Farmers are pleased as the Vietnam Food Association (VFA) has this year requested rice exporters to announce the location of collection sites via the media.
|Local residents trade rice in the Mekong Delta. The VFA has said it will hold a press conference in the near future to announce plans to purchase rice for farmers.|
The VFA has said it will hold a press conference in the near future to announce plans to purchase rice for farmers.
Prime Minister Nguyen Tan Dung has ordered the Ministry of Finance to stockpile an additional 50,000 tons of rice for national food reserves. Following the Prime Minister’s order, around VND30 billion (US$1.59 million) from the state budget will be spent on purchasing the grain. The move is expected to both ensure food security and stabilize the rice market.
The winter-spring rice crop in the Mekong Delta worried farmers and enterprises about whether they could sell the grain at high prices. They are now placing hopes on the VFA to effectively manage the situation.
Rice is currently selling at around VND3,800 per kilogram and it is hoped prices will increase after the VFA purchases 1 million tons and its 30-member enterprises follow suit, said VFA Deputy Chairman Pham Van Bay.
Meanwhile, VFA Chairman Truong Thanh Phong said foreign countries will only officially state how much rice they need in May and June, thus leaving enterprises anxious to consume the winter-spring crop. However, the VFA has promised to buy rice at a minimum of VND4,000 per kilogram for dried unhusked rice for farmers.
Rice exporters fret that if they stockpile goods too long, they will have to pay high bank interest rates from 14-18 percent a year, but they are unclear as to whether they can sell it.
Deputy Industry and Trade Minister Nguyen Thanh Bien has reassured them, saying the government will support exporters and promised that a draft decree to prevent dumping would be issued soon when Nguyen Tan Son and Le Minh Truong, directors of the An Giang Tourism Join-stock company and Hau River Food Company respectively, warned that some enterprises dumped rice.
Mr. Bien said any enterprises selling rice at lower than the set minimum would face a fine and that repeat offenders were liable to have their business licences revoked.
It is encouraging news for many that the VFA will buy rice at minimum price of VND4, 000 to ensure profits for farmers, yet concerns remain as to how rice prices will be estimated to guarantee that farmers see profits.
Vuong Binh Thanh, deputy chairman of the People’s Committee in the Mekong Delta province of An Giang, proposed enterprises buy rice at VND4,200 per kilogram while Deputy Agriculture and Rural Development Minister Bui Ba Bong said his ministry wanted an individual company to estimate rice prices strategically.