Rice firm, traders in dispute over purchases from farmers
Rice firm, traders in dispute over purchases from farmers
Many farmers in Tien Giang Province have sold their rice to free traders at higher prices in spite of contracts requiring them to sell to the companies who had provided seeds for them to start their crops.
In July, the Tien Giang Food Co (Tigifood) closed an investment and consuming contract with more than 30 rice-growing households in Thanh Loc Commune of Cai Lay District.
According to the contract, the company would provide seeds for these farmers to grow 40 hectares of paddy field, and pledged to buy their rice at a floor price of VND5,200 per kg.
Should the market price be higher than this minimum rate, the company will increase its buying price, the deal reads, while it also stipulated that the commune’s local government will solve the dispute between the two sides, if any.
But as the harvest time came earlier this month, the farmers defied the contract by selling to outside traders who bid higher buying prices, saying their hard work on the paddy fields should be paid off.
As of September 11, some eight hectares of rice out of the contracted area have been sold to traders, who paid up to VND100 a kg higher than the rate suggested by Tigifood.
The company did increase its buying prices, but then the traders again asked for higher rates, escalating the dispute between Tigifood and the rice growers.
Nguyen Van Tham, one such grower, said he chose to sell to traders as the company failed to buy at higher prices than market rates, as it had agreed to.
Another farmer, Pham Van Sau, also said he did not violate the contract.
“[The contract] says if the company buys at lower than market rate, farmers are allowed to sell to other traders,” he said.
Traders manipulate market
At a meeting aimed at easing the dispute held on Wednesday, Pham Cong Trung, deputy chairman of the commune, admitted that the rice trading in his locality is “very complicated,” with many farmers violating the contracts with Tigifood.
The commune authorities also discovered that the traders only paid high prices for good-looking rice, while refusing to buy lower-quality products. When the local government asked traders to buy all of the rice, they simply fled, according an official.
Trung also advised farmers to think carefully between selling to the company, as contracted, or the traders.
“It’s important to keep promises with the company,” he said.
“What if one day the traders stop buying, how could the farmers turn back to the company and ask it to buy your rice?”
Tigifood meanwhile said it will continue purchasing rice from farmers and award VND30 per kg, as earlier promised.
Farmers who do not want to sell to the company only have to pay back the seed expenses for their crops, the company said.
“We will never sign any contracts with farmers in Thanh Loc commune thanks to this bad reputation,” deputy director of the company, Le Thanh Khiem, said frankly.
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