Rice exporters slow to support farmers

Rice exporting firms in the Cuu Long (Mekong) Delta region have been slow in implementing the Government’s recent order to buy up 1 million tonne of rice from farmers by mid September.

Late last month, the Government required the Viet Nam Food Association (VFA) to order its 48 member companies to start buying 1 million tonnes of rice from farmers as the flood season approaches. The Government order required firms to buy rice at a price that ensured farmers with a 30 per cent profit.

However, this requirement has caused confusion among export firms, who are balking at buying rice above market prices, despite the fact that market prices in many areas barely cover farmers’ production costs.

Nguyen Trong Nghia, vice chairman of Dong Thap Province’s People’s Committee, said that rice farmers in the Mekong Delta province were not making much profit, as production costs for rice were above the market price.

“If firms are asked to buy at market price, how can farmers get any profit, let alone a 30 per cent profit?,” he said.

Pham Van Ranh, the People’s Committee vice chairman of Long An Province, also in Mekong Delta, said that in Long An Province, in order for farmers to make a 30 per cent profit, firms had to buy rice at VND3,900 ($0.2) per kilogramme. The market price, meanwhile, was VND3,000 or even lower.

Huynh Minh Hue, general secretary of the VFA said companies had started to buy rice, but at a slow rate and at prices that could not ensure a 30 per cent profit for farmers.

Meanwhile, Nguyen Van Duong, vice chairman of Dong Thap Province’s People’s Committee, said it was understandable that companies hesitated to buy more rice as ordered.

“Many companies are also having difficulties in doing business, they still have rice stored in their warehouses,” he said. “Where can they store the new rice if they buy more?”

Professor Vo Tong Xuan from An Giang University said a vicious circle of lost profits could continue if farmers did not receive guidance from the Government.

“Farmers don’t care much about production planning, and the Government’s management on agricultural produce should be blamed for this,” he said.

“If authorities guide farmers to grow a better variety of rice and plan more instead of focusing on spontaneous production, farmers can make better profits.”

“Farmers have been making losses from year to year,” Professor Nguyen Bao Ve from Can Tho University said.

“The Government needs to rethink which types of crops are harvested and provide more guidance on the types of varieties farmers should be using.”

Tags: Vietnam rice, Vietnam rice exports