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Stable market to benefit all

Update: May, 03/2013 - 09:48

Phung Duc Tien from the National Assembly Committee of Science, Technology and Environment talked with Thoi Bao Kinh Te (Viet Nam Economic Times) about steadying agricultural product prices.

It seems that the ongoing efforts to stabilise the prices of agricultural products have relied on an inefficient bottom-up approach. What are your thoughts on this?

I think price stabilisation is definitely not an easy task, so we need to go about it in an efficient and systematic way. We have mostly done this under the "formalism" mindset.

Price stabilisation for agricultural products should not be done according to seasonal demand but with a long-term vision. These efforts should be combined with increased investment in processing technology for agriculture, forestry and aqua-products, promoting trade and expanding market opportunities.

Currently, domestic businesses have already engaged in high-end production segments such as rice, aquatic products, coffee and rubber. However, our processing technology is quite outdated. Therefore, 70 per cent of our exported agricultural products are raw materials.

Besides, given the low quality and unstable supply of raw materials, we need to invest more in the value-added chain and integrating with the global supply chain.

We need to see price stabilisation as a long-term effort. If we don't, we will struggle every year to stabilise prices but fail to escape the harsh reality that even with bumper crops, depreciation occurs.

What kind of price stabilisation measures do we need to apply?

The supply of agricultural products is determined largely by seasonal demand, the weather and the occurrence of disease epidemics.

Our farmers currently have to buy input materials at a high cost. And when harvesting their products, they are often forced to sell them for low prices in the market. Therefore, we need to think of a way to stabilise the prices of input materials for agricultural production.

There are many stakeholders in the agricultural production supply chain and price stabilisation must ensure benefits for each stakeholder. For example, if the price of seeding increases, which affects production, price stabilisation efforts must help the producers as well as the processors and the consumers. Price stabilisation must take into account the intricate relationships that exist between all stakeholders.

What are the existing problems with the current price stabilisation policies for agricultural products?

I think we have not protected both producers and consumers. For example, in many years, diseases and unusual weather have caused great losses to agricultural producers. However, even when the prices of agricultural products increase, price stabilisation can hurt producers if not done carefully and only benefit consumers.

Besides, determining the price of high-technology agricultural products must be done in a way that encourages the application of technology in agricultural production.

In addition, provincial People's Committees should determine prices and set up price stabilisation in a small area with clear guidelines. Otherwise, there could be unexpected effects in the market. — VNS


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