In just seven years, the once booming farm economy along the Mekong Delta is proving unsustainable. Barring a few farms that are still in business, most are struggling to meet costs. Many blame poor management, lack of investments and virtually no support from the State.
A corner of Hoang Van Hon’s farm that is in liquidation in My Chanh Commune, Chau Thanh District, Tra Vinh Province (Photo: SGGP)
Farms in the red!
The State’s policy on economic development of farms was introduced in 2000. Tra Vinh province in the Mekong region was the first to adopt this policy and Tra Vinh suddenly saw an increase in the number of farms from just 76 in 2001 to 3,200 within a year. Such feverish growth was encouraged and constantly supported by the State who sought to promote its economic farm policy.
Today the numbers of farms in Tra Vinh have been reduced to just 1,820, most of which are facing losses and debts. In certain areas like Tieu Can district, 115 out of the 232 cow, pig and shrimp breeding farms have had to shut down.
In Chau Thanh District three farm owners declared bankruptcy and one even fled from his creditors! Nguyen Quoc Huy, an officer in the district’s Department of Agriculture and Rural Development claims that today only eight farms are in operation compared to 225 just a few years ago.
Tran Van Quan, the deputy head of the Tieu Can district’s Department of Agriculture and Rural Development, claims the cause for farms to become bankrupt was mainly inefficient management, unstable market conditions and high revenue costs. Many farmers rushed to set up farms to avail of more benefits from the Government. Such hurriedly established enterprises did not meet the required standards that the state required.
In the coastal district of Duyen Hai in Tra Vinh Province, more than 98% of the 204 black tiger shrimp farms have switched to crab farming, since shrimp pools are no longer lucrative.
Lam Van Huynh, deputy chairman of the People’s Committee of the district’s Long Khanh community said that the “movement” to set up aquaculture farms unsystematically during the past several years has caused serious environmental damage to the shrimp habitat. Shrimps were harvested in large numbers and farmers suffered great losses. As a result, the local farms became bankrupt and subsequently mortgaged their properties worth billions, to banks and financial institutions in order to obtain loans.
The tra fish breeders too faced a similar fate. In six communes of My Xuyen District in Soc Trang Province, large numbers of tra fish farms have suffered losses and have finally closed down. So have many such traumatic stories been replicated in Bac Lieu, An Giang, Dong Thap and Can Tho.
Dong Thap, which once saw 4,600 farms has now about 100, out of which only a handful are fish farms. More than 50 percent of the farms have had to shut down and the remaining have turned to rearing other aquatic species.
Tan Loc isle in Thot Not District, Can Tho City, was once dubbed, “the isle of billionaires” owing to its phenomenal economic success in tra fish farming. However, since the past three years it has been more aptly dubbed as “the isle of debt”.
Experts attribute the state of the farm economy in the Mekong region to gross mismanagement, lack of skill and poor knowledge of modern scientific and technological techniques. As a result, the farmers were unable to meet with the expected demands in growth production, quality control and continued competition.
In order to develop the farm economy, the State had promulgated many policies to give support to farm owners by way of tax cuts, credit loans, land purchases, trade promotion and marketing. However, most farm owners could not benefit from these policies and they had to create their own resources for loans, production and marketing.
Nguyen Loi Duc is a farmer owning 100 hectares of land in Tri Ton District of An Giang Province. According to him it is not easy to cooperate with State-owned enterprises as they often want a share of the pie. He now wants to build a 1000 square meter warehouse and install rice husking and polishing machines with a total investment of about VND800 million (US$40,000), He is looking for a partner or a bank loan, neither of which he is able to find. When he applied for a loan under Decree 41/2010 of the Government on the same credit policy for agriculture and rural development, the banks informed him that they had no source of funding for such loans.
A black tiger shrimp breeding pool in the Mekong Delta’s Vinh Long Province (Photo: Vinh Long TV)
Nguyen Van Mi, head of the district Department of Agriculture and Rural Development claims that even though they wish to help farmers to get loans the complicated lending procedures under the Decree only discourage farmers from applying for loans.
According to Ho Van Thiet, head of the provincial sub-department of Rural Development in Ben Tre Province, only 432 farms have been certified and 4,000 farms are still awaiting certification. Of the already certified farms only a handful have been cleared to receive incentives from the State.
Nguyen Minh Hien, deputy head of the Sub-department, blames poor coordination between concerned agencies and a sudden spurt of farms for the sole reason of benefiting from the States economic farm policy. He also believes that a number of farms do not want to apply for certification because they think they may have to pay corporate income tax besides also feeling uncertain about the State preferential treatment.