Farmers harvest the summer-autumn rice crop in Mekong Delta's Hau Giang Province's Vi Thuy District. The Government runs a programme encouraging enterprises to buy 1 million of tonnes stockpiling rice in the delta to support local farmers when the price of rice is low.— VNA/VNS Photo Duy Khuong

HA NOI (Biz Hub) — Enterprises began purchasing 1 million tonnes of rice for stockpile in the Mekong Delta from Saturday under a Government programme that aims to ensure farmers make a profit.

The purchase, carried out at the time when the farmers in the nation's biggest granary have harvested their summer-autumn rice, will last until the end of next month.

The programme for the harvest season is a month ahead of previous harvests.

The Government has covered 100 per cent of interest rates on loans for a three-month term for businesses buying rice. Assigned by the Viet Nam Food Association, 115 eligible enterprises have joined the programme with a targeted amount in each province. For example: Long An Province 91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang 10,000-15,000 tonnes.

According to leaders of Vinh Hung District of Long An Province, farmers have been waiting for enterprises.

The price fixed by the Ministry of Finance is VND4,142 average per 1kg of unhusked rice.

According to the association, with such a low price, plus difficulties in export markets, the programme could only guarantee a low profit for farmers, less than the 30 per cent expected by the Government.

Head of the sales department of the Dong Thap Food Company, Dang Van Khuong, told the Voice of Viet Nam (VOV) that a 30 per cent profit could only be gained if the unhusked rice was sold at VND5,400.

He also said his company would only buy rice under the market price.

Minister of Agriculture and Rural Development Cao Duc Phat had also admitted it was a problem, but it could not be settled during the economic downturn.

Other support policies would be worked out to help both businesses and farmers, he said.

For example, a special preferential credit programme would be provided to farmers so they would stockpile their products.

But in the long run, he said, there must be stable contracts signed between the two sides to ensure an outlet for farm produce, particularly rice.

The ministry has also worked with localities in another programmes to shift the focus on poor quality farming land from rice to other cash crops which the country had to import, such as maize or soya bean.

Earlier this month, in a meeting to seek solutions to consume farm and aqua produce, Deputy Prime Minister Hoang Trung Hai requested the association guide their business members to buy rice.

Any businesses found to cause damage to the export enterprise community and farmers must be excluded from the association, Hai said.

However, according to many businesses, their biggest challenge was the large stockpile of rice from previous seasons.

Managers of the Docimexco JS Company in Dong Thap Province said that after being allocated to buy 15,000 tonnes of rice, they marshalled human resources, cash and means of transport.

But due to the fall in the rice price after the stockpile of the last winter-spring season, the company still had 30,000 tonnes in storage, despite looking for partners to export the remainder.

Association chairman Truong Thanh Phong assured businesses that the rice market would pick up from July.

The association figures showed Viet Nam had exported 2.79 million tonnes of rice in the first five months, an increase of about 10 per cent from the same period last year.

In June, some 750,000 tonnes were expected to be exported, raising the exported figure in the first half this year to 3.5 million tonnes, 100,000 tonnes up from last year's corresponding period. — VNS