Food Association signs deals to purchase rice from farmers

Food Association signs deals to purchase rice from farmers

HCM CITY (VNS) – As part of a pilot programme to guarantee outlets for rice, the Viet Nam Food Association’s 16 member companies have signed contracts with farmers in the Cuu Long (Mekong) Delta who have pooled nearly 13,000ha for the large-scale rice fields project.

The companies will buy up the grain harvested from this year’s summer-autumn crop in An Giang, Tien Giang, Long An, Kien Giang, Soc Trang, Dong Thap, and Hau Giang provinces and Can Tho city, according to the Ministry of Agriculture and Rural Development.

The ministry’s programme follows the issue of a circular to assist implementation of the Prime Minister’s Decision 62 on encouraging both development of agriculture and creation of large fields and consumption of grains grown.

With the summer-autumn rice crop nearly fully harvested, the companies have already bought the rice grown on more than 9,920ha out of the 13,000ha, or 80 per cent.

They paid VND100-120 a kilogramme higher than market prices, the ministry said.

Speaking at a meeting held in Long An on Monday (Sept 8) to review the programme, Le Duc Thinh, deputy head of the ministry’s Cooperative Economy and Rural Development, said the 80 per cent rate is higher than the average rate under such contracts in the region.

He was referring to the fact that 101 companies that have signed contracts with farmers with a combined area of 77,420ha have only bought rice grown on around 42,600ha, or a little over half.

Even this represents an increase of 25 percentage points from last year, Thang said.

The companies blamed the low rate on several causes, including farmers breaching their contracts when rice prices are high and their own low financial and infrastructure capabilities.

Ngo Thanh Van, deputy director of the Long An Food Company, said his company has signed contracts with farmers for six rice crops so far and has bought 60-70 per cent of the grains harvested.

But this time the rate was only 30 per cent because rice prices increased and farmers refused to sell to the company in violation of the contracts, he said.

Pham Thai Binh, director of Trung An Company Limited based in Can Tho, said if the companies offer higher than market prices, traders cannot compete with them.

If the rate of buying is low, the companies should look at themselves and not blame traders, he added.

Nguyen Thanh Truyen, deputy director of the Long An Province Department of Agriculture and Rural Development, said their lack of infrastructure and large harvests mean many companies are unable to buy all the contracted rice, forcing farmers to sell to traders.

Since 2010 farmers and companies have been co-operating to develop large-scale rice fields.

Farmers who participate have managed to increase yields by 0.2-0.7 tonnes per hectare and earn VND4-6 million (US$190-285) more per hectare than normal. Companies benefit by not having to depend on traders and also getting high-quality grain.

Companies sign the contracts either with rice co-operatives or individual farmers.

Before the 2014-15 winter-spring crop the ministry plans to have farmers with nearly 91,700ha of large-scale fields tie up with companies, 17,700ha more than during the last winter-spring crop. – VNS

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