Vietnamese farmers disillusioned with agriculture

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A woman in Can Tho dries rice from the summer-fall crop that she has been unable to sell. Photo courtesy of Tuoi Tre

Farmers in the Mekong Delta province of Kien Giang eagerly wait for the sun to shine so that they can dry their stockpiled rice, making use of any space including churchyards, though in many cases the grains are covered in black fungi.

They said prices have dropped again, but even if they are willing to sell at losses there are no buyers.

Tuoi Tre newspaper quoted analysts as saying the government needs to improve policies to support farmers or many will think about leaving for cities to work.

Le Van Binh, a farmer in the province's Tan Hiep District, said he has lost around a quarter of his VND48 million (US$2,260) investment in the summer-fall rice crop.

With the summer-fall crop usually affected by heavy downpours, farmers only need prices to come down a little to make losses, he said.

Locals said prices have not gone up from below VND4,000 (US20 cents) a kilogram since exporters started buying rice in the area on June 15.

Nguyen Minh Nghia, deputy head of the district Department of Agriculture and Rural Development, said rice prices have been declining for the last two years.

"Many rice farmers are not making enough to eat."

Le Van Lo, 76, of Dong Thap Province, counting his earnings from the crop several times, said: "It's not enough to pay my debts."

He looked bitter, saying three generations of his family had to work in the field but did not earn enough.

His neighbor, Chin Toan, after doing the math for himself, said he might give up agriculture.

He makes VND70 million ($3,306) a year from his paddy field, or VND1.2 million a month for each of five people in his family.

"It's not good when there are various expenses like food, clothes, school tuitions, medical expenses, and parties."

For rice farmers, anyone owning one hectare is a big farmer, and Toan has 2.5 ha.

But he said he and his colleagues have decided more land just means more losses.

Another farmer named Ba Luc had left his hometown in nearby An Giang Province with his family and moved to Dong Thap to rent five hectares for rice cultivation, but his dreams were shattered soon.

Luc said he would return the land once the two-year lease ends.

"If my family keeps depending on the land, we might become beggars some day," he said.

Vietnam's rice output has been increasing in recent years, and the government has tried to keep prices stable for farmers by getting banks to lend to reliable exporters to buy rice and stockpile it.

But analysts said the scheme has not helped farmers since the exporters do not buy directly from farmers, and intermediaries decide the prices.

Truong Thanh Phong, chairman of the Vietnam Food Association, said Vietnam should stop thinking about liquidating its rice stocks through exports, and instead persuade farmers to grow other crops for more export value.

Local authorities should instruct farmers to reduce cultivation of the risky summer-fall crop, and instead grow other plants that fetch higher value, he said.

Rice export prices have dropped this year by US$20.23 a ton to $431.45, with nearly 1.7 million tons still in stock.

Vietnamese prices are 20-30 percent cheaper for the same varieties of rice compared to those of India, Pakistan, and Thailand, according to figures from the association.

The Vietnam Breeding Association also warned about a likely lack of local meat supply in future even as farms shut down temporarily following extended losses.

The pig population in the country has fallen by 0.52 percent compared to last year, and the poultry population by 2 percent.

Leading breeding company Japfa Vietnam, which accounts for 90 percent of chicken supply in the country, ended contracts with farmers several months ago though the latter had invested in farms for which the company provided animals and feed.

A farmer named Khanh in the southern province of Dong Nai said he had invested more than $1 million in chicken farms following a deal with the Indonesian company four years ago.

"The company has backed out suddenly, and I am left on my own with bank debts."

The company provided chickens, feed, and medicines while the farmers got paid for their labor and taking care of the birds.

Tong Van Huong, another farmer and Japfa partner in the nearby Binh Duong Province, has bought some of the chickens.

But this was also a risk, he said, since he could not tell if the chickens would fetch good prices. "Farming these days is just a matter of luck."

Nguyen Quoc Trung, general director of Japfa, said the company is scaling down its business by half since prices have kept falling below cost (of VND30,000 a kilogram) for the past two years.

The Ministry of Agriculture and Rural Development said pig prices have dropped by 24 percent in the first five months of this year and chicken by half.

Pham Duc Binh, director of Thanh Binh chicken breeding company in Dong Nai, said he has shut down most of his operations.

His company would incur a loss of VND15,000, or around 50 percent, on every chicken it sells, or VND1 billion in a week.

The government recently directed banks to cut interest rates on agricultural loans to 9 percent compared to an average of 12 percent for business, but Binh said he would not borrow even at zero percent given the unstable prices and the high risk of losses.

"Big companies are losing too, let alone a farmer like me."

The Vietnam Breeding Association found that farmers have been selling below cost for more than a year now, and most are scaling down instead of putting more money into their farms.

Nguyen Dang Vang, the chairman of the association, warned about a shortage of meat in around two years as farmers are not letting pigs farrow to save four months of pregnancy and a further four months for the piglets to grow.

"If the farmers are getting rid of sows now, there will be consequences 16 months later"¦ The risk of meat shortage is very high," Vang said.

Nguyen Van Ngoc, deputy chairman of the Southeast Area Poultry Association under whose jurisdiction Dong Nai and Ho Chi Minh City fall, said the situation would also worsen banks' bad debt situation.

The area has around 1,500 chicken farms, all of which borrowed most of their initial investment of VND2 billion ($94,320) each.

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