Wood craft villages face strong reduction in output, income due to COVID-19

Tuesday, Sep 28, 2021 08:39

Production in the Dong Ky wood craft village. The village had to reduce production capacity due to impact of COVID-19. — Photo congthuong.vn

Production and income of business households in the Red River Delta-based traditional wood craft villages have reduced due to social distancing measures amid the COVID-19 pandemic, according to the Viet Nam Timber and Forest Products Association (VIFOREST).

The business households have had to reduce production capacity by 62 per cent, according to a survey by VIFOREST​unveiled at the webinar "COVID-19 pandemic and wood craft villages: Impact and necessary policies" held on September 22.

These villages include Dong Ky (Bac Ninh Province), Huu Bang, Lien Ha and Van Diem (Ha Noi), Thuy Lan (Hung Yen Province) and La Xuyen (Nam Dinh Province).

The survey also reported that they have seen reductions of 76 per cent in output and 80-90 per cent in income.

About 70 per cent have had to borrow capital for production and business. Under pressure to pay interest rates for bank loans, some households have resorted to black credit with much higher interest rates than at banks to pay. This is a huge risk, according to the survey.

According to To Xuan Phuc, an expert of Forest Trends, another challenge for them is the increase in input material costs for production. The application of social distancing measures has caused freight and the price of sub-material to rise by an average of 20-25 per cent, while the cost of input wood has surged by 5-10 per cent.

Nguyen Thi Bay, the representative of the Huu Bang Wood Craft Village in Ha Noi, said her village mainly produces household wood products. Since the pandemic, this village has mostly suspended production and the village’s business households have been facing many difficulties.

Therefore, Bay has proposed the State to provide capital support and tax reduction for those households.

She also hopes that the association can act as a bridge connecting the craft villages to export companies so the households can participate in the export production chain. This will help the craft villages create more jobs and raise incomes.

Vu Quoc Vuong, chairman of the Dong Ky Wood and Fine Arts Association, said that Dong Ky mainly produces high-quality goods for export to China. However, in the past two years, this market has almost closed, so the village has faced many difficulties in production and business activities.

Those villages expect the State to provide solutions in terms of loans, land lease, consumption and business renovation. Of which, the most important recommendations are to reduce interest rates of loans and delay payment terms.

Phuc said that from the beginning of July 2021, the Government has issued two resolutions to support people and businesses who are negatively affected by the pandemic. However, the households surveyed confirmed that they could not access the financial support.

The households do not have business or tax payment registrations, so their production and business activities are not recognised by management agencies, he said.

Do Xuan Lap, VIFOREST chairman, said that it is necessary to develop policies to support household businesses in craft villages.

In addition, closer connections should be built between the craft villages and enterprises, association members, and management agencies, he said.

Phuc said the Government should adjust supportive criteria to ensure that the households in craft villages can get the support.

Besides that, the Government should enhance support for the households in converting from business households to enterprises. This change will help households to access State and social support for their development and also helps the State to manage the activities of the craft village in the future, he said. — VNS

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