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Farmers face onslaught of unfair practices

Update: July, 16/2012 - 10:56


Trucks carrying watermelons for export are stuck at Tan Thanh Border Gate in the northern province of Lang Son. — VNA/VNS Photo
HA NOI — Lack of market information, resulting in abundant production of some agriculture products in localities nationwide, recently has raised warnings over Viet Nam's management policies of foreign traders.

A drastic change in the trade strategy of foreign traders, mostly Chinese ones, caused many Vietnamese farmers and enterprises to suffer losses, said member of the National Assembly Committee for Social Affairs Dang Thuan Phong as quoted in Thoi bao kinh te Viet Nam (Viet Nam Economics Times)

He gave the example of the coconut exports turnover in the Mekong delta province of Ben Tre in the first five months, which was just 20 per cent of that in the same period last year.

In southern Vinh Long Province, many farmers who grow Japanese sweet potatoes are facing losses because of the price decline; the current price is one-fourth of last year's price.

According to the province's Department of Agriculture and Rural Development, of the 9,255ha of sweet potatoes in Vinh Long, 70 per cent are of the Japanese sweet-potato variety. Previously, Chinese traders bought about 500-600 tonnes of Japanese sweet potatoes a day in Vinh Long but now the traders' purchases have dropped by 40-50 per cent, according to local traders who used to sell sweet potatoes to the Chinese agents.

Phong said that in both cases, farmers with large quantities of farming products in stock were forced to sell at lower prices right in their fields. So, he urged measures to better protect Vietnamese farmers in the game with foreign partners.

Similar situations happened to growers and enterprises with other farming products, including rice and pineapple.

Minister of Industry and Trade Vu Huy Hoang said that under Viet Nam's Law on Commerce, foreign traders without business entities in Viet Nam may not collect or purchase products for import /export if they do not establish trade relations with domestic enterprises that will directly do business activities.

To those which have business entities in Viet Nam, such as FDI companies with business licences or foreign companies which establish branches in the country, they still need Vietnamese enterprises to work with domestic farmers and producers.

It was illegal if foreign traders came and directly participated in the collection and purchase of farming products, Hoang said, adding that the violations were found in some localities.

The minister also said that due to improper information about the Chinese market, farming products were, in some cases, transported to the borderline but Chinese partners refused to import or only accepted to pay low prices.

He urged local authorities, enterprises and farmers to inspect and report violations for timely warnings and punishments.

He also said that the country would improve legal framework relating to activities of foreign businessmen in Viet Nam.

Early this week, Prime Minister Hoang Trung Hai asked the Industry and Trade Minister to compile a circular about the trading of farming products by foreign traders in Viet Nam.

The circular expected to be completed this quarter, will help authorities better oversee and prevent violations affecting domestic farmers and enterprises in trading with foreign traders.

Researcher Tran Cong Thang, head of the Strategy and Policy Research Division,under the Institute of Policy and Strategy for Agriculture and Rural Development, said that since the ASEAN-China Free Trade Agreement was signed in 2004, th import value of Vietnamese farming produce to China has increased with an average yearly growth rate of 19.27 per cent.

As China was a major importer of Viet Nam's farming products such as rubber, cassava, and fruit, heavy reliance on the Chinese market brought negative impacts to domestic market, Thang said.

He noted that in the last few years, Chinese traders penetrated the domestic market to seek and purchase farming products while previously, Vietnamese traders usually transported the products to the borderlines and sold to Chinese traders.

"The penetration sometimes throws the domestic market out of control as prices are pushed up and farmers are lured to produce to meet a higher demand," he said, adding that farmers in many cases suffered losses because of declining demand.

Moreover, it also posed tougher competition to domestic traders, he said.

He recommended that a timely and careful study of Chinese market was crucial to avoid oversupply.

"Viet Nam needs to diversify and improve the quality of products for export to reduce its reliance on China's demand and better access other markets," he said. — VNS

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