Mr Dung made the request at a working session with the Northern and Southern Food Corporations in Hanoi on March 4 to examine the domestic rice supply and rice export plans for 2009.

He asked the two corporations to draw lessons from the galloping price of rice and the purchase of the summer-autumn rice last year, that prompted the government to adopt immediate measures to stabilise the market.

As food is becoming a global issue, Vietnam should raise the efficiency of rice production to ensure national food security and increase farmers’ incomes, said Mr Dung.

The two corporations, which make up 91 percent of the country’s rice market share, said that their rice storage depots are not large enough to meet the requirements for rice purchase and reserves. In addition, they said high transport costs lower the competitiveness of Vietnamese rice for export as well as farmers’ incomes.

They proposed that the Government lend them VND2,500 billion to expand the storage system and build a seaport complex in the Mekong River Delta, a rice trading floor in Can Tho City and a rice bonded warehouse in the Philippines with a capacity of 1.7 million tonnes per year. They also proposed increasing rice exports in key markets including Iraq.

The Ministry of Industry and Trade reported that by the end of February, businesses signed contracts to export more than 3.6 million tonnes of rice, a three-fold increase compared to February 2008.

The banking system supported businesses by offering them credits at preferential interest rates. Notably, the Bank for Investment and Development of Vietnam (BIDV) signed a credit programme worth VND6,000 billion with rice export companies and pledged US$500,000 for trade promotion activities and credits on deferred payment.

PM Nguyen Tan Dung praised the two corporations’ efforts in ensuring national food security and reserving a large volume of rice for export, making Vietnam the second largest rice exporter in the world.

However, he said the two agencies have not yet developed market awareness of their brands or fully exploited the close links between the State, businesses and farmers.

He assigned the BIDV to lend VND2,500 billion at preferential interest rates to the two corporations to complete the building of rice storage depots in 2009 and 2010.

He also asked the two leading food corporations to go ahead with their projects to build key rice markets, develop brands, and balance the supply and demand of rice to export approximately 5 million tonnes this year while keeping a close watch on the market to avoid speculation.

VietNamNet/VOV