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Traders asked to help agriculture by stocking up during hard times
The Ministry of Agriculture and Rural Development (MARD) is asking enterprises to purchase and store agricultural produce to help farmers through a slowdown in consumption due to the global financial crisis.
The number of agriculture export contracts signed in December was modest compared to the large quanitity of crops ready to be harvested.
In July, the export turnover of agricultural produce reached US$1.75 billion, but in October the figure decreased to $1.39 billion and sunk further to $1.2 billion in November.
According to estimates from the Ministry of Agriculture and Rural Development, farmers in the Mekong (Cuu Long) Delta are stocking about 1 million tonnes of rice, 100,000 tonnes alone in Can Tho Province.
"Traders have stopped buying, because the country’s crop exports have decreased," said Pham Van Quynh, director of the Department of Agriculture and Rural Development of Can Tho Province.
Meanwhile, Nguyen Nhu Lai, chairman of the Northern Food Company, said that business had slowed in December, with no new contracts signed.
The aquaculture sector is facing the same difficulties.
According to the Viet Nam Fisheries Association, 20 to 30 per cent of catfish breeders in the MeKong Delta have declared bankruptcy and 40 per cent have lost all their capital. About 40 to 50 per cent of the water area used for breeding has been abandoned, since farmers do not have the money to re-invest.
"Last year, I expanded the breeding area. But now I only have a few small ponds. I still have not paid off all the loans that I used to buy food for breeding," said Nguyen Thi Tuong, a farmer in Can Tho Province.
Doan Trieu Nhan, a senior consultant at the Viet Nam Coffee Association, said that there were currently 700,000 tonnes of coffee overstock.
Nhan said that the global financial crisis had forced finanicial institutions to cut off loans from import enterprises.
Economic experts have warned that the crisis would continue to impact Viet Nam’s agricultural sector through the end of next year.
However, farmers need money to plant a new season of crops.
"I have to pay back the bank loans and buy fertiliser for the new crops. I hope my rice can be purchased soon," said Duong Van Chau, a farmer in the southern province of Tra Vinh.
"I don’t have money to pay labourers, whom I hired to harvest rice; paying school fees for my children is another problem," said Tran Van Xo, a farmer in Tan Long Village.
Buying overstock
The agriculture ministry is encouraging enterprises to purchase overstock, paying farmers an initial payment and then the rest of the total after the products are sold.
Responding to enterprise worries about access to bank loans with low interest rates, Minister Cao Duc Phat said that the ministry ordered the Bank for Agriculture and Rural Development of Viet Nam to provide no-interest loans to the Nothern Food Company and the Southern Food Company to purchase up to 600,000 tonnes of rice overstock from farmers in the Cuu Long (Mekong) Delta.
Le Quang Thung, general director of the Viet Nam Rubber Industrial Corporation, said that the company planned to buy 100,000 tonnes of latex from farmers.
"Even if the Government does not support us with preferential interest rates, we will still purchase this rubber and sell when the price is reasonable," said Thung.
VNS
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