Farmers harvest tra fish in the Mekong Delta
The Agriculture Ministry will join hands with related agencies in clarifying the loan of VND38.218 trillion (US$1.82 billion) that the State Bank of Vietnam claimed has been given to tra fish businesses and farmers in the Mekong Delta, the hub of Vietnam’s tra fish export, as of September this year.
Deputy Agriculture Minister Vu Van Tam made the announcement in an interview with Vietweek, after the bank’s figure had raised doubts from businesses and farmers. They said that it was “unreasonable,” given that both had difficulties in accessing the credit, or could not do it all.
“If over VND38 trillion were truly lent to businesses and farmers, surely the tra fish industry would not suffer from a serious lack of funds like it is now,” said Duong Ngoc Minh, vice chairman of the Vietnam Association of Seafood Exporters and Producers.
He said many farmers in the Mekong Delta are now not breeding fish because they have no money to buy baby fish.
Without enough money, export businesses are still owing farmers money of one to three months’ worth of fish sales, he said. In some provinces, companies have already closed or reduced their output by up to 90 percent, he added.
In fact, in Can Tho City, many farmers have quit breeding tra fish due to continuous losses over years and inability to access bank loans, said Nguyen Ngoc Hai, chairman of Thoi An Seafood Cooperative in the city.
He said the funds from banks only meet roughly 20 percent of the actual costs that farmers need to pay for breeding the fish, citing that 20 members of his cooperative so far have taken out bank loans worth just some VND20 billion ($943,300) totally.
During the first nine months of this year the members borrowed at rates of 14.5-15 percent a year, he said.
Even though in August the government ordered banks to lower the interest rates of tra fish loans to 11 percent, farmers could not make any more loans due to strict conditions, Hai said.
It was still difficult for farmers who already mortgaged their assets for earlier loans, he added.
In an earlier report to the government, the Agriculture Ministry also attributed the difficulties of businesses and farmers in accessing bank loans to high interest rates besides low credit limits.
Some banks actually even set the interest rates at 19-21 percent, despite the government’s order, Nguyen Huy Dien, deputy chief of the ministry’s fisheries department, was quoted as saying in a report on the government’s website in October.
Moreover, they limit a loan to under a billion dong per hectare, while it costs at least VND8 billion ($383,000) for every hectare of tra fish, according to Dien.
As it takes up to ten months to breed the fish, farmers need long-term credit, but banks only offer them short-term loans of between one and three months, he said.
“To be honest, we are so fed up with banks,” said Tong Van Quang, a tra fish farmer in Can Tho’s O Mon District.
He said his family business, which has an output of 200 tons per year with the investment of some VND2.2 billion ($105,340), is allowed to borrow only about VND1.5 billion. Even veteran farmers with “good records” with banks have to borrow at more than 13 percent, he added.
Elsewhere in An Giang Province, a major supplier, banks are no longer giving loans for tra fish breeding.
Le Chi Binh, vice chairman of the An Giang Association of Fish Farming and Processing, said without any assets for securing loans, farmers cannot apply for them. Besides, given the losses that tra fish companies and farmers have suffered of late, the banks do not dare to lend money, he added.
Binh said there were only a few farmers left who are able to breed tra fish on a large scale to supply to exporters. Most farmers have switched to other jobs or scaled down production, he added.
Truong Dinh Hoe, general secretary of the seafood association, told Vietweek to determine whether the figure reported by the central bank was true or not was a matter of “a simple calculation.”
He said the current output of tra fish in the Mekong Delta is some 1.2 million tons, and it costs VND20,000-22,000 to breed each kilogram, meaning that the total cost would be VND24 trillion ($1.15 billion).
With additional processing costs included, the industry needs to spend a total VND30 trillion ($1.44 billion), Hoe said, noting that part of the expenditure also comes from the funds of farmers and businesses.
This figure “fits” with the turnover of $1.8 billion expected for this year, he said, arguing that the industry doesn’t need more than VND30 trillion.
“If the central bank’s claim that the tra fish industry received VND38 trillion within the first nine months was true, the industry’s economic effectiveness needs to be reviewed,” he said.
In response to the skepticism, the State Bank of Vietnam claims that it came up with the figure based on reports from banks in the Mekong Delta, the government’s website said on December 23.
It said that for tra fish exports, the banks would have to lend to both breeders and exporters. So, the figure is “suitable” with the turnover of nearly $1.6 billion in the first 11 months, it stressed.
According to the central bank, as of September, unpaid debts totaled VND20.78 trillion ($995.16 million), an increase of 14.03 percent from last year’s end.
The increase was reasonable, given that fish feed, which accounts for 80 percent of breeding costs, have increased by 15-20 percent from the same period last year, it said.
Vietnam’s tra fish export revenues over the past 11 months have decreased by 2.4 percent from the same period last year, according to an industry report.
Of all the eight main buyers, only Hong Kong has increased imports, up 9.7 percent. Others, including the EU, have reduced purchases by up to 19.4 percent year-on-year.
By Thanh Nien Staff, Thanh Nien News (The story can be found in the December 28th issue of our print edition, Vietweek)