Rice storage program ends up in failure
By Trung Chanh - The Saigon Times Daily
CAN THO – Participants in the program to buy one million tons of rice for temporary storage have basically finished their assignment, but the program’s target to prevent rice prices from falling was not achieved.
The rice storage program conducted by the Vietnam Food Association (VFA) has completely failed, said agricultural experts.
During the run of the program, commercial rice did not mark up. Instead, there was time when prices dropped sharply, greatly affecting the profits of farmers.
Strangely enough, paddy prices in the Mekong Delta have prospered after the program wrapped up.
Questions arise as to who get benefits from the program and whether further programs should be carried out with supports for farmers rather than enterprises.
Nguyen Phuc Anh, director of Tan Tai III Company in the Tien Giang-based Ba Dac market, said the State should not provide enterprises with preferential loans to purchase rice for temporary storage. Instead, the capital should be given to farmers, so that they can buy better fertilizers and agricultural materials.
While VFA members were allowed to access loans with subsidized interest rates, decide purchasing prices and negotiate prices with partners, farmers could only decide whether to sell their produce or not. As such, it is obvious that only enterprises benefit from this storage program.
Le Van Banh, director of the Mekong Delta Rice Research Institute, said the rice storage policy turned out to be ineffective. Although Vietnam is one of the world’s leading rice exporters, the local storage system is still very poor, he explained.
Professor Vo Tong Xuan, a prominent agronomist, said: “The past experience shows that the paddy prices decided by VFA only protect the interests of the association while farmers’ interests are neglected.”
The rice storage program was kicked off on March 15 and originally planned for conclusion at the end of this month, aiming to prevent rice price drops and ensure a profit margin of 30% for farmers. Under the program, one million tons of rice was purchased from farmers.
At present, after the program has finished, earlier than expected, the fresh paddy IR 50404 is sold at VND4,500-4,600 per kilo, rising VND100-200 against last week. The dried category has also marked up VND100-200 to VND5,350-5,400 a kilo, said intermediary trader Nguyen Thanh Hon in Tien Giang.
In comparison with the average price during the rice storage program, commercial rice prices have increased by VND200-350 each kilo.
Prices of fragrant and high-grade paddy also surge strongly. For example, the paddy OM 4900 is now sold at VND5,200-5,300 per kilo.
Nguyen Van Hai, a rice trader in Ba Dac market, expressed his surprise at the price rise. “We have yet to figure out the reason why paddy prices increase strongly, but recently material rice is bought at higher prices by intermediary traders.”