Central Highlands get crazy because of coffee companies’ insolvency

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VietnamNet English - 34 month(s) ago 4 readings

Central Highlands get crazy because of coffee companies’ insolvency

VietNamNet Bridge – The “insolvency storm” has been raging throughout the Central Highlands, putting farmers in poverty and making them bare of money. It would take local residents a long more time to pick them up.


Vietnamese businessmen attempt to sell 2 coffee brands to Chinese


Villages get ragged because of insolvency

Two years have gone since the “coffee storm”, but farmers in Cu Dile Mnong commune of Cu Mgar district in the coffee metropolis province of Dak Lak still have not got up. Most of the motorbike shops, mobile phone, fashion shops or restaurants have shut down because farmers now do not have money to buy goods or services.

Pham Trung Kien, a farmer in hamlet No. 2, said that after losing several tons of coffee to Nga Son agent, he is weighted down with debt. “We now only can afford the basic needs, including meals, studies and healthcare, while all other things prove to be too luxurious. I do not have mobile phone any more,” he said.

Not only Kien, but more than a half of the households in hamlet 2 could not get money for the coffee they sold, and they could not pay bank debts. As a result, they had to borrow money on the black market at exorbitant high interest rates, and incurred heaped up debts. Meanwhile, Nga Son agent, which collected coffee from farmers shut down, and the owners of the agent have not been present in the locality regularly.

Besides Nga Son, a lot of other coffee agents also fell into insolvency, including Ly Nhung agent in Quang Phu town, Hien Tam in Ea Kpam commune, Quang Tram and Long Nhung in Ea Hding. According to the local authorities, the agents took 500 tons of coffee on consignment from 314 households, but they then declared insolvency.

According to Ea Hleo district’s authorities, 10 coffee trading enterprises and households in the locality have fallen into insolvency. Of these, six have shut down, while the other four enterprises have had their invoices taken back by the taxation bodies. The enterprises are owing 100 billion dong to banks, taxation bodies and farmers.

According to Nguyen Xuan Huong, a high ranking official of the local authorities, said that a lot of enterprises took loss, but many others cheated farmers. Trang Hoan agent in Ea Drang town took 123 tons of coffee on consignment from farmers. While inspectors arrived, the agent owner had dispersed and hidden hundreds of tons of coffee.

Local farmers reported to the inspectors that Hai Kiem Private Enterprise in Ea Drang only paid them 25,000-28,000 per kilo of coffee, while the market price was 38,000-40,000 dong per kilo at the same time.

The new storms arriving

In Dak Lak province, after 43 enterprises and agents declared insolvency, farmers now dare not to consign coffee to agents any more.

Meanwhile, a lot of other insolvency cases continuously occurred in the last half a month in Dak Nong province. Dak Mil district is now the “eye of the storm.”

In Thuan An commune alone, Thu Dien and Lan Dieu agents have declared insolvency. Local farmers once flocked to Lan Thong agent to ask for payment. The owner of the agent said that she has a lot of land plots valuable high enough to pay debts.

Phan Thi Ha in Thuan Hanh hamlet complained that she consigned 4 tons of coffee worth 200 million dong to Lan Dieu agent. While she still does not know when she can get paid, her debt to Sacombank has become matured.

Local authorities’ officials have estimated that the coffee storm has caused to the loss of hundreds of billions of dong.

Source: Dan Viet

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