Chilli prices fell and farmers regret lacking links with businesses

The chili pepper planting area increased sharply

In 2023, Binh Dinh farmers had a bumper chilli crop because chilli prices are sky-high, local chilli (large chilli) costs from VND 25,000 - 35,000/kg. At times, the price of chilli pepper (small chilli) increased to VND 50,000/kg. Therefore, although chilli is a crop that is not encouraged by the Binh Dinh agricultural sector to expand its area, after a successful chilli crop, next year farmers will certainly expand their area.

This year is no exception, according to Mr Le Hoai Lam, Deputy Director of the Binh Dinh Crop Production and Plant Protection Sub-department, the province's chilli area fluctuates continuously depending on the market consumption situation. Because chilli prices were too high in 2023, this year the chilli area in Binh Dinh increased to more than 2,200 ha, concentrated in Phu My, Phu Cat and Tay Son districts.

In the last days of March, in the chilli fields that were in the full harvest in Phu My district, we saw fields of red chilli peppers hanging under a layer of green leaves. The chilli harvest was good, but there was no sign of joy on the faces of the field owners. When asked, it turns out that although chilli has a very high yield, the price is too low, only at VND 4,000 - 5,000/kg, so all farmers are confused.

According to Mr Tran Minh Tuan, Head of the Department of Agriculture and Rural Development of Phu My district, in 2024 the chilli area in Phu My increased suddenly to more than 1,400 ha, an increase of 140 ha more than last year. Phu My residents mainly grow chilli peppers for export to the Chinese market, concentrated in Phu My town and communes of My Hiep, My Tai, My Quang, My Phong, My Trinh, My Chanh Tay...

Ms Vo Thi Anh, a chilli grower in My Phon commune, recalled: In the 2023 chilli crop, she planted 3 acres of local chilli. Due to unfavourable weather, last year the chilli yield was low, only nearly 1 ton/Sao (500m2), while every year the lowest yield was 1.2 tons/Sao.

“However, last year chilli growers in Phu My made a good profit because local chilli peppers from the beginning to the end of the season had prices ranging from VND 25,000 - 35,000/kg, small chilli peppers range from VND 30,000 - 50,000/kg, while in 2022 the highest increase in price of chilli peppers is only VND 12,000/kg. However, this year the price of chilli is tragic, local chilli is only at VND 4,000 - 5,000/kg, and small chilli is only VND 9,000 - 10,000/kg. At this price, growers do not want to harvest because the money from selling chilli peppers is not enough to pay for picking them, and they do not know where to sell them because there are no traders to buy them," Ms Anh lamented.

Mr Tran Minh Tuan, Head of the Department of Agriculture and Rural Development of Phu My district, said that chilli productivity in Phu My this year is very high, with an area reaching 1.7 - 1.8 tons/Sao, an average of 1.2 tons/Sao. However, because the price of chilli is too low, the first crop of farmers fails because the labour required to pick chilli is very high, up to VND 300,000 - 350,000/labour.

“With chilli prices at only VND 4,000 - 5,000/kg, farmers suffer heavy losses. Local chilli peppers must stand at a price of VND 7,000 - 8,000/kg for farmers to break even. With chilli prices being low this year, farmers need to stay calm and not rush to abandon their chilli fields but continue to invest so that future generations of chilli fields can still yield high yields. Waiting for the chilli price to increase, they may be able to ease the problem a little. If you see that the price of chilli is too low and farmers become discouraged and do not continue to invest, then you will be left with nothing", Mr Tuan shared.

It's too late for regret...

Faced with the situation of chilli prices falling miserably like this year, Phu My farmers feel regretful because last year they missed the connection with the Agricultural Product and Food Processing Company, Tran Gia food export food company (abbreviated as Tran Gia Company) is located in Dai Thanh Industrial Cluster, My Hiep commune (Phu My district, Binh Dinh).

According to Mr Tran Minh Tuan, Head of the Department of Agriculture and Rural Development of Phu My district, Tran Gia Company will go into operation in 2021. The Company's salt pepper processing factory has a capacity of 4,000 tons/year. The factory has 64 reservoirs, each containing 60 tons of chilli and 1,000 - 1,200 tons of salt to process into salted chilli products.

At the beginning of the 2024 chilli crop, Tran Gia Company is strongly purchasing chilli from farmers in Phu My district because the chilli season is good. Every day, satellite agents of Tran Gia Company buy and collect chilli peppers in localities where the first harvest is in full swing to import to the Company. According to Ms Thuy, currently, Tran Gia Company purchases about 100 tons of chilli every day. With this year's high chilli yield, it is hoped that Tran Gia Company's 64 chilli reservoirs will be filled with 4,000 tons of chilli.

Also according to Ms. Thuy, if farmers associate with Tran Gia Company, they will have many benefits. For example, last year the partnership was successful, but now the market price of chilli peppers is only VND 4,000 - VND 5,000/kg, the company will also purchase at a price of VND 10,000/kg as signed, chilli growers do not have to worry about losses or hardship. Furthermore, if farmers cooperate with the company for 3 consecutive years, the company will advance 50% of the seed and fertilizer costs. This amount will only be recovered by the Company until it is harvested, without interest. Farmers do not have to worry about some of the initial investment costs, but they will be able to use quality seeds and fertilizers.