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Outlook bright for rice producers
09 | 03 | 2011
Trinh Van Tien from the Agricultural Department’s Policy and Strategy Institute spoke to Viet Nam News about measures to improve rice quality and trading. What is the outlook for domestic rice production this year? Is there anything that has to be adjusted to make it fit in with demand ? World rice production will not change much this year.

Trinh Van Tien from the Agricultural Department's Policy and Strategy Institute spoke to Viet Nam News about measures to improve rice quality and trading. What is the outlook for domestic rice production this year? Is there anything that has to be adjusted to make it fit in with demand ? World rice production will not change much this year. Big consumers such as China, Pakistan, Indonesia and the Philippines are becoming more self-reliant. For this reason, the world market will only experience hiccups when natural calamities occur.

In early 2011, demand will be high but the global supply will be abundant. In Viet Nam, there may be pressures on supply early this year caused by rising rice prices at the end of 2010, drought in the Cuu Long (Mekong) Delta, and torrential rain in south-central provinces. High domestic prices for rice are also likely to be maintained and no sudden changes are expected.

The most significant event this year will be the opening of the Vietnamese rice market to foreign traders as part of its commitment to the WTO. But there are unlikely to be many changes as there things are still much the same.

But continued natural disasters in central provinces last year indicate that climate change is impacting on agricultural production. This requires the agriculture sector to implement a plan to minimise losses. The sector also must improve rice quality and build a brand name for domestic rice.

What opportunities will exist for Vietnamese companies when foreign traders enter?

The entry of foreign companies will cause certain competitive disadvantages because they have advantages in capital, technology and world networks. They, however, will have to cope with difficulties such as the shortage of storage facilities. This will require them to invest time and big sums of money.

The challenges for local rice trading companies include a need to diversify rice varieties and expand markets. Few local enterprises can produce rice on their own land so that they can set specifications to raise the competitiveness of their product.

But when the foreigners do enter, there will be some unbalanced competition as many local trading companies are small and lack the funds to invest in facilities. They mainly run after short-term profits.

However, I think that opening the rice-market door will provide more opportunities than challenges because it will help create a level playing field. The Government has issued a decree setting up conditions for a more equitable and transparent game.

When foreign rice trading companies enter, the number of buyers will increase and so will competitiveness. For this reason, farmers or sellers will have more opportunities. In addition, food security will be ensured because supply and demand will be closely controlled.

How will climate change affect things?

Climate change is both an opportunity and challenge to the country's rice production. In my opinion, the challenge is huge, but the whole process is slow. Temperatures and sea levels will gradually increase, creating major infiltration of low lying, rice growing areas in northern coastal provinces and Cuu Long (Mekong) River Delta.

Climate change will not cause sudden impacts on production if suitable measures are taken to cope. The agriculture sector is improving irrigation systems and embankments, growing protective forests and developing rice strains that can cope – and new crop periods.

How to prevent sudden changes in the price of rice?

The role of market forecasting has been regularly mentioned in the past two years, but little has been done. In addition to training staff for the job, it is imperative to utilise good information sources.

At present, we mainly collect market information from the US Ministry of Agriculture, the Food and Agriculture Organisation, Bloomberg and Reuters. Although their information is good, it can not meet the demands of each specific market.

Meanwhile, Vietnamese offices in charge of trade-promotion overseas have not yet provided much information.

Although Viet Nam is the world's second largest rice exporter, not everyone knows about its rice. Is it because it has not developed a brand name?

It is true that the country does not have national brand names for Vietnamese rice. The quality of Vietnamese rice varies widely and is still listed as a mixture of "different rice varieties." In Thailand, meanwhile, the country has built and promoted its high quality rice under well known world brand names, adding value to a valuable product.

To achieve this, the Thais linked the State, farmers, scientists and businesses with high quality rice growing areas. Viet Nam may learn from this model. — VNS



Source vnnews
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