VietNamNet Bridge – Thousands of farmers living in the buffer zone of U Minh Forest in southern Kien Giang Province are in debt as rice cannot grow well in the high-alum soil there.

"Each 1,000sq. m. yields only 100-140kg. It is insufficient for our food needs," he said.

Normally, each 1,000sq. m in other areas in the Cuu Long (Mekong) Delta produce around 900kg of rice.

Chuong said he had lost the capability to pay for the loan, which was taken out 10 years ago.

"I took out the loan of VND29 million (US$1,400) to expand production, but I have failed to pay it back to the bank, including monthly interest," he said.

Farmer Tran Van Nam said he had no money to pay back the loan, and was forced to take out other loans from individuals to prepare for a new crop.

The farmers resettled in the buffer zone 11 years ago, following a proposal by local authorities in 1999 to develop the economy there.

They said they were supported by bank loans, but rice and sugarcane cultivation had low yields because of the poor land and bad weather.

However, cajeput growth was good, but at the time of harvest, the price of the wood for construction materials dropped sharply, causing losses.

Authorities in Minh Thuan Commune, which is based in the buffer zone, said families there were in debt to banks, with an average amount of VND60 million ($2,800) or even VND100 million ($4,800) of debt.

However, many families can earn just enough for their food every day.

Nguyen Viet Hung, deputy chairman of the commune, told Tuoi Tre (Youth) newspaper: "The loan amounts have been doubled because monthly interests have not been paid."

Six thousand farmers in U Minh Ha's (lower U Minh) buffer zone are in debt as well.

Nguyen Thi Kim Lien, deputy chairman of U Minh Ha District People's Committee, said banks in the district had agreed with the committee to permit families in or near the poverty line to pay the loan principal only.

For other families, banks will permit the repayment of principal and monthly interest, but exempt the over-term interest.

Lien said there were 1,100 families in debt with a total of VND32 billion ($1.5 million) of loan principal and VND41 billion ($1.9 million) in interest.

In U Minh Thuong (upper U Minh), there are 32,000 families with a total debt of VND76 billion ($3.6 million).

Ly Nam Hai, director of Ca Mau Agribank, said the bank would consider exempting the families with difficulties from over-term interest and deduct 20 per cent of the total monthly interest.

The families had been encouraged to pay the initial loan amounts first, then the interest later, Hai said.

VietNamNet/Viet Nam News