A fruitful season but less joy
Many paddy fields in Hau Giang are currently in the harvest season of the spring-winter rice crop. The yield is good, and the rice is in-season. However, contrary to their expectations, farmers are disheartened as traders have collectively reduced the purchasing price compared to the previous deposit agreement. If farmers do not lower the price, traders will stop purchasing.
Mr. Nguyen Van Chinh, who has just harvested 1.2 hectares of RVT rice in Ward 3, Vị Thanh City, Hau Giang Province, said that before Tet, he and other local farmers “booked” their rice at a price of 9,800 VND/kg (for RVT variety) and 9,000 VND/kg (for fragrant rice). At that time, the farmers were very excited to receive deposits.
However, when it came to the harvest day, the buyers cited the reason that the price of rice had decreased in the market, so they only paid 8,200 VND/kg for RVT rice and 7,800 VND/kg for fragrant rice. “Even though the actual selling price is 1,000 VND/kg lower than the deposit price, we still have to sell because if we don’t sell to them, we don’t know who else to sell to,” Mr. Chinh said.
The situation is similar for Mr. Tran Van Nham in Vinh Thuan Tay commune, Vi Thuy district, Hau Giang province. This is the first time he received a deposit for the purchase of rice at a price of 10,000 VND/kg (for RVT rice).
“We thought we would have a good harvest, but on the harvest day, the traders reduced the purchase price to 8,500 VND/kg for the purchased variety and 8,000 VND/kg for the commercial rice. We have to sell because the rice cannot be stored for too long,” Nham said.
Farmers are having a successful spring-winter rice crop, but the rice prices have been continuously decreasing recently. Photo: CK.
The situation of traders forcing down the actual purchase price compared to the deposit price with farmers during difficult market conditions or when the market price of rice decreases is not new. However, in this year’s spring-winter crop, the purchase price has significantly decreased compared to the deposit price, causing farmers to feel regretful. The yield of this crop is quite good, averaging over 1 ton per cong (1,300 m2), with some fields reaching nearly 1.2 tons per cong. The decrease in rice prices has caused farmers to lose a considerable amount of profit.
According to the calculations of farmers, for every cong that yields 1 ton of rice, if the selling price is reduced by 1,500 VND/kg compared to the deposit price, farmers will lose 1.5 million VND; equivalent to a loss of 15 million VND per hectare. “This figure is just for one household, not to mention a district or a province. The amount of the decrease is not small,” said farmer Tran Van Nham.
Summer-autumn rice is ripe but not yet harvested
A few days ago, many people gathered at the headquarters of a food company in Co Do district, Can Tho City, to demand payment for rice that they had previously sold. The people said that the company, through traders, bought rice from them but did not immediately pay them, and had repeatedly delayed payment.
Mr. Phan Van Quan from Thanh Phu commune, Co Do district, said that his family sold over 90 tons to traders who were buying for the company at a price of 8,600 VND/kg. Initially, the traders intended to pay off the debt, but he kept part of the rice and forced the traders to pay an advance of about 200 million VND. However, they still owe over 600 million VND.
“Because I have been doing business with them for many years, I trusted them to owe the money and took the rice to them. However, up until now, more than 10 days later, I still have not received the remaining amount. The company promised to bring the money to pay today (March 8), but so far, I haven’t seen anything,” Mr. Quan said, adding that many farmers have been owed by the company for a longer time. Now that the summer-autumn crop is ripe and the money from the spring-winter crop has not been received.
The harvested rice is left “stranded”, and farmers are eagerly waiting for traders. Photo: TC.
Ms. Nguyen Thi Tuyet from Trung Hung commune, Co Do district, said that the actual purchase price by the company was lower than the deposit price, which was 500 VND/kg, at only 8,000 VND/kg. Therefore, some farmers do not accept the price reduction and sell to others at a price of 8,300 VND/kg.
According to farmers, even when they agree to lower the price, the company’s rice purchases are also delayed, the harvesting machines and weighing of rice are delayed compared to what was promised. Being “stranded” on the field for too many days after the harvest causes the rice to turn dry and lose a lot of quality, and the delayed weighing also causes farmers to lose out.
A representative from a food company in the Mekong Delta said that the delay in rice purchases was due to a shortage of transportation and overloaded drying facilities during the harvest season. When the main harvest season came, the supply of rice increased rapidly within a short time, which caused a sharp decrease in domestic rice prices. Taking advantage of this situation, rice import partners also tried to “force prices down” with Vietnamese rice export companies.
In Directive 10/CT-TTg dated March 2, 2024, the Prime Minister requested the Ministry of Industry and Trade to lead and coordinate with the Ministry of Agriculture and Rural Development, local authorities to study and propose pilot models that involve “traders” in the value chain of the rice industry. This would not only enhance their role as a bridge between farmers and businesses but also limit the potential risks for all parties involved in the value chain.
The Prime Minister also instructed the Governor of the State Bank of Vietnam to direct commercial banks to create favorable conditions for people and businesses to access credit at preferential interest rates, meet the credit needs for rice purchases and rice exports, especially for the purchase of the spring-winter rice crop in the Mekong Delta provinces.
