Foreign traders distort agricultural market

Foreign traders distort agricultural market

Poor regulation of foreign traders coming to Viet Nam to buy agricultural produce, sometimes illegally, is causing volatility in prices and a disruptive effect on farmers.

Vo Van Quyen, director of the Ministry of Industry and Trade's Domestic Market Department, said since May last year there has been an influx of foreign traders who bought large volumes of agricultural produce.

Many of them come on tourist visas, he said.

But their massive purchases push up the prices of some items and lead to a partial shortage.

Quyen said the higher prices persuade farmers to rush to plant a crop or farm fish, subverting local authorities' plans.

Some of the traders then stopped buying, sending prices tumbling, he said.

Besides, many of the purchases were made without consideration for quality, which affected the prestige of Vietnamese agricultural produce in the world market, he said.

Nguyen Minh Toai, director of the Can Tho city Department of Industry and Trade, said many farmers have become destitute after foreign traders unilaterally terminated contracts or cut prices.

It has happened with crops like coconut, watermelon, pineapple, aromatic banana, and purple sweet potato, he added.

Cao Van Trong, deputy chairman of the Ben Tre People's Committee, said the area under coconut in the province has expanded by 15,000ha since the middle of last year to 70,000ha.

With foreign traders buying dry coconut, prices of the nut jumped to VND150,000 per dozen early last year, inducing farmers to plant more trees, he said. But when the purchases stopped in the middle of last year the prices collapsed to VND15,000, he said.

The province has decided to provide farmers a subsidy of VND1.5 million per ha of coconut, he said.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the country has had enough laws to regulate trading by foreigners, but some official agencies have failed to enforce them.

The ministry would crack down on illegal foreign traders and educate farmers about the risks involved in trading with them, she said.

"Farmers have traditionally been doing business with cash and verbal contracts, not with paperwork, and this should change since legal contracts are a must, especially in the context of global economic integration," she said.

The ministry has implemented a pilot project to train farmers in signing contracts to sell their products.

The farmers have taken to it very well, creating a good foundation for expanding the project, she said.

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