High-grade paddy types have yet to prove their advantages as their prices are barely higher than low-grade categories, and profits even lower than the popular low-grade rice IR 50404.

Therefore, farmers in the Mekong Delta are still growing the low-grade rice strain as long as there are markets for the farm produce.

IR 50404 more “tasty” than high-grade rice

Farmers are disheartened by high-quality rice prices, which are only VND50-100 higher than prices of IR 50404 even though the production costs are much higher. IR 50404 is mainly used for processing the lower-grade 25%-broken rice.

Nguyen Van Chieu, a farmer in Thap Muoi District, Dong Thap, said growing one hectare of high-grade paddy is some VND1.0-1.5 million costlier than producing low-grade rice.

“The high-grade rice takes 7-10 more days to ripe compared to the low-grade rice, requiring spraying pesticide once more, not to mention that high-grade paddy types are more susceptible to pests, so costs are higher,” Chieu stated.

According to rice traders at Ba Dac wholesale market in Tien Giang’s Cai Be District, the low-grade paddy IR 50404 is currently sold at VND5,000-5,050 per kilo for the fresh type and VND5,600-5,700 for the dried type. Meanwhile, high-grade paddy categories like OM 4218, OM 5451 and OM 1490 is priced at only VND50-100 higher, or VND5,100-5,150 for the fresh paddy and VND5,560-5,750 for the dried one.

Encouragement is not enough

In recent years, at the beginning of each rice crop, the Ministry of Agriculture and Rural Development often encourages farmers to limit the area of low-grade paddy cultivation. In particular, the ministry recommends 20% of the total rice growing area is used for low-grade rice farming, 10-15% for fragrant rice, and the remainder for high-grade rice.

In fact, farmers participating in joint rice production with traders properly implement the recommendation for high-grade rice cultivation, because the outlets for their products are ensured. On the other hand, free farmers still grow whatever brings them high profits.

The crux of the matter is traders still lack connection with farmers.

Mai Van Quyen, former vice director of the Institute of Agricultural Science and Technology for Southern Vietnam, said: “Rice traders are still bystanders, letting farmers struggle alone without any consumption contract.”

Agronomist Vo Tong Xuan, rector of Tan Tao University in Long An, stated the key point is to provide farmers with forecasts about the consumption power of the market, rather than giving general recommendations.

Moreover, the fact that low-grade rice is well consumed is the reason why farmers prefer this rice strain. Statistics of the Vietnam Food Association (VFA) show that low- and mid-grade rice accounted for over 61% of the total rice export volume in 2011, while high-grade rice only made up 18% and fragrant rice some 6.6%.

It is a must to prove to farmers that high-grade rice will generate more profits for them, so that they will expand the areas of high-grade paddy farming, experts underscored.

Rice price stable at home despite falling export rate

The export price of rice has slightly gone down after a substantial increase late last week while the price in the domestic market has still remained stable.

The offering prices of the high-grade 5% broken rice have reportedly declined by some US$5 to about US$435-445 a ton FOB as recorded by the Vietnam Food Association after rising to US$440-450 a ton in the middle of last week.

Local rice traders and exporters attributed the mild decrease of the offering prices to the slowing demands from importers since last week. Besides, the fierce competition with India which is offering lower prices also led to a fall in export prices.

In the meantime, local rice prices have still remained unchanged thanks to the stability of demands from Cambodia. A rice trader who declined to be named said rice prices in the domestic market have bounced back and stayed stable due to rice export to Cambodia via the country’s border gates.

Speaking with the Daily, Duong Van Men, a rice trade in Lap Vo District in the Mekong Delta province of Dong Thap, said the widening gap between the declining rice supply at home and the rising demand have made prices stable since last week.

SGT