Recently, economic experts have repeatedly warned that many Chinese traders have been aggressively purchasing a variety of agricultural products in Vietnam. If this phenomenon protracts, Vietnam will undergo an imbalanced development of agricultural product structure. Even, domestic production will fall short of input materials.
Export it but import it back then
In this case, Chinese traders comb valuable agricultural products and foodstuffs in Vietnam like litchi (or lychee), duck eggs and cassava at higher prices than the market rates. Remarkably, they offer much higher prices than Vietnamese merchants do. This forces domestic traders to give voice to competent authorities because they may face shortage of input materials for production.
It is long known that hardworking farmers make a little profit for a litchi season, about VND3,000 per kilo. Sadly, Vietnamese litchi is purchased in bulk by Chinese traders. Then, they package it to export to China. The similar situation also happens to other agricultural products like aquatic products, duck eggs and purple sweet potatoes. After being processed, they export them to Vietnam but on a completely different position.
Prices of processed products are at least 10 times higher than raw ones. This reality forces Vietnam to reconsider its production, processing and exporting of agricultural products. It seems that Vietnamese authorities now only care about the output production, not quality or processing and preservation. A lot of Vietnamese agricultural products exported to the world markets come in unprocessed form with very low value. This creates opportunities for foreign traders, particularly Chinese, to get riches in Vietnam.
Why?
It is obvious that if China’s aggressive purchase of Vietnamese agricultural products prolongs, the agricultural sector will incur costly consequences. Sadly, most Chinese traders are free to purchase Vietnamese products and they do not have any business permits. This multiplies difficulties for local authorities to control the situation. With such a wide margin, they are willing to pay higher for Vietnamese fresh agricultural products. Meanwhile, Vietnamese firms - typical of limited finance, have to join hands together to invest in any product. Then, they have to advance money and provide technical assistance, fertilisers and seeds for farmers or equipment or fuels for fishermen. This reality weakens the capacity of Vietnamese enterprises in competition with foreign traders.
Dr. Nguyen Do Anh Tuan, Director of Agricultural Policy Consulting Centre under the Ministry of Planning and Investment, said: Right from now if Vietnamese authorities lack comprehensive and consistent solutions, the Vietnamese agricultural market will see more negative developments. A typical example is seafood. While seafood is a strategic export of Vietnam, many seafood companies are complaining about seriously insufficient materials for processing because Chinese purchasers pay higher for raw commodities. Besides, the agricultural development planning is being distorted as Chinese are leasing land to grow purple sweet potato and cassava. Farmers are willing to abandon their current crops to grow for China for better incomes. But, the cassava-growing land gets infertile very quickly and other crops hardly live on that land.
To cope with the situation in the coming time, according to experts, the Ministry of Agriculture and Rural Development needs to exercise its power and apply many measures to inform farmers as well as agricultural companies. Besides, it needs to have specific plans and orientations for farmers to grow crops with highest economic value on their land. It also necessarily provides information about agricultural product markets for companies to regulate flows of commodities.
Anh Phuong
Vietnamese
