Rice farmers unhappy despite global top position

Nov 8th at 12:59

08-11-2012 12:59:28+07:00

Vietnam is likely to become the world’s largest rice exporter for the first time this year, but local farmers are not happily embracing the news as they have gained little profit compared to last year’s crops.

As of the end of October, Vietnam is still in the leading position, followed by India and Thailand, with local businesses signing contracts to export some 7.6 million tons of rice, according to figures from the Vietnam Food Administration (VFA).

“Vietnam may export a total 7.7 million tons of rice by the end of this year, and will thus surpass India to become the world’s largest exporter,” said VFA chairman Truong Thanh Phong.

This is the highest export volume ever recorded in 20 years, and it is a huge achievement given the reduced rice production and the troubled export market, he evaluated.

Being in the No.1 place will create a reputation and advantages for Vietnam on the world market, and help rake in more foreign currency for the country, commented Doctor Nguyen Van Sanh, head of the Mekong Delta Institute for Research and Development.

However, rice experts and analysts have a different view on the issue.

Vietnam has only been successful in increasing export volumes, while export effectiveness, and most importantly, the income of rice farmers, are not adequately ensured, they said.

Le Van Giau, a farmer in the Mekong Delta province of An Giang, said his income from the 1.7-hectare paddy field this year dropped by 20 percent compared to last year’s crop, as prices have fallen.

But he is still luckier than farmers with smaller rice fields, who have had to take on extra jobs such as fishing or selling fruit to make ends meet.

Low values

The ten-month average export price of Vietnamese rice this year is US$433.7 a ton, some $50 a ton lower than the same period last year.

Domestic rice prices also slumped against soaring input costs, which have gradually lowered farmers’ profits from their paddy fields.

The export values from rice shipments this year are lower than in 2011, and stand far behind those of Thailand and India due to the cheap prices, said Nguyen Minh Nhi, former chairman of the An Giang People’s Committee.

“Therefore, becoming the world’s largest rice exporter doesn’t mean much to farmers, as most of them are still facing poverty and instable incomes,” he said.

The VFA, meanwhile, explained that the reduced exporting prices were a global phenomenon, rather than a case particular to Vietnam.

However Nguyen Dinh Bich, from the Market Research Institute, said there was another cause -- mistaken predictions on the exporting market conducted by VFA.

As of September 2011, VFA began to increase rice exporting prices to keep pace with Thailand, and managed to export at rates equal to the rival a month later, he elaborated.

By the end of last year, the price gap between Vietnam and Thailand was only $20 a ton, rather than the $40 a ton in the first eight months of the year.

However, the rice management agencies have forgotten that there was still another big rival -- India, which was willing to empty their huge unsold stock at a very competitive price, he added.

“In the last months of 2011, Indian rice exporting prices were at some points $100-$119 a ton lower than their Vietnamese counterparts, and it’s understandable why global customers turned their back on Vietnam and switched to India,” he concluded.