VietNamNet Bridge – The Ministry of Agriculture and Rural Development (MARD) has raised the doubts about the sum of 38 trillion dong disbursed to catfish farmers reported by the State Bank of Vietnam (SBV).

The agriculture ministry has sent a document to Deputy Prime Minister Hoang Trung Hai, requesting to check the outstanding loans of 38 trillion dong reportedly disbursed to the seafood industry in the first nine months of 2012.

The ministry said that if the sum of money had been really lend to farmers and processing companies, the number of households which had to give up farming and the number of processing factories incurring losses would have been much lower.

Minister of MARD Cao Duc Phat said at the meeting between the Vietnam Association of Seafood Exporters and Producers (VASEP) that he received a report from the central bank showing that 38 trillion dong have been lent to the catfish industry by the end of September 2012.

The report clearly pointed out that the sum of money has been disbursed to 6000 catfish farmers and 250 processing companies. The outstanding loans provided since August 8, 2012, the day when the Prime Minister released the instruction on the credit policy on seafood and husbandry industries, has reportedly reached 10,300 billion dong.

However, VASEP’s Deputy Chair Duong Ngoc Minh has immediately denied the figure, saying that it’s necessary to check the figure.

“A similar meeting was gathered in February 2012, where the State Bank said 19 trillion dong had been lent to the catfish industry. Seven months later, the outstanding loans jumped to 38 trillion dong, an unbelievably high figure,” Minh said.

“If farmers and enterprises could receive the loans, they would not have to bargain fish and give up farming,” he added.

Analysts have also said that the high disbursed money proves to be unreasonable. In the eyes of bankers, catfish is now considered a risky sector like the real estate sector; therefore, catfish farmers are not the borrowers the bankers want.

According to Minh, in 2012, 70 percent of fish materials was farmed by enterprises, while the other 30 percent provided by households.

The farming households with good financial capability would not contact banks for loans, but would keep farming with their own money. Meanwhile, small households could not satisfy the requirements by banks to access bank loans.

“Therefore, I could not believe that 6000 households have successfully borrowed money from banks,” Minh said.

The report also said that 250 seafood processing enterprises obtained bank loans. However, Minh said, Vietnam only has some 70 processing enterprises, of which 30 percent has become nearly dead.

Regarding the outstanding loans of 10,300 billion dong disbursed after the Prime Minister’s instruction, Minh said, the actual figure would be no more than 20 percent of the reported sum.

MARD has confirmed that the outstanding loans reported by local authorities and associations are much lower than the ones reported by the State Bank.

The ministry has requested the government to take urgent actions to rescue the catfish industry, or it would die. At present, though the demand for catfish increases by a little on Christmas season, the catfish prices are still too low to bring profits to farmers.

After the information about a bailout to rescue the catfish industry, the tra price slightly moved to 22,300 dong per kilo. However, the prices have later dropped to 21,700 dong per kilo, with which, farmers are incurring the loss of 3000 dong per kilo.

Lao Dong