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Land shrinks for cotton cultivation
Cotton prices will need to climb further before farmers embrace the crop.
The price of cotton has not risen enough to convince many farmers to switch from other crops to cotton.
The nation’s cotton industry has not benefited much from the modest rise in prices as land under cotton cultivation has shrunk during the past several years.
Some say cotton prices need to climb further, and the Government needs to implement an efficient cotton buying plan for farmers to show more interest in the crop.
Nguyen Duc Trung, a cotton grower in Cho Glong Commune in the Tay Nguyen (Central Highland) province of Gia Lai’s Krong Chro District, said his family had to reduce their cotton growing area despite high demand for raw cotton.
The family grew 0.7ha of cotton last year with an average productivity of 240,000kg per ha, earning a profit of VND8.1 million (US$476). However, the profit was much less than that of other crops such as Japanese sweet-potato, which according to Trung could earn him VND40 million per ha.
"To attract farmers to develop cotton, the sector needs to continue to raise buying prices and pour capital into the whole process, from the beginning of the cultivating season and setting up a buying plan to help farmers plan cultivation," said Trung.
According to data from the Institute for Cotton Research and Development, land for cotton cultivation has shrunk by three quarters from 26,700ha during 2001-02 crop to 7,446ha last year.
In the past eight years, the price of soy beans has increased by 3.7 times, that of maize and rice skyrocketed by four times while cotton prices only increased by 1.6 times.
Deputy General Director of the Viet Nam Textile and Garment Corporation (Vinatex) Nguyen Huu Binh said cotton was a kind of short-maturing crop – different to crops that have been grown locally for several generations, such as coffee and rubber. "So people are more ready to give up on it," said Binh.
"But whenever cotton has a good price, cultivation develops."
Binh said farmers rushed to grow cassava last year because profits from the roots cassava in 2007 were much higher those that of cotton.
Director of Institute of Cotton Research and Development Tran Van Hung said farmers had no choice. They needed to grow crops which had higher profits to earn a living.
"The most important thing is how to encourage them to develop the growing area," said Hung.
The Viet Nam Cotton Corporation and its companies increased the amount they paid for a kilo of cotton from VND7,000 ($0.40) in 2007 to VND9,000 ($0.50) this year. Although the sector had to compensate for losses, it still failed to help growers make substantial profits.
"Cotton has lost its position compared with other crops due to a lack of competitiveness," said Hung.
The corporation cannot set buying price as it must base the price on farmers’ production costs and world cotton prices.
"The import price is lower than the domestic price of cotton, so companies naturally import cotton," said Hung.
Solutions?
According to Vinatex’s Binh, Viet Nam needs about 200,000 tonnes of cotton for domestic textile and garment production each year, however less than 2 per cent is supplied by domestic cotton growers.
He said there were four major reasons leading to domestic cotton growers missing out on more contracts from the textile industry. These hurdles include poor planning in converting land for cotton; a shortage of preferential policies for growers; lack of capital and cotton price fluctuations.
Cotton growers needed further State assistance as the country’s raw cotton production failed to meet the textile industry demands, said Binh.
Binh cited a model to expand cotton growing areas in which growers needed to earmark 70 per cent of land for cotton which would be protected by companies, with the remainder for other crops. "With this model, farmers will not suffer losses due to price fluctuations."
"We are encouraging growers to grow cotton as well as maize and soy beans. Total income is expected to be from VND25 million to VND35 million per ha," said Binh.
The cotton institute’s Hung said Viet Nam did not have the cotton production advantages enjoyed by the US, China, Australia and several middle Asian countries, as Viet Nam’s technology in the sector was largely poor and outdated.
Hung said the State should issue incentives including funding for research and supply of seeds and compensation for growers who suffer.
Vinatex has set a target to develop the cotton sector to productivity of 40,000 tonnes of raw cotton by 2015 and 60,000 tonnes by 2020, with an expectation to ensure security of materials for the textile and garment sector and meet 10-15 per cent of the country’s demand in the future.
Cotton cultivation will focus on areas in Binh Thuan, Ninh Thuan, Gia Lai, Phu Yen and Dak Lak provinces.
Binh said with Government assistance, the cotton sector would carry out policies on supplying seeds, transferring technology and sharing risks.
"If we can systematically implement solutions, we can lure farmers to come back to cotton," said Binh.
VietNamNet, Viet Nam News
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