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Food companies begin to purchase rice after Prime Minister’s orders
Most of the Viet Nam Food Association's members have begun to buy rice from farmers in the Cuu Long (Mekong) Delta, according to Truong Thanh Phong, its chairman.
The move follows instructions Prime Minister Nguyen Tan Dung gave at a meeting held last week to discuss farmers' problems.
With rice prices falling and farmers unable to sell their rice, he had told local authorities and grain companies to buy rice and pay farmers reasonable prices.
Phong said VFA plans to buy 700,000 tonnes in the first stage for export later this year.
Nguyen Anh Phong, deputy director of Tien Giang Food Company, said his company would buy 40,000 tonnes of rice though its warehouses are full.
The VFA has asked food companies to buy paddy at not less than VND5,000 per kilogram to ensure profits for farmers.
The State Bank of Viet Nam has ordered State-owned banks to lend to companies buying paddy from farmers, reschedule existing debts, and continue to lend to farmers who have not been able to sell their crop but want to continue cultivation.
Prof. Vo Tong Xuan, an agricultural expert and former director of An Giang University, said the cost of growing one kilogram of paddy was between VND3,400 and 5,300.
If food companies pay VND5,000 per kilogram, the maximum profit farmers would make is 34 per cent, and not 40 per cent as directed by the PM, he said.
If their costs had been at the upper end pf the scale, they would suffer looses, he added.
VNS
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