Temporary stockpiling – an immediate or long-term solution?

Temporary stockpiles of farm produce can benefit producers and businesses. But how much and how long this needs to be done remains an open question.

There is no denying that temporarily stocking up on coffee, rice and salt would help to make a better profit. However, when the price of coffee starts to go up, the scheme is still underway. Had the Government agreed to provide loans for temporary stockpile earlier, it would have been much more helpful to producers and businesses involved. Why so?

According to Nguyen Van Dong, Director of the Hau Giang provincial Department of Agriculture and Rural Development, since the start of the Summer-Autumn crop, the early rice harvest and the delay in adopting a policy for temporary stockpiles forced rice prices down by VND2,500-2,700 per kg. However, after the policy was implemented, the situation in Hau Giang has improved significantly with the price of rice increasing from VND3,500 to VND 3,800 per kg.

For coffee, under the Government policy, the temporary stockpile of coffee would have expired on July 15 but coffee businesses had then purchased only 10 percent of the set target. The Vietnam Coffee and Cacao Association (VCCA) said that the purchase of 60,000 tonnes of coffee had driven the price of coffee up to VND30,000 per kg. If the stockpile was made earlier, it would be more helpful.

VCCA Chairman Luong Van Tu said that farmers need capital for temporary stockpiles while businesses want to stock their products. In recent times, stockpiles have driven coffee prices up which has greatly benefited farmers; export coffee is currently priced at US$1,600/tonne and farmers can now earn US$200 per tonne higher than before.

The Government’s policy has helped many businesses overcome difficulties and avoid bankruptcy.

Salt makers are suffering losses from a drop in salt prices. Currently, farmers in Bac Lieu have to sell at a very low price, from VND250-500/kg.

Le Kim Hung, Director of the Department for Industry and Trade in Ninh Thuan- the country’s biggest salt producing province said that the provincial department has asked the provincial salt company to purchase salt as soon as possible. Prices have also been fixed to ensure that salt makers can make a reasonable profit.

Judging from the prices of the above mentioned products, it is essential to develop a purchasing programme to support farm products. In addition, trade associations and management agencies should propose more measures to help businesses purchase products in time.

Pham Van An, Director of the Department for Agriculture and Rural Development of Lam Dong province- one of the five central highland provinces that grows a lot of coffee, said that both farmers and businesses will enjoy more benefit if the policy is carried out as soon as possible. Therefore, it is necessary to draw up a regular solution for early temporary stock.

Nguyen Van Dong, Director of the Hau Giang provincial Department of Agriculture and Rural Development, also shared his views by emphasizing the need for temporary stockpiles to prevent market fluctuations due to forcible gauging which damage both farmers and businesses. – VOV

Tags: Vietnam rice