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Vietnamese rice as good as Thai, but sells for much less

Update: August, 28/2012 - 08:56

Professor Vo Tong Xuan, a top agricultural expert, spoke to the Thoi bao Kinh Doanh (Business Times) about new regulations on rice exports that are raising concerns among domestic growers.

The Government's Decree 109, which took effect since early 2011, aimed to better assure benefits for rice enterprises, farmers and traders. However, not much improvement has been seen in this area. What is your opinion about this?

Government Decree 109 was aimed at curbing rice traders who purchase and re-sell rice products for profit or export low-quality rice, causing loss of prestige for Vietnamese rice.

However, the main reason for the problem, in my opinion, is that we have yet to successfully build a trademark for Vietnamese rice. Our rice has the same quality as Thai rice, but its price per tonne is always between US$7-20 lower than Thai rice.

I have proposed priority on promoting the development of agricultural value. For example, rice enterprises need to work with farmers to get the best quality rice with competitive prices, which can be done by choosing the most suitable varieties of rice.

These enterprises, with the support of modern machines, will process rice and help develop a strong brand domestically and internationally.

In reality traders collect rice from a variety of sources, mix it together, process it in a cursory manner and sell it to export enterprises. Even large export enterprise such as Vinafood Corporation collects rice from traders when it is needed.

Thus, there are more than 200 rice export companies in Viet Nam, but none of their rice products have a strong trademark in the international market.

I have attended many international conferences at which rice import enterprises make a point of saying their rice does not mix different varieties together. Vietnamese enterprises still have to collect additional rice due to a shortage of rice from official raw materials rice zones.

I believe that to develop raw material rice zones via the value chain, as I have proposed, is a sustainable and long-term solution.

According to the Ministry of Planning and Investment's strategy, in the near future, the State will give special support to 30 rice enterprises with the largest export output during the past three years as a way of curbing substandard rice export enterprises. Do you think this is a satisfactory decision?

It is necessary to consider the criteria of selecting these 30 enterprises. What if the 31st enterprise also meets the requirements?

I think the most important thing is that any export enterprise needs to have their source of materials, register their trademark and have facilities to store and preserve rice properly.

Most enterprises make a profit by purchasing and re-selling rice. What risks are they likely to face when switching to raw material rice zones?

Enterprises only face risks in case of natural disasters. I think they also need to study ways to ensure they are protected against outbreaks of disease.

We are experimenting with Global Good Agricultural Practices (Global GAP) in southern Long An Province. Enterprises are in charge of supplying high-quality fertiliser and other chemicals to farmers at no interest rate. A joint stock company will be established and sell stocks to farmers. They will become shareholders of the company. This will increase good faith of farmers towards enterprises. Both of the two sides need to trust each other.

I like the way Japanese farmers sell their crops. They said they always cultivated their crops as planned because authorities had studied the issue carefully and farmers would have the right to make a claim in case of crop failure.

I think to attract enterprises to switch their investment to raw material rice zones, they should be allowed to export when they secure contracts with overseas buyers. Many enterprises can hardly export their products due to the priority given to the Vinafood Corporation. — VNS

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