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Rice farmers fall deeper into debt
With rice prices falling, 8 million tonnes of the summer-autumn rice crop in the Cuu Long (Mekong) Delta have not been sold, leaving many farmers in financial difficulty.
Truong Thanh Phong, chairman of the Viet Nam Food Association (VFA), said that the price of rice on the international market fell to US$600-700 per tonne this month.
This compares with $1,100-1,200 per tonne in April and May.
In the domestic market, the price has also fallen. One kilo of rice now sells for VND4,200-4,300 compared to VND5,500-6,000 in April and May.
Because of higher prices on fertilisers, pesticides and fuel, farmers can only make a profit if rice sells for at least VND5,000 per kilo.
In the Cuu Long Delta provinces, the country’s rice basket, large piles of rice can be seen lining canals and streets waiting for buyers.
Loans taken out
Many farmers have taken out loans to invest in their crops and have bought fertilisers and pesticides on instalment at a high interest rate, Phong said.
Bui Thi Hanh, a farmer in Tien Giang Province, said that she had not been able to sell any of her rice and cannot pay her debts.
Le Van Tam, a farmer in Dong Thap Province, faces the same situation and has no money to buy school supplies for his children.
Although the Government has permitted rice exports, Phong said exporters were holding back purchases for two reasons: fears that the price could fall further and high interest rates on bank loans.
Le Viet Hai, director of Mekong Can Tho Company, said his company as well as other exporters would seek contracts to buy rice when the price on the global market goes up again.
Tax disincentive
Pham Van Bay, director of An Giang Agriculture Products and Food Import-Export Company, said the 10 per cent tax on rice exports had also discouraged rice exporters. According to Phong, VFA plans to hold a meeting to discuss measures on how to resuscitate the rice market.
VNS
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