VietNamNet Bridge - Five big rice exporters, including Thailand, India, Vietnam, Pakistan and the US, are all under the influence of new economic circumstances. However, Vietnam is the only country which has seen exports fall.

Huynh The Nang, chair of the Vietnam Food Association (VFA), said the current conditions do not support rice exports. First, there is an abundant world supply. Second, the prices are getting more competitive. Third, some new rice exporters have turned up such as Cambodia and Myanmar. Fourth, rice importers are now following self-sufficient food policies. 

However, an analyst pointed that the factors have had an impact on all the countries involved in the global rice trade, not only Vietnam. 

Vietnam even has advantages over other exporters. Vietnam’s rice is believed to have the most competitive price. Vietnam’s 5 percent broken rice is priced at $330-340 per ton, which is only more expensive than Pakistan, which sells at $310-320 per ton.

Experts believe that unreasonable policies are behind the unsatisfactory rice export performance. 

Nguyen Van Sanh, head of the Mekong River Delta Research and Development Institute, noted that rice cultivation and export are covered by 200 legal documents with overlapping content and unreasonable regulations which hinder the normal operation of links in the supply chain.

Pham Thai Binh, director of Trung An Company in Can Tho City, discussing the unreasonable policies for the rice industry, mentioned the Prime Minister’s Decision No 68 on the policies to help ease losses in agricultural production.

Binh said the decision only benefits farmers, while export companies cannot enjoy any benefits.

In order to implement the large paddy field model, i.e., the agricultural production mode under which businesses are responsible for farmers’ rice consumption, businesses have to make heavy investment to develop dryer systems to ensure product quality. Meanwhile, they don’t receive support from the State.

“It is enterprises which have to spend money on processing machines, not farmers,” he said.

The State Bank of Vietnam has committed that the banking system would give financial support to implement the large-field model. However, it is still difficult to access banks loans. 

Investors who develop the large field model in Can Tho City, for example, only get money disbursed for the projects in Can Tho, not in other localities. 

Regarding rice exports, Dr. Nguyen Duc Thanh from VEPR, an economic policy research institute, pointed out that the government Decree No 109, since the day it took effect, has weakened the competitiveness of Vietnamese rice exporters.

The decree, which has many strict requirements on rice exporters, only allows a small number of enterprises to export rice. 

TBKTSG