In the past 21 years (1989 - 2010), Vietnam’s rice industry has gained impressive achievements, with a relatively high growth rate (exporting 1.4 million tonnes in 1989 to 6.1 million tonnes last year), accounting for 22% of the total 31 million tonnes of rice supply in the world. However, rice seed production in Vietnam, particularly in the Mekong Delta, is facing many challenges.
Strengths in rice production
The area used for rice cultivation makes up 44% of the country's agricultural land, and 80% of its farmers are rice growers. Almost all Vietnamese people of all income levels eat rice every day. With rice being so significant, the Party and the Government consider rice production a key task for agricultural and rural development.
‘The achievement of exporting 3.9 million tonnes of rice indicates the great effort farmers, scientists, authorities and businesses have made in producing, researching and expanding the rice export market in the context of price fluctuations,’ said Truong Thanh Phong, Chairman of the Vietnam Food Association (VFA) and general director of the Southern Food Corporation (Vinafood 2).
Many difficulties have been forecast for rice exports because of political instability in the Middle East and the changing import policies of the Philippines, one of Vietnam’s major importers. However, the world rice market has been changing in favour of Vietnamese rice exporters over recent months. The quantity of rice exported to Africa has been more than expected, while rice exports to Asian countries have also risen by 10.54%. The Philippines has ordered 660,000 tonnes of rice, Iraq imports 100,000 tonnes monthly, and Indonesia and China have also been planning to import rice in bulk.
According to the VFA, as the quality of Vietnamese rice has improved, the difference in price between Vietnamese and Thai rice has become less than before. The volume of medium-quality rice has increased, while the volume of lower-quality rice has decreased. The price of Vietnamese rice was higher than Thai rice in April and May this year and the average rice price rose to US$27per tonne, bringing the export value for the first six months to increase more than 24%. Interestingly, even though the national area for rice cultivation in 2010 was 380,000 hectares less than in 2000, the output increased dramatically, thanks to the spike in yield from 3.18 tonnes per hectare (the national average yield in 1990) to 5.3 tonnes per hectare in 2010, making Vietnam the leading nation in the ASEAN region in terms of rice productivity. It’s predicted that Vietnam will export 7 to 7.3 tonnes of rice in 2011.
From now until the end of the year, the world rice price will likely remain unstable due to continuing global economic difficulties. Therefore, businesses should be active and flexible in purchasing and maintaining their suppliers to ensure production, exports and national food security, as well as following the Party’s Resolution 26 on agriculture and rural development.
The Northern Food Corporation has invested VND 600 billion in building a modern chain of three large rice processing plants and renovating ten small rice plants, but the construction of rice warehouses is still slow with only 29.13% of the target number being completed due to problems related to land clearance and high interest rates for bank loans.
To raise the value of Vietnamese rice, co-ordination among production, consumption and exports in rice cultivating provinces should be professionally enhanced to diversify rice products. The State and the Ministry of Agriculture and Rural Development should set up a strategy, as well as a fund, to help research institutes select high quality rice breeds. Economists say the Government should create financial policies to support businesses in developing a warehouse system, as well as policies for investment, finances, science and technology so that they can develop a large scale, high quality rice growing region for both domestic consumption and export.
For the long term, the State should focus on vocational training for one million rural workers so that farmers throughout the country and in the Mekong River Delta can double their income. The VFA and its members should set up a strategy to positively exploit the domestic and regional market and open a chain of stores to serve the new stratum of urban people that demand higher quality rice and are willing to pay for it.