Lao fish farmers concerned about foreign competition
Lao fish farmers concerned about foreign competition
Lao fish farm breeders are concerned about the stiff competition they will face from foreign fish farm operators after the government moved recently to legalise some unauthorised foreign fish farms.
Vientiane authorities recently announced that they would move to formalise the illegal fish breeding operations of some Chinese fish farmers on the Nam Ngum river on the outskirts of Vientiane.
The government said foreigners who are operating fish farms in Vientiane should submit the relevant documents to obtain proper business operation licenses as soon as possible.
The move comes as all sectors of industry and agriculture are now open to foreign investment, aiming to generate more revenue and integrate with the Asean Economic Community by next year. However Lao fish farm breeders are worried that the promotion of foreign investment in the industry will create too much competition in the local market, causing the numbers of fish to overflow and prices to crash.
Head of the Lao Fish Farmers' Group, Mr Kenchanh Thailavan said the issue is that oversupply will force the prices farmers receive for their fish to fall significantly, thereby putting extra pressure on local breeders.
Almost all Lao fish farms in Vientiane have borrowed money from the bank to establish their operations, he explained, and they have to make high interest repayments each year.
In contrast, some foreign operators have access to other sources of capital and can afford to lower their prices temporarily to force competitors out of the market only to raise them again.
Mr Kengchanh asked who will be responsible if a number of Lao fish breeding operations collapse. He acknowledged that foreign investment promotion is a good policy for the country but stressed that the government should create measures in management and allocate a quota of farms for breeding to prevent an overflow of fish.
Normally Vientiane requires somewhere between 1,300-1,500 nets to produce fish for people's consumption but currently there are over 3,300 nets in the surrounding area, Mr Kenchanh said. Many Lao fish farm breeders cannot compete with foreign breeders as they have invested large amounts of capital and lack knowledge on efficient breeding and marketing techniques.
Consequently, most Lao farmers have to import fingerlings and fish feed from neighbouring countries which adds to the cost of their operations.
Amid stiff competition and a lack of good management, Mr Kenchanh believes that in the years ahead many Lao fish farmers may go out of business and there will no longer be a fish farmers' association any more.
“Our group currently comprises around 51 members including the farmers in Borikhamxay and Vientiane provinces,” he said, “but at the moment we have fears for its future.”
He stressed that for the group to survive it will require closer collaboration and cooperation among the group members in order to share new techniques and achieve economies of scale.
However despite farmers' concerns the demand for fish in the market is still high as many people are eating more fish after limiting their beef consumption following a sharp rise in price.
The price of captive bred tilapia at the farm gate has currently fallen to between 12,000-15,000 kip a kg due to market oversupply.
vientiane times
