Tra farms thirsty for capital, banks turn away

166397 VietNamNet Bridge – Farmers need more capital to maintain production and boost exports. However, bankers do not intend to pour money into the industry.

No banker said at the meeting reviewing the production and consumption of tra fish in Can Tho City on July 22, that they would lend money to fund tra farming, though the industry brought 1.5 billion dollars in turnover last year and it is expected to bring more in 2011.

According to the Ministry of Agriculture and Rural Development (MARD), by the end of June, the total tra farming area in Mekong Delta had reached 3980 hectares, an increase of 385 hectares over the same period of the last year, while the accumulative output had reached 597,324 tons.

If noting that the average export price is three dollars per kilo, the targeted output of one million tons, of which 60 percent would be exported, one would imagine the big profits the tra fish can bring and the huge capital the industry needs.

However, to date, only 10,000 billion dong has been disbursed to the tra fish farming.

Banks turn their backs to tra farming

Duong Nghia Quoc, Director of the Dong Thap province’s Department for Agriculture and Rural Development, the province which has the largest tra farming area with 1188 hectares, said that the outstanding loans to tra farming has been 3549 billion dong, even though the leaders of the Dong Thap branch of the State Bank of Vietnam admitted that the percentage of non-performing loans is low.

On average, every hectare of tra farming pond needs the capital of 4-4.5 billion dong at minimum. Meanwhile, farmers cannot get capital to maintain farming. They have to mortgage assets at banks for loans. Loyal clients would be able to borrow the money valued at no more than 70 percent of the sums of money needed, while prestigious clients, who keep close relations with banks, can borrow up to 100 percent.

In general, households find it difficult to access bank loans, and they only can borrow small sums of money. Meanwhile, cooperatives need to have mortgaged assets. If just one of the households in the cooperatives cannot pay bank debts, other members of the cooperatives have to take responsibility for this. Therefore, many farmers do not accept the requirements.

According to Quoc, banks can be compared with pawnshops, which provide loans based on the mortgaged assets, while clients want to borrow in accordance with their needs.

There are 787 hectares of tra fish farms in An Giang province, 665 hectares in Can Tho, 160 hectares in Hau Giang, 16.95 hectares in Kien Giang. Meanwhile, banks can provide two billion dong at maximum to every household if the households mortgage the land which is not the land for fish farming. If they mortgage the land being used for farming, they would borrow no more than 250 million dong.

The new games

Meanwhile, fish farmers and processing factories now have to apply new standards in aquaculture and processing.

Nguyen Van Can, a farmer who breeds fish on Hau riverside, said: “If only relying on bank loans, it will be impossible to expand the farming area”.

Analysts say it takes about 50,000 dollars to build up the Nam Roi brand pomelo in accordance with Global Gap standards, and they believe that it will take the same cost to build up the fish farming area.

By the end of March 2011, 53 Vietnamese enterprises had obtained the license to export seafood products to the EU, while 261,938 tons of seafood was examined by competent agencies in the first six months of the year.

The Ministry of Agriculture and Rural Development has promulgated Vietgap, the standards for good practice for aquaculture in Vietnam. To date, 49 out of 155 enterprises have been applying the standards for sustainable aquaculture.

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