Vietnam: Rice farmers' income drops by seven times in last 10 years

29.03.2017

Vietnam, the second largest rice exporter in the world, is facing big challenges.

The income of farmers has dropped by seven times in the last 10 years, while exports face barriers set by import countries.

With the output of 4 million tons, An Giang is the biggest rice producer among 13 provinces in Mekong Delta. Despite great efforts made by the provincial authorities and farmers and new production models, rice production there is still in fragmented. And while the output is high, the quality is low.

This is the common situation of rice production in the Mekong Delta which now produces 90% of total rice exports of Vietnam. The problems faced by the delta could get worse with protectionism and technical barriers set by many import markets.

Why does Cambodia still have global strong rice brands, though it began exporting rice later than Vietnam by 15 years? Prime Minister Nguyen Xuan Phuc asked at a recent conference discussing solutions to the sustainable development of rice production in Mekong Delta. What are the major problems of Vietnam's rice production? Are there embezzlement and wrongdoings in production?

Analysts say there are two major problems. First, the problems related to administrative procedures.

Pham Thai Binh, general director of Trung An Hi-tech Agriculture, complained that rice exporters have to follow a lot of complicated procedures and satisfy many requirements in terms of storehouses and material growing areas to obtain licenses for rice exports.

However, the licenses are not enough. After signing export contracts, businesses will have to obtain approval from the Vietnam Food Association to get customs clearance for their exports.

Second, Vietnam now has to compete with many other rice exporters in the world market.

Bui Thi Thanh Tam, general director of Vinafood 1, said Thai exporters won the bid to provide rice to the Republic of Korea at the price of US$340 per ton, while Vietnam offered higher price of US$350 per ton.

This shows that the production cost in Vietnam is very high, Tam commented.

Meanwhile, Vietnamese farmers' income stays low. A report showed that Vietnamese farmers earn 2.7 times lower than Thai and 1.5 times lower than Indonesian farmers. After once gaining the highest peak of VND8,000 per kilo of fresh rice, the price has decreased, now hovering around VND5,000.

PM Phuc, while emphasizing that Vietnam needs to stay firmly among the world's leading rice exporters, said it is necessary to increase the production scale by accelerating the process of land accumulation.


world-grain

Readers choice: TOP-5 articles of the month by UkrAgroConsult