Establishing an ecosystem for the future rice industry

Establishing guilds to assist farmers

Minister of Agriculture and Rural Development Le Minh Hoan visited and surveyed multiple production and business models in An Giang province on May 12. The surveyed sites include: Dinh Thanh Agricultural Research Center under Loc Troi Group Joint Stock Company and Nam Viet Joint Stock Company.

Mr. Huynh Van Thon, Chairman of the Board of Directors of Loc Troi Group shared: Loc Troi is a pioneering domestic company in the project to grow one million hectares of high-quality specialized rice in the Mekong Delta. Consequently, the project will help farmers from 13 provinces of Western Vietnam to live on rice sustainably.

With an investment of 25 trillion VND for one million hectares of high-quality rice per crop or a total investment of 75 trillion VND for three crops, farmers will earn 120 trillion VND in profits, which is approximately 5 billion USD.

As a result, farmers will earn 45 trillion VND from rice production with an average profit margin of 35%. These projected figures have motivated the government to work on raising farmer incomes and developing rice in association with green growth.

Accordingly, Mr. Huynh Van Thon offered various suggestions and solutions that were centered around three major categories. Firstly, the majority of farmers currently face difficulties in accessing credit sources for agricultural production. Secondly, interest rates for agricultural loans need revision. Thirdly, Loc Troi Group is confident in its capacity to participate in the project to grow one million hectares of high quality organic rice. This project will help the company achieve its vision of "Sustainable development with farmers" by enhancing farmers' livelihoods while also lowering greenhouse gas emissions and protecting the environment.

Minister of Agriculture and Rural Development Le Minh Hoan and the local government of An Giang province supported Loc Troi Group to participate in the project to grow one million hectares of high quality organic rice in the Mekong Delta. The project will be a stepping stone for the agricultural sector of An Giang province as well as the Southwest region.

The Minister suggested Loc Troi Group establish an ecosystem for the future rice industry, instead of focusing on the current rice value chain. Accordingly, the company was recommended to promote investment in research; increase the value of non-rice by-products and the post-harvest rice grain by utilizing straw in crop production, creating handicrafts, utilizing the bran and husk; develop rice grains into medicinal products, and so on.

Minister Le Minh Hoan advised Loc Troi Group to collaborate with farmers and facilitate development of the rice industry. The company needs to actively participate in the establishment of new cooperatives; build an ecosystem for each cooperative, thereby increasing production and business efficiency; improve profits for participating members. These activities will motivate long-term collaboration between cooperatives and the company.

Logically adjust to market fluctuations

According to Mr. Doan Toi, General Director of Nam Viet Joint Stock Company, his business exported approximately 110,000 tons of pangasius for a profit of 660 billion VND in 2022. However, this figure has only reached 78% of the company's plan. Additionally, Nam Viet Joint Stock Company began the operation of the AMICOGEN factory, capable of manufacturing 800,000 tons of Collagen, Gelatin products a year. Nam Viet Joint Stock Company plans to export 130,000 tons of pangasius with an export value of 215 million USD in 2023; the company expects to make 85 billion VND in profit after-tax. On the other hand, the company is preparing to build a SURIMI factory, capable of manufacturing 24,000 tons of Surimi products a year; the projected annual revenue is 40 million USD.

Mr. Doan Toi proposed Minister Le Minh Hoan and other representatives to study and help businesses resolve issues regarding regulations on wastewater standards in aquacultural production. On the other hand, he requested the Ministry of Agriculture and Rural Development to coordinate with the Ministry of Natural Resources and Environment to assist the company in converting rice land to aquaculture land for Nam Viet's 600-hectare aquaculture project in Chau Phu district.

Minister Le Minh Hoan emphasized that businesses need to logically adjust to market fluctuations and the global economy. Namely, he suggested businesses research new models in accordance with market trends, reorganize production and business for adaptability and profitability.