The Vietnam Food Association will start a new rice price insurance scheme soon with aim of ensuring farmers earn a profit margin of at least 40 percent from the ongoing winter-spring harvest.
VFA Chairman Truong Thanh Phong said a recent survey carried out by the association found that the average production cost of the crop was VND2,200 per kilogram, relatively low thanks to favorable cultivation conditions.
Member companies of the association would buy the rice from farmers at a minimum of VND4,000 per kilogram even if market prices fell below that level, Phong said.
The price insurance scheme for the winter-spring crop would be launched after the Tet Lunar New Year Festival, which ends this weekend, Phong said, noting that the margin promised by his association is higher than the 30 percent margin set by the government.
Local farmers therefore should not rush to make distress sales on seeing prices drop, he said.
A survey by the Institute of Policy and Strategy for Agriculture and Rural Development found that farmersââ‚¬â„¢ profits from last yearââ‚¬â„¢s winter-spring crop fell by between 8.3 and 31.2 percent due to high fertilizer and pesticide costs.
Pham Van Du, deputy-director general of Vietnamââ‚¬â„¢s Department of Crop Production, said Thursday that harvest of the winter-spring crop began early this week in the Mekong Delta, the countryââ‚¬â„¢s largest rice growing region.
Professor Vo Tong Xuan, one of Vietnamââ‚¬â„¢s leading rice experts, said he is expecting a bumper harvest from the 1.6 million hectares of this crop.
While other countries like India, China, Pakistan, the Philippines and Thailand have seen declines in rice production due to bad weather conditions, Vietnam will certainly have a bumper crop, Xuan said.
The rice expert however said itââ‚¬â„¢s hard to predict how much farmers could earn from this crop as export prices are determined by various factors, including the management of the Vietnam Food Association.
Source: Tuoi Tre