Mekong River Delta farmers, once again, ignored the advice of the Ministry of Agriculture and Rural Development (MARD) on restricting the low grade rice growing area. Why did they think nothing of the state management agency’s opinions?
However, farmers, who turned a deaf ear to the advised, still decided to sow IR50404, a low grade rice variety, for the 2011-2012 winter-spring crop.
The farmers now suffer from their wrong decision: only high grade rice has been selling well, while low grade rice remains unsold. The Vietnam Food Association (VFA) has said that its member companies would prioritize to buy high grade rice for storage, because the products are in the high demand in the world market.
In this case, farmers cannot blame the state management agencies on their unsold rice. However, a question has been raised that why the farmers ignored the advices?
The problem is that the MARD’s advice did not come from the predictions about the consumption level of the market, but from the calculation on the ecological plantation balance in the region. Therefore, farmers do not pay much attention to the advice, and they have to consult with merchants, who will collect rice from them, about what rice varieties to grow.
Up to 70 percent of the rice fields in Mekong Delta have been used to growth IR50404 rice for the 2011-2012 winter-spring crop. Local departments for agriculture and rural development said that the recommendation of growing low grade variety is the “main culprit” that has caused to the rice abundance.
However, what should farmers grow, if they see that medium and low grade rice always accounts for the overwhelming proportion in the rice export structure?
According to VFA, in 2011, low and medium grade rice exports accounted for 61.2 percent of the total rice exports, while high grade exports just accounted for 28 percent, and fragrant rice 6.6 percent. In the first quarter of 2011, when Mekong Delta began harvesting the winter-spring crop, medium and low grade rice (15-25 percent broken rice) amounted to nearly 72 percent of the rice exports.
Analysts have commented that in the last many years, Vietnam’s rice export policy has been aiming to export as much as possible. This has helped Vietnam make great progress in the rice export volume. However, with the policy, Vietnam has been facing the uncertainties of the market.
In 2011, Vietnam exported 7.5 million tons of rice, a record level, which represented an 85 percent increase in comparison with 2004. However, while the export volume increased so sharply, the percentage of high grade rice exports has been decreasing continuously, from 40 percent in the period prior to 2004 to less than 30 percent in 2011.
Experts have also pointed the problems in the export markets. Though Vietnam’s rice has been present in 70 countries in the world, Vietnam still has been focusing on some key markets such as the Philippines, Indonesia, Malaysia, Nigeria, Senegal and Mozambique.
It’s clear that the big rice importers are also the rice producers. Therefore, they should be seen as unstable clients. If their rice volume is high, they would reduce the imports, and vice versa. In 2011, the exports to the Philippines dropped by 50 percent, because the country had a bumper crop.
Meanwhile, Vietnam still cannot penetrate the Middle East, the market with high and stable demand, because its rice quality is lower than Thai rice.