Farmers stop selling rice for temporary storage due to low profits.

With current rice prices, farmers are making very little profit and certainly cannot achieve the 30% profit margin targeted by the government.

According to the Vietnam Food Association (VFA), after nearly a week of implementing the temporary stockpiling program, businesses in the Mekong Delta have purchased approximately 20% of the allocated quantity at prices ranging from 4,500 to 5,400 VND/kg (depending on the type), which is 100-250 VND/kg higher than before the program was launched.

However, farmers in the Mekong Delta have now stopped selling their rice and are instead storing it. This is due to the Ministry of Finance's announcement that the production cost of rice in the winter-spring crop in the Mekong Delta is approximately 3,134 - 4,474 VND/kg. In Dong Thap, the production cost is 4,200 VND/kg. Thus, with the current rice prices, farmers are making very little profit and are even less likely to achieve the 30% profit margin targeted by the Government.

Mr. Duong Nghia Quoc, Director of the Department of Agriculture and Rural Development of Dong Thap province, said that farmers are suffering losses because they sell rice at low prices, earning little profit and finding it difficult to compensate for losses in subsequent seasons. In Kien Giang, the average purchase price of businesses at warehouses is 4,568 VND/kg of paddy and 6,693 VND/kg of milled rice. In reality, this is the price traders and middlemen sell to businesses, while farmers selling paddy to traders only receive around 4,200 VND/kg (fresh paddy) for the IR50404 variety.

According to Mr. Tran Quang Cui, Deputy Director of the Department of Agriculture and Rural Development of Kien Giang province, at this price, farmers cannot make a 30% profit. For farmers to make a 30% profit, the price of rice purchased from them at the field must be 4,700 VND/kg.

Given that the price for rice purchased for temporary storage is not much higher than the production cost, the People's Committee of Dong Thap province has recently sent a document to the Prime Minister requesting the implementation of comprehensive solutions to stabilize the price of commercial rice and ensure the rights of farmers.

The document states that a floor price for purchasing rice for temporary storage should be set to ensure farmers earn at least a 30% profit; and priority should be given to allocating temporary storage quotas to provinces with large commercial rice production such as Kien Giang, Dong Thap, and Long An. Previously, the People's Committee of Kien Giang province issued a decision setting the floor price for purchasing rice from the winter-spring crop at 4,500 VND/kg, which is 703 VND/kg lower than in 2012.

According to (VOV) - LC