Mon. Apr 15th, 2024

VietNamNet Bridge – The government has decided that rice exporters would buy
2 million tons of husky rice from farmers. However, the effort by the government
cannot ensure profits for farmers.

Vietnam, VFA, rice, floor price, export turnover, Thailand

By February 18, the farmers in Mekong Delta had harvested 1.2 million tons of
husky rice from 200,000 hectares of winter-spring rice fields. Meanwhile, rice
export companies have been collecting rice in dribs and drabs, which has put
farmers on the tenterhooks.

When asked why VFA has been delayed in collecting rice from farmers per the
request by the Prime Minister which has led to the sharp fall of rice price,
Truong Thanh Phong, Chair of VFA has attributed to the long Tet holiday. Most of
the rice enterprises only get back to work on February 18.

Phong said the rice collection under the government initiated program would
begin from February 20. The price of husky rice which meets the export standards
would be no less than VND5,000 per kilo.

Farmers sell husky rice, enterprises seek husked rice

“Private merchants are now collecting IR 50404 at VND4,200 dong per kilo of
fresh husky rice. However, they only buy rice in limited amounts. Farmers hope
that the rice prices would increase in some days, when rice exporters begin
their program on collecting rice for storage,” said Dien Thi Kim, a farmer in
Phuong Binh commune of Hau Giang province.

The low quality rice has been traded in Mekong Delta provinces at VND4,000-4,500
per kilo on average. Ut Khuong, 73, a farmer in Cho Moi district of An Giang
province, noted that over the last three years, private merchants come to buy
rice directly at the rice fields, then carry rice away for having rice husked
and sell to rice enterprises.

Also according to the farmer, the government instructed rice exporters to
collect rice at the prices high enough to ensure the 30 percent profit for
farmers at minimum. However, in fact, it’s very difficult to control the rice
collection prices. The problem is that the majority of farmers have to sell rice
to private merchants instead of selling directly to enterprises.

The rice from farmers would reach out to rice export enterprises after going
through different intermediaries. Therefore, the rice prices set up by the
Vietnam Food Association (VFA) is always VND100-300 dong per kilo higher than
the price at which farmers sell to private merchants.

It seems that farmers and enterprises still cannot find a common voice, since
farmers only sell husky rice, while enterprises only seek husked rice. In fact,
the problem was found by the Ministry of Agriculture and Rural Development,
which pointed out that farmers still cannot benefit from the government
initiated policy on collecting rice for storage to ensure profits for farmers.

VFA shares benefits with farmers?

In principle, VFA, the organization representing rice export enterprises, needs
to share difficulties and benefits with farmers, for the sake of Vietnam’s rice

However, in fact, there has been no close link between the producers and
traders. Farmers sell rice in accordance with the market prices, making profits
or taking loss depending on the market prices at different moments. Rice
enterprises also have to take risks on the basis of definitive purchase and

In 2012, Vietnam became the biggest rice exporter in the world with 7.7 million
tons of rice exported, when Thailand was dislodged from the position. The Mekong
Delta, the main rice granary of Vietnam, provided 24.6 million tons of husky
rice for export, or 1 million tons higher than in 2011. However, the farmers in
the Delta still could benefit from the output increase and the title of the
biggest rice exporter in the world.


By vivian