rice into a co-op warehouse instead of selling it right away to a middleman. If the rice price surges higher by the time when cooperates sell the rice, farmers will receive the gain.

As in Japan or the US, there ought to be a state budget mechanism that will compensate farmers’ losses if the rice prices go down, ensuring that farmers never take a loss.

Nguyen Minh Nhi, former Chairman of the An Giang province People’s Committee: it is necessary to reorganize production

The rice price in Vietnam fluctuates all the time, and it sometimes drops so dramatically that the State has to intervene in the market by instructing rice exporters to buy rice to hold in warehouses. We have an unreasonable production organization and bad export management. There’s no “conductor” to regulate the whole production chain. A radical solution is needed.

Because most farmers produce crops on a small scale, it is difficult for the State to give direct support. We need new-model cooperatives, and through these, the State will be able to assist farmers to set up the means to store rice themselves. If so, farmers will be able to get profit.

Nguyen Van Khang, Deputy Chairman, Tien Giang Province People’s Committee

Farmers ought to join together in marketing cooperatives. Only when such cooperatives are established will enterprises be able to sign contracts to buy the products of farmers at a certain date and price in the future. In fact, the Tien Giang Food Company has been trying to sign such purchase contracts. However, since there are few cooperatives left, the number of contracts remains modest. Enterprises cannot sign contracts with every household. However, in Tien Giang we have the My Thanh Cooperative, which produces high quality rice. It’s a good model which should be multiplied.

Dr. Pham Van Du, Cultivation Department, Ministry of Agriculture and Rural Development (MARD)

Yes, the best way is to establish co-ops. Farmers ought to join cooperatives instead of facing the market separately. Rice harvested by farmers will be dried at cooperatives and put into storage at State expense. The farmers can decide to sell their rice when the price goes up; they won’t be forced to sell when the price is low.

Commercial banks should consider providing longer term loans to farmers. Fertiliser and pesticide suppliers should sell products directly to farmers instead of through intermediaries, which will help reduce the cost of production.

Tran Duc Tung, retired MARD expert

Currently, eighty percent of Vietnam’s rice exports are handled by two big state-owned corporations. When they don’t want to buy, prices plummet. The State should get out of this business, and stick to ensuring that there is plenty of competition among private companies.

- Tuoi tre

Tags: Vietnam agriculture