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Experts decry delays in stocking rice
The Vietnam Food Association (VFA) last week delayed its plan to buy rice from farmers to keep prices stable, a decision which experts said would force farmers to sell their rice at dirt cheap prices and might affect rice exports as well.
Explaining its decision, VFA said the current grain prices of VND6,500 per kg are much higher than prices of last year’s summer-autumn crops, so it is no longer necessary to buy 1 million tons of rice from local farmers in order to prevent rice prices from falling to ensure profits.
In fact, rice prices have climbed down to VND6,000 per kg after the stocking plan was delayed.
But Pham Van Quynh, Director of Can Tho Department of Agriculture and Rural Development, said that VFA’s attributing rising prices to the delay in the stocking plan was not persuasive.
He said the stocking helps stabilize rice prices and besides, it is the responsibility of rice exporters towards farmers.
Tran Quang Cui, Deputy Director of Kien Giang Department of Agriculture and Rural Development, also said that as the companies under the VFA are holding most of the market shares in the rice consuming sector, many rice processing firms and small traders have stopped buying rice after VFA delayed the stocking plan.
He said this would cause difficulties to farmers since most of them do not have storage facilities for stocking.
Also protesting against the stocking delay is Doctor Le Van Banh, head of the Mekong Delta Rice Research Institute. “The rice companies said they had to stop buying to cut losses since rice price was as high as VND6,000 per kg,” Binh said. “But why didn’t they complain in the previous years when rice prices were also that high?”
He said rice firms have forced farmers to lower prices to less than VND5,000 per kg and sell at all costs to traders.
Farmers would incur losses with this dirt cheap price, as the input cost for a rice crop is an estimated VND3,800 per kg, he said.
He said the government has ordered rice exporters to buy rice from local farmers to ensure a profit of 30 percent for them. “Since the price of more than VND5,000 per kg could ensure profits for farmers, the VFA does not necessarily buy from farmers at the market price of VND6,000 per kg,” he said. “VFA could suggest a reasonable price to farmers instead of abruptly delaying the stocking plan.”
He also warned Vietnam against a possible rice shortage for export as some Chinese traders have purchased rice from Vietnam at large quantities. “If we did not start stocking now, we would have no rice for export”.
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