“Farmers are incurring losses, and businesses in the catfish exporting sector will accordingly collapse,” VASEP deputy chairman Duong Ngoc Minh said during a meeting with the Mekong Delta Seafood Association.
The meeting was intended to find a way to help the catfish sector, but as every solution is related to money, they all seem impossible as banks have been turning their back on catfish farmers and exporters for years.
“Currently, 30 percent of catfish processors are operating at 70 percent capacity, while 20 percent have completely ceased production, with capital shortage confirmed as the main cause,” said Minh.
Catfish prices rebounded in early April to VND28,000 a kg, but quickly slumped in the following months, according to Lieu Cam Hien, deputy head of the Vinh Long Department of Agriculture and Rural Development.
“Farmers currently incur a VND6,000 loss on every kilogram of catfish as prices have dropped to only VND18,000 a kg.”
Paradoxically, even at throwaway prices, businesses still cannot buy the fish.
“Many catfish farms have been harvested but farmers do not know who to sell the products to,” said Hien.
Confirming the paradox, Minh of VASEP said it is a matter of money.
“Processing plants are facing material shortages, prices are dirt cheap, and there is high demand from the exporting markets, but firms cannot buy fish as there is no capital.
“Banks not only refuse to offer loans but also jostle to collect old debts, sending firms and farmers to the verge of bankruptcy,” he stated.
There are some 3,900 hectares of catfish farms in the Mekong Delta provinces, around 1,300 hectares of which will reach harvest time between June and August, with a total production of 400,000 tons of fish.
Another yield of 700,000 tons will also be taken by year-end.
“Farmers have also run out of capital to buy feed,” said Ho Van Vang, a catfish grower in Vinh Long.
“We can only withstand this hardship for the next two months, after which all farmers will go bankrupt and will never return to catfish farming.”
The Mekong Delta Seafood Association called on the government to release an assistance package to help the catfish exporting sector.
“The State Bank of Vietnam should order banks to create conditions for catfish growers and firms to borrow loans at preferential rates,” said Hien.
“Farmers who fail to sell their fish should be allowed to borrow at 0.65 percent a month,” he elaborated.
The association also urged the Ministry of Industry and Trade to stabilize prices of input commodities for catfish farming.
“There should also be policies to ensure that catfish farmers can have a minimum profit of 10 percent, similar to the 30 percent rate ensured in the case of rice,” it said.
A VASEP representative said the agriculture ministry has submitted an aid package worth VND4.4 trillion to the government.
Catfish growers will receive VND2 trillion as assistance, while the remaining will go to businesses which have linked with farmers to buy their products.
“If approved, the aid will enable exporters to stockpile catfish as rice businesses have been doing,” the spokespersons said.