Will Vietnamese farmers benefit from new Thai rice pricing policy?

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In principle, Vietnamese farmers will get benefits from the new Thai policy under which the government will buy rice at 15,000 baht (500 dollars) per ton from farmers. However, the benefits remain unclear, though the domestic price has increased slightly.

How will the rice price be like?

While some experts believe that the rice price will be increasing in the last months of the year, the Vietnam Food Association (VFA) has affirmed that the rice price would be stable, while no sharp rise would occur.

VFA’s Chair Truong Thanh Phong, has said that domestic companies have assured that no rice fever or supply shortage would occur in the upcoming months.

Phong can make such a statement because the total rice export volume VFA’s member companies have signed with foreign partners has reached 7 million tons already, which is equal to the total export volume planned for 2011.

VFA said that by the end of August, Vietnam had signed the contracts on exporting 6.4 million tons or rice. Meanwhile, in September alone, Vietnam obtained the contract on exporting 400,000 tons of 15 percent broken rice to Indonesia.

This is just the figure for making public, while the actual figure, according to analysts may exceed seven million tons.

The rice export contracts were mostly the ones signed in the period from mid September and earlier, which means that the export price was about 580 dollars per ton or lower.

When Thoi bao Kinh te Saigon reporters informed the information to domestic rice traders in Ba Dac wholesale market area in Cai Be district of Tien Giang province, and the enterprises in Cai Lay district of the same province, the traders said it is now understandable why VFA once again lowered the export price earlier this September.

“This is a trick played by VFA’s member companies to force the purchase prices down to collect rice for export,” one of the trader said.

If so, the scenario drafted by VFA will come contrary to the predictions by foreign and domestic experts that the rice price in Asia, including Vietnam, would reach the three-year highest peak.

While VFA’s leaders have stated that there will be no price fever, some analysts believe that the domestic rice price would keep rising towards the end of the year.

The analysts say that once the new Thai Prime Minister, Yingluck Shinawatra, fulfills her commitments to purchase rice from farmers at the price of 15,000 baht per ton, this will make the regional rice export price increase. If so, the Vietnam’s rice export price would increase, which would also push the domestic prices up.

It may happen that when the Thai rice gets more expensive, Thai speculators would purchase rice from Vietnam and Cambodia to sell domestically. This means that Vietnamese rice will be on the high demand, which will make the prices up.

Domestic prices increasing, but slightly

The information that Thai government will buy rice at high prices from farmers and that Thailand and Vietnam plan to sit together to discuss the rice pricing strategy–has made Vietnamese dealers firmly believe that the domestic prices will escalate.

However, the domestic market has not witnessed any significant rice price increases. Especially, farmers sometimes have to accept to sell rice at low prices.

Farmers in Tien Giang, Long An, Tra VInh, Dong Thap and An Giang, the biggest rice granaries in Vietnam, said that the price has increased by 100 dong per kilo in comparison with September 20. Long grain rice, such as OM 5451, OM 4218, OM 1490, for example, has increased by 50-100 dong per kilo. However, IR 50404 price remains unchanged at 5900 dong per kilo.


Farmers “thirsty” for information

144072 Offering easy access to information and communication is considered a top priority in policies for farmers in rural areas.

Information is necessary for people of all strata and very important for their production and business activities. It appears paradoxical that in the era of information explosion with the strong development of different means of communication such as radio, television, printed newspaper and online newspaper, Vietnamese farmers are not fully informed about culture, social affairs, entertainment and other developments related to their daily life such as the price of farm products, application of technical advances in agricultural production and legal policies.

According to a recent survey, up to 90 percent of farmers in northern provinces do not read printed newspapers while the figure is even higher than in central provinces. Meanwhile, only 40 percent of farmers tune in to radio programmes and not many have access to television broadcasting and the Internet. Even worse, local post services are outdated.

The main information channel for farmers in rural areas (hamlets or communes) only focuses on disseminating plans of action at some point.

Due to the lack of necessary information about production and market prices, farmers, in some cases, have arrived at wrong decisions and have to suffer great losses in production and business operations on account of buying fake and low-quality products. Moreover, they are left almost in the dark about new guidelines and policies, particularly important incentives for farmers involved in agricultural production.

To provide farmers with adequate information, it is essential to build more libraries, renew post services to help them improve their knowledge and quality of life

In remote areas, apart from radio and TV information channels, there should be qualified staff capable of helping farmers access information whenever they need.

Information is a vital resource for all Vietnamese in the process of renewal and integration into the world.


Unsettling farm trade with China

tải xuống (12) Vietnamese farmers and businesses are experiencing very unstable trade with Chinese traders who pay very high for farm produce they need, but when the commodity is in surplus the price drops.
According to the Mong Cai Animal Quarantine Station in the northern province of Quang Ninh, since early this year, Chinese traders have paid high prices for pigs in Vietnam. This has caused imbalances in supply and demand, hiking pork prices for several consecutive months.

Chinese traders don’t just buy from Vietnamese traders but purchase female and sucking pigs directly from the Mekong Delta provinces.

Hoang Kim Giao, head of the Livestock Breeding Department says that Chinese traders hunt down pigs in Vietnam because food prices in their country have increased and necessary commodities are scarce.

Chinese traders not only come looking for pigs they also purchase sliced cassava which has shot up the product’s price.

Le Ba Lich, chairman of Vietnam Feed Association said that because Chinese traders have purchased cassava, domestic feed producers have faced a shortage. Every day, hundreds of trucks transport cassava to border gates in the north.

The skyrocketing of cassava prices, from VND1, 500/2,000 to 5,000/6,000 a kilogram now, has pushed the feed price up too. This together with an increase of pork prices has raised prices of other food items as well, affecting price stabilization in Vietnam, Lich added.

Tan Thanh Border Gate regularly see fruits like watermelon, dragon fruit, litchi and banana pile up to sell to Chinese who usually pay very low when the supply is abundant.

At such low prices, many businesses don’t dare to sell due to losses. However, only one or two days later, the fruit begins to rot and they are forced to sell at very low prices set by Chinese traders.

Monitor supply

According to Nguyen Tri Ngoc, head of the Cultivation Department, farmers must not be influenced by the temporary high prices offered by Chinese traders into farming a particular crop only. Earlier, when cassava prices rocketed, several farmers transferred to growing cassava from coffee and sugar cane.

Lich said relevant authorities should have legal barriers to limit the purchase of cassava by Chinese traders as it might affect feed producers.

Nguyen Do Anh Tuan from the Ministry of Agriculture and Rural Development says to protect farmers from low prices set by Chinese traders; the state must monitor the supply of farm produce in order to provide domestic farmers and businesses with information on the market.

Every year, relevant authorities should advice farmers on plants to grow and acreage to cover to ensure profits for them. Information on the sale of fruits at border gates should be updated so that businesses do not bring more fruit than required to save produce from rotting.