Farming low-emission rice yields an additional 10 million VND per hectare

On March 4, Minister of Agriculture and Rural Development Do Duc Duy chaired a conference on rice production and consumption in the Mekong Delta. The event was attended by Deputy Minister Tran Thanh Nam, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, Deputy Governor of the State Bank of Vietnam Dao Minh Tu, and Deputy Minister of Foreign Affairs Nguyen Minh Hang. Additionally, representatives from the Ministry of Agriculture and Rural Development, provincial authorities, enterprises, and rice industry associations participated in both virtual and in-person modes.

Kien Giang's outstanding advancement in the program

At the conference, Le Huu Toan, Director of the Department of Agriculture and Rural Development of Kien Giang Province, underscored that rice farmers in the region have maintained profitability, with earnings ranging from 23 to 25 million VND per hectare after a comprehensive cost accounting, despite the year-on-year decline in rice prices.

Kien Giang pro-actively implemented the one-million-hectare high-quality, low-emission rice program in order to confront market challenges, which was consistent with the Mekong Delta's green growth strategy for 2030. At present, the province has effectively implemented the initiative on more than 69,000 hectares and intends to increase this to 100,000 hectares by 2025.

Kien Giang's rice program comprises nine agricultural models, four of which have already produced harvests. In accordance with Le Huu Toan, the program's strict adherence to the low-emission rice production protocols has substantially increased productivity, resulting in increased profits for farmers. In particular, farmers have been able to earn 33–35 million VND per hectare, which is an increase of approximately 10 million VND per hectare compared to conventional agricultural practices.

Kien Giang has implemented proactive measures to reduce the risks associated with price volatility, such as the structuring of seasonal crop cycles to prevent the occurrence of simultaneous large-scale harvests in multiple localities. This could otherwise result in market congestion and excess accumulation in the fields. This strategic approach protects farmers and producers from potential losses during price fluctuations.

Minister Do Duc Duy and Deputy Minister Tran Thanh Nam were commendatory of Kien Giang's implementation of the program and encouraged other provinces in the Mekong Delta to investigate and broaden the model. Additionally, the Deputy Minister underscored that the Ministry's production guidance is dependent on real-time weather patterns and irrigation conditions. He advised localities to act proactively within the prescribed framework to optimize efficiency and outcomes.

To mitigate vulnerabilities during market fluctuations and ensure the sustainable development of the rice sector, Toan recommended that localities collaborate with enterprises to promote contract-based rice cultivation. Also, he promoted the establishment of processing facilities within raw material production zones to improve efficiency and decrease logistical expenses for farmers and cooperatives. Nevertheless, he emphasized that these facilities should principally function as temporary storage units or preliminary processing plants, rather than as locations for the storage of finalized products.

Toan emphasized the significance of early and strategic market access in order to assure timely production planning, in addition to policy and credit incentives. He also underscored the necessity of more robust communication strategies to reinforce the mutual benefits of the rice value chain, thereby guaranteeing long-term sustainability and profitability for all stakeholders.

Ready to process rice for farmers

Mr. Truong Manh Linh, Executive Director of the Rice Division (Tan Long Group), stated that the company has acquired 200,000 tons of rice for drying, storage, and processing since the commencement of the season. This is due to the fact that the company is a direct participant in Hanoi. The anticipated total purchasing and storage capacity for the winter-spring crop is approximately 300,000 tons.

The leadership of Tan Long Group confirmed that the company is presently receiving, drying, and storing rice for farmers and agricultural cooperatives during the current period of declining rice prices. The silos of the Hanh Phuc Rice Mill have a drying and storage capacity of up to 120,000 tons.

"Our silos are capable of storing substantial quantities of rice for extended periods while ensuring that the quality remains high." In addition, we guarantee farmers' transparency in the processing and storage procedure," underscored Mr. Truong Manh Linh. He also emphasized that Tan Long is the first enterprise in the Mekong Delta to implement a support model for farmers.

He also noted that the Mekong Delta still has a scarcity of enterprises that are investing significantly in rice processing, as a result of the challenges associated with obtaining capital, particularly medium- and long-term funding. "Storage necessitates a significant amount of capital. Without it, businesses are forced to continuously buy and sell instead of maintaining stock," Mr. Linh stated.

Consequently, Tan Long's leadership suggested that the State Bank of Vietnam implement preferential policies and relax loan conditions. Furthermore, they urged the authorities to increase logistics investment in the Mekong Delta to prevent congestion during prime harvest periods.

Mr. Do Ha Nam, Vice Chairman of the Vietnam Food Association, and Dr. Bui Ba Bong, Chairman of the Vietnam Rice Industry Association, also expressed concern regarding credit access. They recommended preferential policies on loan terms and interest rates to help businesses invest in production, purchase rice for storage, and use commodities as collateral for loans.

Expanding access to high-value markets, such as Japan and Europe, is another proposed solution, as these markets are less susceptible to general price fluctuations.

At the same time, strengthening linkages within the rice production, processing, and export value chain is also essential. The connection between farmers, cooperatives, and enterprises continues to be the rice industry's most vulnerable point. Dr. Bui Ba Bong, former Deputy Minister of Agriculture and Rural Development, affirmed that the one-million-hectare high-quality, low-emission rice initiative will address this issue. Consequently, it must be implemented as soon as feasible.

Banks are prepared to engage in the initiative

The Mekong Delta is currently benefiting from a variety of preferential policies from the Party and the Government for investment and development, according to Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, in response to concerns regarding credit access. The banking sector provides the Mekong Delta with the most considerable support in the rice sector.

Affirming the State Bank’s commitment to supporting businesses in the rice industry, Deputy Governor Dao Minh Tu acknowledged the existing challenges and confirmed that the bank has been working with enterprises to facilitate medium- and long-term investments aimed at enhancing storage capacity.

Nevertheless, he also underscored the necessity of addressing this issue from the perspective of both the banking sector and enterprises in order to mitigate risks and guarantee that businesses are able to repay their debts.

Deputy Governor Dao Minh Tu supported the one-million-hectare high-quality, low-emission rice initiative in the Mekong Delta, describing it as a transformative approach for the rice industry. Rather than fragmented, individual operations, the emphasis should be on interconnected partnerships to generate collective strength and broader economic benefits.

The Agricultural and Rural Development Bank (Agribank) has already allocated a credit package of VND 30 trillion to support this initiative." He also stated that the State Bank is prepared to provide additional financing if the funds are disbursed early.

* Exchange rate: 1 USD = 25.780 VND (Vietcombank)