Enterprises have begun purchasing 1 million tonnes of rice for stockpilein the Mekong Delta under a Government programme that aims to ensurefarmers make a profit.
The purchase, carried out at atime when the farmers in the nation's biggest granary have harvestedtheir summer-autumn rice, will last until the end of next month.
The Government has covered 100 percent of interest rates on loans for athree-month term for businesses buying rice. Assigned by the VietnamFood Association, 115 eligible enterprises have joined the programmewith a targeted amount in each province. For example: Long An province91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang10,000 and 15,000 tonnes.
According to leaders of Vinh Hung district of Long An province, farmers have been waiting for enterprises.
The price fixed by the Ministry of Finance is 4,142 VND average per 1kg of unhusked rice.
According to the association, with such a low price, plus difficultiesin export markets, the programme could only guarantee a low profit forfarmers, less than the 30 percent expected by the Government.
Head of the sales department of the Dong Thap Food Company, Dang VanKhuong, told Radio The Voice of Vietnam (VOV) that a 30 percent profitcould only be gained if the unhusked rice was sold at 5,400 VND.
Minister of Agriculture and Rural Development Cao Duc Phat has alsoadmitted it was a problem, but it could not be settled during theeconomic downturn.
Other support policies will be worked out to help both businesses and farmers, he said.
For example, a special preferential credit programme would be provided to farmers so they would stockpile their products.
But in the long run, he said, there must be stable contracts signedbetween the two sides to ensure an outlet for farm produce, particularlyrice.
The ministry has also worked with localitiesin another programme to encourage replacing rice with other cash cropson poor quality farming land such as maize or soya bean.
Earlier this month, in a meeting to seek solutions to consume farm andaquatic produce, Deputy Prime Minister Hoang Trung Hai requested theassociation guide their business members to buy rice.
Any businesses found to cause damage to the export enterprisecommunity and farmers must be excluded from the association, Hai said.
However, according to many businesses, their biggest challenge was the large stockpile of rice from previous seasons.
Managers of the Docimexco JS Company in Dong Thap province said due tothe fall in the rice price after the stockpile of the lastwinter-spring season, the company still has 30,000 tonnes in storage,despite looking for partners to export the remainder.
Association chairman Truong Thanh Phong assured businesses that the rice market would pick up from July.
The association figures showed Vietnam had exported 2.79 milliontonnes of rice in the first five months, an increase of about 10 percentfrom the same period last year.
In June, some750,000 tonnes are expected to be exported, raising the exported figurein the first half this year to 3.5 million tonnes, 100,000 tonnes upfrom last year's corresponding period.
The purchase, carried out at atime when the farmers in the nation's biggest granary have harvestedtheir summer-autumn rice, will last until the end of next month.
The Government has covered 100 percent of interest rates on loans for athree-month term for businesses buying rice. Assigned by the VietnamFood Association, 115 eligible enterprises have joined the programmewith a targeted amount in each province. For example: Long An province91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang10,000 and 15,000 tonnes.
According to leaders of Vinh Hung district of Long An province, farmers have been waiting for enterprises.
The price fixed by the Ministry of Finance is 4,142 VND average per 1kg of unhusked rice.
According to the association, with such a low price, plus difficultiesin export markets, the programme could only guarantee a low profit forfarmers, less than the 30 percent expected by the Government.
Head of the sales department of the Dong Thap Food Company, Dang VanKhuong, told Radio The Voice of Vietnam (VOV) that a 30 percent profitcould only be gained if the unhusked rice was sold at 5,400 VND.
Minister of Agriculture and Rural Development Cao Duc Phat has alsoadmitted it was a problem, but it could not be settled during theeconomic downturn.
Other support policies will be worked out to help both businesses and farmers, he said.
For example, a special preferential credit programme would be provided to farmers so they would stockpile their products.
But in the long run, he said, there must be stable contracts signedbetween the two sides to ensure an outlet for farm produce, particularlyrice.
The ministry has also worked with localitiesin another programme to encourage replacing rice with other cash cropson poor quality farming land such as maize or soya bean.
Earlier this month, in a meeting to seek solutions to consume farm andaquatic produce, Deputy Prime Minister Hoang Trung Hai requested theassociation guide their business members to buy rice.
Any businesses found to cause damage to the export enterprisecommunity and farmers must be excluded from the association, Hai said.
However, according to many businesses, their biggest challenge was the large stockpile of rice from previous seasons.
Managers of the Docimexco JS Company in Dong Thap province said due tothe fall in the rice price after the stockpile of the lastwinter-spring season, the company still has 30,000 tonnes in storage,despite looking for partners to export the remainder.
Association chairman Truong Thanh Phong assured businesses that the rice market would pick up from July.
The association figures showed Vietnam had exported 2.79 milliontonnes of rice in the first five months, an increase of about 10 percentfrom the same period last year.
In June, some750,000 tonnes are expected to be exported, raising the exported figurein the first half this year to 3.5 million tonnes, 100,000 tonnes upfrom last year's corresponding period.
