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Expert calls for prompt rice export management mechanism adjustment
Professor Doctor Vo Tong Xuan, a leading agriculture expert, has called for a prompt adjustment of the rice export management mechanism, which he believes has a lot of problems.
He said:
The Vietnam Food Association (VFA) is just an association, but it has too much power: It can grant rice export quotas to enterprises, but it does not know the production situation and the rice output of every locality.
There are also problems in allocating rice export quotas. Most export quotas have been granted to two food corporations (the North and South Food Corporations – reporter), while the two corporations do not have farmers and rice growing fields. Some provinces have been granted big quotas while they do not have high rice outputs, while provinces with big outputs have been not allowed to export a large quantity of rice.
Some experts say that the currently applied rice export quota allocation has caused big advantages to both farmers and enterprises. What do you think about that?
Rice export quota allocation has been undertaken by VFA. The two food corporations always get high quotas. Meanwhile, enterprises which are located right at material-growing areas only get quotas for modest export volumes.
As the enterprises do not have quotas for export, they do not collect paddies from farmers. Only the two food corporations purchase paddies from farmers after they get quotas. That explains why the paddy price in the Cuu Long River Delta greatly depends on the prices the two corporations set and the time the two corporations begin collecting paddies. That is one of the reasons that rice prices are unstable. The price ups and downs have made farmers suffer and farmers’ profit remains modest.
How about enterprises?
As enterprises get low quotas and they fear an export ban can be promulgated at any time, they cannot take initiative in expanding markets and seeking partners. Also because enterprises do not know what kind of rice customers need, they cannot cooperate with farmers to grow sustainable material areas.
Enterprises only begin collecting material rice when the delivery deadline nears. As rice comes from different sources, the quality of rice is not the same. Therefore, though being a big rice exporter, Vietnam still does not have a brand name for its rice.
How do you think Vietnam needs to amend the rice export mechanism?
I think that we need to amend the problematic rice export management scheme. VFA needs to return to the function of a professional association, seeking and providing information to enterprises and acting as a bridge between enterprises and customers.
The Ministry of Industry and Trade together with the Ministry of Agriculture and Rural Development and local authorities’ leaders need to undertake the job of allocating rice export quotas after considering forecast figures about rice output. As local authorities well know their rice output, they should be given the right to propose the rice export quotas for their provinces.
Deputy Prime Minister Hoang Trung Hai in a recent meeting said that the rice export quota allocation will be stopped, is this true?
I agree with the viewpoint that we need to remove the quota allocation scheme. We should do what Thailand has been doing. Thai Ministry of Commerce has been very good at forecasting. It makes public the yearly rice export volume, and then collects rice from farmers at prices which ensure profit for farmers. The rice is later sold to enterprises which have export contracts. Enterprises just need to contact the distribution division of the ministry. With this management method, the country can ensure food security, ensure profit for farmers, while encouraging enterprises to expand markets.
Nguyen Van Duong, Director of the Dong Thap Department for Agriculture and Rural Development: It is necessary to allocate quotas based on rice output:
Dong Thap province puts out 2.7 million tonnes a year, but only two enterprises get export quotas (300,000 tonnes of rice). I agree with Deputy Prime Minister Hoang Trung Hai that it is necessary to adjust the rice export management scheme, while assigning the Ministry of Industry and Trade to form a taskforce on rice export management, which includes representatives of the Ministry of Agriculture and Rural Development and local authorities.
The rice export quota allocation should be based on the rice outputs of provinces. Those provinces which have higher outputs should be granted higher quotas for exports, while we should not focus on big corporations.
VietNamNet, TT
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