High production cost and low yield corrode the profit of winter-spring rice crop

Stressful rice crop

Over the week, Mr. Pham Van Nhieu, director of Hoa Thuan Agricultural Cooperative (Mong Tho A commune, Chau Thanh district, Kien Giang province) has been busier. He has to update information about the rice price chart regularly to inform his cooperative’s members, who are engaging in rice production on over 900 ha area padding fields.

The harvest of the winter-spring rice crop is expected to grab up in the coming days as two-thirds of the area has been harvested. The consumption of rice seems to be smooth thanks to favorable weather and traders directly arrived at their padding field to purchase.

Mr. Nhieu shared: “This year winter-spring crop produced around 100 kg per 1,000 m2 lower year on year, the selling price is also much lower. In the main harvest time, the price of rice continues to reduce by VND 50,000- 70,000 per kg. Prices of two main force rice varieties namely Dai Thom 8 and OM18 are VND 5,700 per kg and VND 5,650 per kg respectively. Expensive cost, unexpected low yield, and plummeted price have eroded profits.”

Hoa Thuan I Agricultural Cooperative had to call on an urgent meeting to discuss production organization as they can not leave the field while there are only 20 days more to clean up the field to prepare for seed sow of summer-fall rice crop of 2022.

According to Mr. Nhieu, prices of agricultural materials are surging. DAP fertilizer price jumps to VND 1,2 -1,3 million per bag and investment cost increases to VND 2.7-3 million on every 1,000 m2.

The profit of winter-spring rice crop is low while the prices of materials, oil/petroleum, machines hiring, and labors soar that hindering the reinvestment for production. Despite solutions such as sparse sowing, balanced fertilization, and application of mechanization the cost can not be reduced further.

Oil and petroleum prices increase in “G hour”

Mr. Huynh Quoc Toan, head of Chau Thanh agriculture and rural development office in Kien Giang shared that in the 2021-2022 winter-spring crop, farmers in the district harvested over 4,500 ha of the crop with an average yield reaching 6.7 tons per ha. However, rice price is relatively low, aided by surged investment cost leading to a significant reduction in profit.

This year, Mekong Delta farmers have to shoulder many burdens in rice cultivation including the increasing prices of agricultural materials, especially fertilizer and plant protection agents. This year's winter-spring crop, many areas have been affected by pests and diseases, and the unusual weather has reduced rice yield.

In Can Tho city, Vinh Thanh district alone has the latest winter-spring rice harvesting area in comparison to other areas in the city.

Mr. Le Minh Thang of Thanh Thang commune, Vinh Thanh district, said that the family produced 3 hectares of Dai Thom 8 rice during the winter-spring rice crop, which was harvested a few days ago. This year's rice cultivation offers several benefits in terms of weather, sufficient water to provide rice, and fewer impacts from drought and salt. However, after the rice harvest season begins, the price lowers, and farmers receive no more profit than they did during the winter-spring rice crop of 2020-2021.

Despite the low profit, Mr. Thang's family cleans the land after harvesting winter-spring rice to prepare for the production of the following summer-autumn rice crop and will continue to use modern scientific techniques in manufacturing to cut costs while increasing product value.

Connecting to reduce risks

Mr. Nguyen Ngoc Hine, deputy head of agriculture and rural development office in Vinh Thanh district, Can Tho city added that Vinh Thanh district farmers produce roughly 25,100 hectares of winter-spring rice in 2021-2022, with an expected total production of around 183,230 tons of commodity rice. Vinh Thanh concentrated on helping farmers in the use of sophisticated strategies such as "3 decrease, 3 increase," and "1 must 5 reduce" into production in order to accomplish this goal.

Rice variety structure has been given specially attention by Vinh Thanh district. The authority also instructs farmers to sow seeds appropriately to the practical situations of production and market. According to rice farmers, the output of winter-spring rice from 2021 to 2022 will be beneficial if a large number of businesses and merchants participate in contract signing and settling purchases at the start of the crop and throughout harvest preparations. Which ranges from VND 5,600 to 5,700 per kg for Dai Thom 8 rice variety, VND 7,000 per kg for fragrant rice RVT, and 5,400 VND/kg for OM5451...

Mr. Truong Kien Tho, Deputy Director of An Giang's Department of Agriculture and Rural Development, stated: "In this year's winter-spring crop, An Giang has sown nearly 230,000 hectares and harvested over 25,000 hectares, with an average yield of 7.01 tons/ha, 0.13 tons/ha less than last year during the same period."

The current rice price has slightly reduced a couple of dongs per kg against that of the previous weeks, so right from the start of the crop, An Giang has planned to connect 115,100 ha of rice crop with 16 businesses. Businesses are already signing contracts of rice consumption for farmers in the winter-spring crop 2021-2022 on an area of 37,450 hectares, or 32.53 percent of the winter-spring crop plan. 

Specifically, An Giang Import-Export Joint Stock Company (Angimex) owns 500 hectares, An Giang Import-Export Company owns 1,000 hectares, Tan Vuong Company owns 1,000 hectares, Minh Phat Private Enterprise owns 800 hectares, Tan Thanh An Private Enterprise owns 400 hectares; seed production enterprises own 2,000 hectares, traders own 750 hectares, and Loc Troi Group Company owns 31,000 hectares.

"Thus, in the winter-spring crop 2021-2022 in An Giang, merchants purchased 200,587 hectares with a 1.5 million ton production, while the remaining 29,204 hectares with output totaling 219,030 tons have yet to be purchased. To utilize all remaining lands and rice output from the winter-spring harvest, local governments must welcome and organize enterprises to purchase in order to mitigate risks for farmers as input costs rise," stressed Mr. Truong Kien Tho, deputy director of An Giang Department of Agriculture and Rural Development.

Currently, rice prices in the Mekong Delta continue to fall slightly as farmers are entering the winter-spring rice harvest season in 2021–2022. The field's highest rice price is averaged at VND 5,600 per kg, while the average price is VND 5,429 per kg. The warehouse's maximum price for normal rice is VND 6,950 per kg, while the average price is VND 6,420 per kg.

In An Giang, which is presently in the winter-spring crop, the quality of many rice varieties remained unchanged compared to the previous week, but the price of common rice varieties and IR 50404 declined slightly by VND 5-10 per kg. Specifically, OM 18 is priced between VND 5,800 and 5,850 per kg, OM 5451 is priced between VND 5,500 and 5,700 per kg, IR50404 is VND 5,200 and 5,300 per kg, and Dai Thom 8 is VND 5,600 and 5,800 per kg, a decrease of VND 100 per kg.