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VietNamNews

Farmer-firm linkups remain elusive despite Gov't efforts

Update: May, 18/2013 - 10:37

Viet Nam is one of the world's premier agricultural exporters, with many items fetching the country more than US$1 billion each in annual exports.— Photo vneconomy

HCM CITY  (VNS)— More than 10 years after the Government unveiled policies to encourage tie-ups between farmers and businesses, the proportion of farm produce sold through such contracts remains modest.

Viet Nam is one of the world's premier agricultural exporters, with many items fetching the country more than US$1 billion each in annual exports. But for the farmers who grow the crops, the lack of stable outlets for their produce is a constant worry.

Realising this, in 2002 the Government rolled out policies to encourage the contractual sale of farm produce, hoping 80-85 per cent of sugarcane, shrimp, tra and basa fish and 15-30 per cent of tea, rice, and fruits will be sold through such collaboration by 2020.

But now only 2.12 per cent of rice, 2.5 per cent of coffee, 9 per cent of tea, and 13 per cent of seafood are sold in this manner.

Nguyen Thi Kieu, deputy director of the Can Tho City Department of Agriculture and Rural Development, said when firms sign contracts with farmers to buy their crop, they must provide seedlings, fertilisers, and other inputs so that farmers get the confidence their crop would be bought.

But not many firms are willing to pay for these up front partly due to their own limited finances, he said.

Besides, they are also afraid of the risks involved in agriculture and so prefer to buy from traders instead, she said.

Analysts warned that the programme is unlikely to achieve its targets if things do not change.

They also said authorities should come up with flexible policies to persuade companies and farmers to establish close links and to help develop the agricultural sector in a sustainable manner.

Le Van Banh, director of the Cuu Long (Mekong) Delta Rice Research Institute, said the first task is to take measures to set up links between farmers and enterprises.

They do not speak in a common voice now, posing a hurdle to signing contracts and ensuring compliance with their provisions, he said.

Authorities should provide farmers legal counselling with regard to signing contracts.

They should also help farmers borrow from banks and buy agricultural insurance.

They should have policies to attract investment in the sector and subsidise the construction of rural roads, irrigation and power networks, waste-treatment systems to benefit companies that build processing and other facilities, he said.

In addition, it needs to have a flexible policy in providing loan for enterprises active in the agricultural sector, he said.

However, signing contracts to buy rice is becoming popular in southern Dong Thap Province, with companies tying up with farmers to buy their harvests from 22,000ha or more than 10 per cent of the total area under the crop.

Local authorities monitor the execution of these contracts, and act as arbiters in case of disputes. — VNS



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