Although banks are prioritizing agricultural production as ordered by the central bank, most livestock farmers say interest rates are still too high for them to borrow.
Nguyen Van Son, a pig farmer in the Mekong Delta Province of Tien Giang, said he needed 60 million dong (US$3,000) to revitalize his farming which was severely damaged by last year’s epidemic.
“But I can’t borrow with the interest rate of 21.6 percent a year,” Son said.
Nguyen Van Ngoc, who runs a pig farm in the southern province of Dong Nai, also said interest rates were too high for farming, even though pig prices were high.
Nguyen Tri Cong, another farmer from Dong Nai, said he had planned to expand his herd to 4,000 pigs with the initial investment of 30 billion dong ($1.5 million), but failed to do so because of the lending rate of 18 percent a year.
“With such a high rate, I would certainly lose,” Cong said.
Nguyen Van Ut Em, an agricultural official in Dang Hung Phuoc Commune in Tien Giang, said pig farmers were badly in need of capital, but the banks had yet to provide them any support while input costs had also soared.
Tran Quang Trung, who runs a farm with 1,000 pigs in Dong Nai, said labor costs had climbed to 120,000 dong a day from 50,000 dong a day last year, while feed prices had hiked 6 to 7 times since early this year.
Meanwhile, some banks have offered preferential lending rates for the agricultural sector, but said they could only make a slight reduction since deposit rates are still as high as 16 percent to 17.5 percent a year.
Asia Commercial Bank (ACB), for instance, has reduced its lending rate by 1.2 percent a year for individuals and households working in agricultural production.
Branches of the Vietnam Bank for Agriculture and Rural Development (Agribank) in some Mekong Delta provinces have also announced lending rates of 18-19.5 percent a year for agricultural households, down by 1 percent compared to previous rates.
The Ho Chi Minh City branch of the Vietnam Joint Stock Bank for Industry and Trade (Vietinbank) has also cut its lending rate to the agriculture sector by 2.5 percent a year, its director Nguyen Van Se said.
Nguyen Phuoc Thanh, CEO of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), said borrowers in the agricultural production sector would enjoy a preferential lending rate of only 14 percent a year even though mobilized capital at his bank and others had been going down.
“It would be difficult for banks to reduce interest rates lower,” Thanh said. – Tuoitre