Farm produce prices escalating, but farmers cannot pocket profits

Published: 11/05/2011 05:00

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The prices of
farm produce such as rice, coffee and pepper have been escalating, but farmers
do not benefit from the price increases.

Farmers are the “outsiders”


According
to Professor Vo Tong Xuan, a well known agricultural expert in Vietnam,
though the rice price has been increasing steadily, now selling at 6000 dong
per kilo. Only the farmers who harvest the winter-spring crop late and
summer-autumn soon can get profits, while the ones who harvest the
winter-spring crop soon cannot. Most of the profits have been falling into the
hands of food companies and small merchants.

Le Van
Banh, Head of the Mekong Delta Rice Institute, also said on Thoi bao Kinh te Saigon that though the prices of all kinds of farm
produce have been increasing, farmers do not make profits from the price
increases.

“If Vietnam’s rice
export price goes up to 700 dollars or 1000 dollars per ton in the time to
come, export companies, not farmers will make profits,” Banh said.

Also
according to Banh, once the prices of farm produce like rice or coffee
increase, the prices of food and other input materials for the cultivation of
the new crops have also increased. That explains why the profits from rice
cultivation do not increase in accordance with the farm produce price
increases.

Saigon Tiep
Thi has quoted a source from the Ministry of Industry and Trade as saying that
by the end of April 2011, Vietnamese enterprises had registered to export 3869 million
tons of rice, including 1857 million tons of rice (48 percent) to be exported
under concentrated contracts (the contracts signed between partners based on
the agreements reached by governments).

Meanwhile,
the remaining volume of rice will be exported under commercial contracts. The
registered rice export volume represents the 13.63 percent increase in
comparison with that of the last year. To date, the enterprises have exported
2.293 million tons, valued at 1.091 billion dollars in accordance with FOB
prices.

Do Ha Nam,
Deputy Chair of the Vietnam Coffee and Cocoa Association and Chair of the
Vietnam Pepper Association, also said that at the conference on reviewing the
2011 pepper production crop held some days ago, that the coffee prices have been
increasing; but, this has not brought big profits to both enterprises and
coffee growers.

Enterprises
lack capital to collect coffee from farmers when farmers harvest the crop,
while farmers have to sell coffee immediately to small merchants, because they
need money to pay matured debts. The farmers had to borrow money to cultivate
coffee, and they sometimes had to purchase fertilizer and fuel on credit.

It is
foreign businessmen, who can enjoy fat profit from the coffee price increases.
Thanks to the strong financial capability and experience on the international
market, they well know when they should spend money to collect coffee and when
to sell coffee in London and New York to get profits.

“Vietnam is the
second biggest coffee producer in the world, but it cannot control the prices
in the world market. Therefore, when the coffee price increases, Vietnam does not get much profit,” Nam said.

Experts urge to reconsider
cooperation

According
to Banh, it is necessary to reconsider the cooperation among the State, the
scientists, enterprises and farmers in the production and distribution chain.

He said
that though Vietnam
is the second biggest rice exporter, it still does not have a Vietnamese rice
brand. Vietnam
is only exporting 5 percent and 25 percent broken rice. Enterprises mix
different kinds of rice and sell rice under the name of “white rice”.

Banh
complained that rice export companies never contract his institute to ask the
institute to create new varieties of rice.

“Since
enterprises do not support scientists, we have to rely on the state budget to
create new varieties, but we do not know if the new varieties can be used. If
the new varieties are not put into the production, the efforts by scientists
will become in vain,” Banh said, adding that it is necessary to reconsider the
cooperation of the four involved parties in the rice production and
distribution chain.

C. V

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