The proposal was made during yesterday’s meeting between VASEP and Minister of Agriculture and Rural Development Cao Duc Phat at the 2012 Vietfish exhibition.
Nguyen Van Kich, CEO of Cafatex, said catfish exporters have been forced to sell at lower prices under the pressure to clear bank loans, which has bottomed out prices over the last few months.
With their export prices set at a low rate, businesses understandably have to force farmers to sell to them at a similar cost.
“The situation will worsen if the floor prices for buying and export are not imposed in time,” urged Kich.
Businesses also called on the agriculture ministry to boost government approval of the proposed VND4.2 trillion aid package to help fish farmers and processors.
However, VASEP deputy chairman Duong Ngoc Minh said the government has yet to green-light the assistance as relevant ministries and agencies are still discussing who will receive the help, as well as the interest rates, conditions, and terms for the loans.
While economic experts have said the package is necessary, the Vietnam Development Bank said that even when it is ordered to offer loans, the maximum credit it can give is only VND2.2 trillion for catfish exporters.
VASEP’s Minh said that if the assistance is issued late, no farmers will be able to survive the next one or two months.
“They will sell their fish at all cost to have money to clear bank loans set at 18 – 20 percent interest,” he said.
“The package is only meaningful if it is released at the moment.
“Once they access loans, firms under VASEP will stockpile 100,000 tons of catfish from farmers, and prices may rebound to VND22,000 kg from the current dirt cheap figure of VND18,000,” he said.
Nguyen Van Dao, CEO of Go Dang JSC, said that what farmers need to do now is stay calm and try not to sell their fish at a loss.
“If all farmers agree to sell their fish at throwaway prices, prices will slump even further,” said Dao.
“It can be observed from the development of the catfish market over the last few years that the market will soon recover and prices will soar again,” he added.
Minister Phat said that his ministry will soon work with VASEP on solutions to save the catfish market, and will forward the exporters’ proposals to the government in the next meeting.