VietNamNet Bridge – Firms should be allowed to expand their warehouse capacity so they can stockpile one million tonnes of summer-autumn rice to ensure the Government's programme to purchase rice is a success, say experts.

Mekong Delta localities have started to harvest the summer-autumn rice crop with an estimated output of 9 million tonnes. Authorised agencies are preparing to purchase 1 million tonnes of rice for farmers following the Government decision.

On June 15, several businesses began to purchase rice for storage in the Mekong Delta under a Government programme that aims to ensure that farmers make a deserve income.

This will be carried out after the farmers in the nation's granary have harvested their summer-autumn rice. The programme for this harvest season is a month ahead of previous harvests.

The Government has covered 100 per cent of interest rates on three month loans to assist businesses to buy rice.

Selected by the Viet Nam Food Association, 115 eligible enterprises are taking part in the programme, targeting a varying amount in each province. For example: In Long An Province 91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang between 10,000-15,000 tonnes.

The association said that 12 days after the programme had got underway, businesses had purchased 140,000 tonnes, or 14 per cent of all rice stocks under the temporary stock programme.

However, the large remaining stockpile of winter-spring rice, due to not exporting much rice over the last few months, is a challenge, as the eligible enterprises have not enough warehouse space to store the forthcoming summer-autumn rice.

Nguyen Thanh Huong, Director of Hau Giang Province's Department for Industry and Trade, said that the four provincial enterprises are purchasing quotas for the temporary storage of 15,000 tonnes of rice. Meanwhile, the province is finding it difficult to find warehouses to store the newly purchased rice.

Hung said the State should allow firms that are not members of the Viet Nam Food Association to purchase rice for their own warehouses and also increase the space of warehouses owned by enterprises that are members so they capable to stockpile rice.

In addition, the sales of winter-spring rice still stockpiled will be promoted to ensure enough warehouse space for the next harvest, said Hung.

Nguyen Van Ho, Deputy Director of the Vinh Long Food Company, said the company must sell up to 70 per cent of the rice it has stockpiled to the domestic market to temporarily solve the problem and have adequate warehouse space to store the summer-autumn rice in.

Currently, the company still has 50,000 tonnes of rice to be either exported or sold on the domestic market. However, current export prices are noticeably low at between US$365-370 per tonne while the purchasing price was $400-405 per tonne. So, the company lost $35 a tonne.

Kien Giang's Department of Agriculture and Rural Development said the province still has a huge stockpile of winter-spring rice. However rice export and processing enterprises have received support from the provincial authorities to build a network of warehouse's with the capacity to stockpile up to 104,000 tonnes of rice.

Source: VNS