Recently, many farmers in Cờ Đỏ district, Can Tho city have reported that their rice was sold to traders who failed to make timely payments, and some even had to go to the company’s headquarters to demand debt repayment.
The entity behind the rice traders is identified as Lộc Nhân Grains Joint Stock Company, a member of the Lộc Trời Group.
The reason for the farmers’ rice payment arrears, according to the company’s spokesperson, is that there has been some disruption in the banking system in recent weeks, resulting in delays in arranging cash payments to the farmers.
A cash payment contract that farmers have with traders.
Lộc Trời Group’s representative explained that raising a large amount of cash to pay farmers when the rice harvest is in full swing is quite difficult. To address this issue, Lộc Trời has arranged for farmers to open accounts with banks to facilitate fast and accurate electronic payments. “Lộc Trời Group, in collaboration with the banks, is arranging the necessary cash amounts to be transferred to the farmers as soon as possible,” the company’s representative pledged.
Recently, Lộc Trời won a bid to supply about 65,000 tons of rice to Indonesia. As a result, the company has to spend money to buy rice, deliver it, and wait for payment from its partner. “Due to interrupted cash flow, this has caused delays in paying farmers for their rice. The company is gradually resolving this issue every day for the farmers,” added the company’s representative.
In addition to the rice payment arrears, farmers also complained that even though the company had purchased their rice, it was done through traders instead of directly or through cooperative production. By going through intermediaries, additional costs are incurred, pushing up the price of rice and leaving the farmers at a disadvantage.
Lộc Trời’s representative explained that farmers still have the habit of selling rice to traders who then sell to companies. The company is persuading traders as well as farmers to register for cooperative production and open bank accounts for electronic payments instead of withdrawing cash. The company is also exploring immediate and long-term solutions to prevent delays in paying for rice as currently experienced.
Farmers in Mekong River Delta during the winter-spring crop. However, the recent continuous drop in rice prices has reduced farmers’ profits. Photo: CK.
As reported, because the company’s payment for rice has been delayed, many farmers in Cờ Đỏ district, Can Tho city went to Lộc Nhân Grains Joint Stock Company’s headquarters to demand payment.
Phan Van Quan from Thạnh Phú commune said that over 10 days ago, he sold his rice but the trader did not make immediate payment as agreed, so he did not allow the boat to transport the rice. Seeing this, the trader paid an advance of about 200 million VND, still owing 600 million VND.
“There are others who have been owed for a longer time, so they came to the company demanding payment. They are upset because the summer-autumn rice has grown but they have not been paid for the winter-spring rice yet,” said Mr. Quan.
According to some farmers, even when they agreed to reduce prices as requested by the trader, the process of purchasing the rice was also delayed, the harvesters arrived late, and the rice weighing was delayed compared to the commitment, resulting in loss for farmers.
