VietNamNet Bridge – Prime Minister Nguyen Tan Dung has approved a plan to purchase one million tonnes of rice in reserve beginning March 15 in an effort to maintain paddy prices in the local market and help prevent Mekong farmers from incurring losses during harvest time.

Farmers in Vi Thanh Commune, Vi Thuy District, Hau Giang Province sell rice in the field after harvest time.

He made the decision at a conference in Can Tho on Saturday.

Dung also asked businesses to come to rural areas and purchase farm produce directly from farmers.

He emphasised the importance of accurate business forecasts to prevent rice prices from plunging and said more attention should be paid to researching higher quality and higher yield rice varieties.

State and Government agencies will issue more policies to support the agriculture sector, invest more in infrastructure and human resources development and offer more employment opportunities to residents in rural areas, he added.

He also asked Mekong provincial authorities to support effective rice production and selling models and encouraged these localities to convert low-yield rice production areas to growing other crops, like soybeans and maize.

The Ministry of Trade was told to launch promotion programmes to seek new markets for Viet Nam's rice. In an effort to improve rice quality, firms that fail to meet the conditions for rice export will not receive business licenses, Dung said.

He also told the State Bank of Viet Nam to lower lending interest rates for agricultural production and other prioritised sectors.

Since early March, paddy prices in the Mekong Delta dropped to VND4,400 - VND5,300 per kg, falling by VND400-500 per kg from February.

At the conference, the Central Bank pledged a credit package of VND8 trillion (US$376 million) for businesses involved in purchasing rice for reserve, in addition to loans with preferential interest rates (seven per cent per year for two- to three-year loans) for enterprises involved in large-scale rice production, aqua-culture processing and exports and the application of advanced technology.

According to the Ministry of Agriculture and Rural Development, the Mekong Delta is estimated to produce roughly 8.6 million tonnes of commercial rice this year, including 4.3 million tonnes in the 2013-14 winter-spring crop.

Participants at the conference also pointed out challenges that the country's rice sector faced, including the fact that market developments were unpredictable after Thailand's recent announcement that it would sell up to 20 million tonnes of stockpiled rice.

Source: VNS