VietNamNet Bridge – Under amendments to a draft decree on rice-export companies (Decree 109), Viet Nam would allow no more than 150 rice-export firms to operate.

And any firm failing to export 10,000 tonnes of rice annually for two consecutive years could have its licence revoked, it said.

The Government has approved in principle a draft made by the Ministry of Industry and Trade. It asked the ministry to give priority to companies having rice fields or working in close co-operation with farmers. It also asked that the licence be limited to rice exports.

And the new regulation actually aims at encouraging exporters to co-operate with farmers in rice production, said Tran Thanh Hai, deputy head of the Import-Export Department under the Ministry of Industry and Trade.

However, Tran Thanh Van, deputy general director of Gao Viet Company, said the regulation was a difficult requirement and just few exporters could meet the requirement.

He said exporters had many difficulties seeking customers and markets and the new regulation meant exporters must do farmers' work.

He said exporters would find it difficult to approach farmers and production teams to develop rice fields.

The regulation meant exporters would have the responsibility for the production and consumption of rice, reduce the number of intermediaries and ensure the interests of farmers were maintained, said rice expert Vo Tong Xuan.

However, Pham Van Bay, deputy chairman of the Viet Nam Food Association, said the association appreciated the regulation, but, at the same time, said the State should not ask exporters to comply. The association suggested that the State encourage the firms to co-operate with farmers.

The Viet Nam Food Association said over past years, Viet Nam has had up to 280 companies exporting rice.

The new regulation meant that large enterprises could export directly, while smaller firms would become trading enterprises providing rice to exporters.

However, the decree would also enable large enterprises to export the rice of smaller firms, or cease operation. This can cost up to $20 per tonne.

Vu Huy Hoang, Minister of Industry and Trade, said he would work with the Ministry of Agriculture and Rural Development and the Viet Nam Food Association, to solve the situation.

In the first seven months this year, Viet Nam exported 4.22 million tonnes, earning US$1.88 billion. The exports declined year-on-year by 11.3 per cent in volume and 13 per cent in value.

Source: VNS