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Power struggle over catfish
The watchdog agency’s intention to give more power to the VN Pangasius Association, which represents catfish farmers, has been strongly protested by the Vietnam Association of Seafood Exporters and Producers (VASEP). Meanwhile, analysts say none of them should be given the power.
The Ministry of Agriculture and Rural Development (MARD) is compiling a draft decree on catfish culture, processing and export management. Article No. 07 of the draft decree says that all businesses have to register their export contracts with VN Pangasius.
The decree also stipulates that the customs agency will only clear the consignments of exports after confirmation from VN Pangasius.
Businesses have commented that if the draft decree gets approved, VN Pangasius will hold too much power.
Since all businesses have to register their export contracts with the association, it will know the export prices of every enterprise, which allows it to calculate the input material price. If so, it will put pressure on enterprises if it finds that they buy materials from farmers at prices deemed too low, and force them to raise the prices.
In other words, businesses understand that VN Pangasius will have the power to set up the input material floor prices.
Two years ago, the watchdog agency once attempted to impose the input material floor price and floor export price. The watchdog agency wanted to impose the input material floor price to ensure reasonable profits for farmers.
At that time, businesses argued that there was no need to set the floor prices because this would do more harm than good.
The Ministries of Industry and Trade (MOIT) and Finance then pointed out that it would be illegal to impose floor prices, and that the prices needed to be determined by market supply and demand, not by the State.
However, the agency has not “given up the game”. MOIT has once again mentioned the floor price mechanism, but in another way. Businesses would still have to follow the “floor price” principle, though the word “floor price” is not found in the legal documents.
VASEP, which represents seafood export companies, fearing that it may be put out to pasture, has reportedly called on its members to take action to prevent the draft regulation from becoming reality. VASEP believes that the watchdog agency should give it, not VN Pangasius, the power to make decisions on issues relating to catfish culture, processing and export.
While VASEP has shown strong opposition to the draft decree, VN Pangasius is staying silent. Chair of VN Pangasius Nguyen Viet Thang has declined to offer comments on the draft regulation.
Meanwhile, some lawyers have commented that neither VASEP nor Pangasius should be given such a huge amount of power, because neither of them are arms of the state management agency.
vietnamnet
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