VietNamNet Bridge – Rice export companies have got worried stiff when hearing that they would have to develop their material growing areas in order to be eligible for exporting rice.

The Decree No. 109 on the conditions for businessmen to export rice sets up the strict requirements on the minimum rice husking output, capital and storehouse. When it was promulgated two years ago, the legal document faced the strong opposition from rice exporters, who complained that the requirements are too high for them.

However, the decree may be amended soon, and more strict requirements would be set up. Rice experts have many times proposed to set up a new regulation that rice exporters have to have their own material areas to be sure that they have the capability of fulfill contracts and to ensure the reasonable profits for farmers.

Nguyen Van Don, Director of the Viet Hung Company Ltd, said the proposal has once again been put forward at the working session of the officials from the Ministries of Industry and Trade and Agriculture and Rural Development some days ago.

Don said the information has made rice exporters worried stiff. It would be a heavy burden on rice exporters – the trade companies – to carry out the production as well.

Dr. Le Van Banh, Head of the Mekong Delta Rice Institute, believes that it is necessary to ask rice exporters to develop material areas. If enterprises have their material areas, they would be able to control the rice supply sources, while farmers can feel secure about their product consumption. Especially, this would encourage enterprises to upgrade their storehouse systems and become bigger.

Vietnam has kicked off a program on undertaking to buy all the rice from farmers through the large-scale field model. However, Banh noted that only plant protection chemical companies and fertilizer distributors have joined the program, while export companies still stay outside.

Meanwhile, if the 153 existing export companies join the program, and each of them is responsible for the outlet of the rice output of 5,000 hectares, 700,000-800,000 hectares can be surely consumed every crop.

However, the idea has not been applauded by rice exporters. It has even made exporters’ hearts jump. Developing material growing area will mean that rice export companies would have to invest more capital on the production, labor force, technique, and a lot of other things.

The representative of the Saigon Trade Corporation (Satra) also said the idea of setting higher requirements on rice exporters has made the enterprise worried.

He said the rice export is meeting a lot of challenges, and if stricter requirements are set, this may be unbearable to rice exporters.

The Prime Minister in July requested the Ministries of Industry and Trade and Agriculture and Rural Development to consider amending the Decree No. 109, emphasizing the need of associating the export with the production and processing.

Some other requirements are also expected to be added into the Decree 109. For example, rice exporters may have to export over 10,000 tons a year at minimum in the last two consecutive years. However, Don of Viet Hung Company said the requirement will not put difficulties for his company which exports 70,000 tons of rice every year.

TBKTSG