This Lunar New Year holiday has left flower and pot plant farmers across Vietnam with thousands of dollars in losses as they failed to anticipate what turned out to be a plunge in demand.
Flower shopping peaks in Vietnam during days leading up to Tet, the country’s biggest holiday, as almost everyone does their best to add color to their homes as they can afford.
But flower gardens in My Tho, the capital town of Tien Giang Province in the Mekong Delta, are still full of blossoms days after the start of the holiday on February 10, after which people are no longer adding decorations, Tuoi Tre (Youth) newspaper has reported.
Local farmer Nguyen Tuan An said he planted in preparation to produce 2,000 flower baskets, but only sold just over half his inventory.
Dealers signed contracts with local farmers, but once they could not sell to customers, they did not order more flowers.
“I lost more than 30 million (US$1,440),” An told Tuoi Tre. Vietnam's annual income per capita is around $1,400.
He said he hopes to save some of the leftovers until next week when there will be major celebrations for the first full moon of the lunar year, when people buy flowers to place at pagodas as offerings.
Tran Van Tiep, another My Tho local, carried 3,000 flower baskets to Ho Chi Minh City himself, hoping to earn more by selling directly to customers than to dealers.
“But the market was terribly gloomy. There were more sellers than buyers,” Tiep said.
He said he ended up with 2,000 unsold baskets on the last day of the lunar year and had to unload them at a city garbage dump. “It was a hard work overall, just to lose VND40 million ($1,920).”
More than 1,000 families from the Sa Dec flower village in the Mekong Delta province of Dong Thap only managed to sell around half of their output. The sale at local markets was as slow as it was in Ho Chi Minh City and other locales, the farmers said.
Nguyen Phuoc Loc, chairman of the Sa Dec Pot Plants and Ornamental Animal Association, said the main reason was the difficult economy. “People did not spend much on flowers [as usual] for the holiday.”
Huynh Van Thai from Ben Tre Province, also in the Delta, brought around 500 potted mai (Ochna integerrima) trees to Ho Chi Minh City, but only sold around 300, losing VND250 million ($12,000) in the process.
Thai said many people came to his booth to sightsee rather than to shop.
Doan Van Hoa, a pot plant farmer from Ben Tre, lost nearly VND300 million ($14,400). He said in addition to investing in the plants, he spent significant sums to rent the boats and vehicles needed to transport the plants for sale, but half of them were unsold.
In Da Lat in the Central Highlands, known as “the city of flowers,” many blossoms were also seen abandoned in the gardens as farmers did not want to waste their effort collecting them.
Nguyen Phat, a farmer in town, estimated this year’s crop caused him losses of more than VND200 million ($9,600).
Many farmers did not even manage to sell a single flower as the plants bloomed late due to this year’s unseasonal rains.
Phat’s neighbor Loan said she had intended to save the late blossoms for the full moon celebrations. “But it is costly to rent a freezer to keep the flowers, so I decided to just throw them away,” she was cited as saying in the report.
She said she had borrowed VND100 million ($4,800) to start a new crop.
Pitfalls of a speculative business
Farmers blamed their failure on the lack of a system designed to forecast market demand.
They simply based their preparations on last year’s demand, optimistically planting a bit more this year.
Dinh Ngoc Tung, in charge of economic management of My Tho, said the farmers first said they would plant enough to produce 700,000 flower baskets and then suddenly raised the cultivation area by eight hectares, enough for 200,000 more baskets.
Tung said besides the flowers that remained unsold in Ho Chi Minh City and other markets, local farmers left around 10 percent of their outputs in their gardens.
Figures from the agriculture authorities in Lam Dong Province, which includes Da Lat, said flower farmers expanded their farms by 30 percent just for the holiday, not to mention the 30 percent of vegetable farmers that switched to flowers.
Nguyen Van Chau from the agriculture department said everything happened at the worst possible time, with demand decreasing in all major markets including Ho Chi Minh City, Hanoi and Da Nang.
Tran Huy Duong, chairman of the Da Lat Flower Association, said the flower business is generally considered more profitable than agriculture, so the fact that flower farmers in Vietnam have been losing year after year is a cause for concern.
Duong said farmers in Da Lat lack of information about supply and demand within the market.
He said the governments of Vietnam’s neighbors such as China, Taiwan and Thailand are doing a better job in making cultivation plans for the farmers based on the varying market conditions.
Such governments set up special cultivation areas with all the necessary facilities and ensure sufficient customers, while the farmers only have to rent land and adjust their labor according to weekly climate and market updates, Mai said.
He said the Vietnamese government should at least develop areas with convenient conditions like Da Lat, with its cool highlands weather, into a supply of flowers for export so that farmers may earn better incomes.
Vo Mai, vice chairman of the Vietnam Gardening Association, told Tuoi Tre that the dilemma plaguing flower farmers is causing trouble for Vietnamese farmers in general.
“The flower problem is another piece of evidence supporting the fact that Vietnamese farmers are still producing ad hoc and still struggling on their own to find customers,” Mai said.
He said the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, and local authorities are “responsible” for providing warnings and market forecasts, but they have failed to do so.
“Farmers have been planting whatever they want without the authorities knowing, let alone controlling. Any agricultural planning policies so far have stopped at theories and had no realistic meaning at all,” he said.
Mai said the local media have been reporting every day over the past two years about the economic crisis, slowdowns, bankruptcies, lay-offs and wage cuts, so farmers must become privy to such information and receive help in the form of analysis of their specific market.
He said more practical guidelines should be handed down by dealers, who best know the demand within particular markets.
But he also called for better implementation of agricultural insurance policies, which have only been run in trial form for a small number of products, in case the farmers continue to lose money.
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