VietNamNet Bridge – The large-scale rice production model that has helped farmers earn higher revenues than the traditional model, has been adopted in most provinces in the Mekong Delta.

In Can Tho City, for instance, the area under the new model has risen from 400ha during the summer-autumn crop in 2011 to over 9,000ha this year. More than 5,100 households have joined hands to create 41 large-scale fields.

Pham Van Quynh, director of the Can Tho Department of Agriculture and Rural Development, said the new model has spread rapidly in the city because it has brought 15-20 per cent more benefit than the old models.

The benefits include the use of advanced technologies, higher yields, and, especially, farmers' easier access to inputs, and their ability to sell their products easily.

Doan Tri Vung, deputy director of the Dong Thap Department of Agriculture and Rural Development, said farmers in his province embraced the new model.

As a result, ploughing, sowing, and fertilising had all been mechanised on lands that now measure 100-200ha.

Dong Thap has nearly 1,600 ha in the districts of Tam Nong, Thap Muoi, and Tan Hong under the large-scale rice production model.

During the last summer-autumn crop, these fields managed to save around 30kg of seeds and fertilisers per hectare, resulting in VND2.5-3 million more profits each.

More than 6,400 households in Long An Province pooled over 7,800ha this year.

The large fields in the districts of Moc Hoa, Duc Hue, Vinh Hung, and Tan Thanh saw higher yields of 6.5-7 tonnes of quality paddy per hectare which fetches VND150-200 more per kilogramme.

Le Minh Duc, director of the Long An Department of Agriculture and Rural Development, said farmers should join this advanced farming mode which has shown effectiveness through lower production costs and higher yields and quality.

But selling their output remains one of the problems the new model has been unable to fix for farmers, according to the An Giang Department of Agriculture and Rural Development.

Many farmers in An Giang and other Mekong provinces are reluctant to join the new production model because they have little confidence in the co-operation between farmers and buyers.

Vung from the Dong Thap agriculture department said many rice-purchase contracts signed between farmers and food companies were violated.

"When paddy prices go down buyers put pressure on farmers, and when rice prices are high, farmers force buyers to raise prices," he said.

"The authorities are responsible for naming enterprises that will sign paddy purchase contracts with farmers."

Entrepreneurs needed to co-operate with farmers if the new model was to become sustainable, he said.

"To reach sustainable rice production, consumption plans must be made along with farmers' production plans."

Property market remains mired

The property market inventory is not very high, according to a recent report by the Ministry of Construction to Deputy PM Hoang Trung Hai.

The HCM City Department of Construction said in the first half 1,877 apartments out of the nearly 14,500 on the market by the end of last year were sold, and the total inventory remaining is valued at VND22 trillion (US$1.04 billion).

But many experts disagree with the figures, saying if the inventory levels are indeed so low, it will not have a big impact on the property market.

The stagnant market is causing anxiety among prospective buyers, who are, in many instances, faced with the threat of losing their money.

Customers of Petrolandmark project in District 2, for instance, have been locked in a dispute with the developer over the inordinate delay in handing over their apartments. My Phu Tenement by Petroland in District 7 faces the same situation.

In late 2010 customers signed contracts to buy apartments at My Phu and paid 70 per cent of the cost on schedule, with the remaining 30 per cent to be paid on delivery.

Petroland promised to hand over the apartments by the end of September 2012. But by June 2013 even the facade was not completed.

Many developers, to mitigate what is a critical situation, have converted their projects from commercial to "social" housing (for beneficiaries of social welfare schemes).

The Department of Construction has received 10 applications for such conversions but approved only two, including a tenement to be turned into a hospital.

Rice exporters cancel contracts

The increase in domestic rice prices since June 2013 is one of the major reasons for the recent rash of cancellations of export contracts.

According to Thoi Bao Kinh Te Sai Gon (Sai Gon Economic Times) news magazine, the volume of rice involved in the cancelled contracts was nearly one million tonnes.

Exporters said export prices picked up at a slower pace than domestic rates, leading to potential losses on contracts signed earlier when prices were low. The penalties for cancelling contracts are less than the potential losses, so rice exporters are willing to go down that path and pay the penalties, one export firm explained.

Lam Tuan Anh, director of the Ben Tre-based Thinh Phat Food Company, said Thailand had sold more than 100,000 tonnes of 5 per cent broken rice at $440 per tonne, making it hard for Vietnamese companies to sell at $410. So the FOB price of 5 per cent broken rice fell to $405 on Monday.

The general director of Docimexco in Dong Thap, Le Truong Son, told the Sai Gon Economic Times that China entered the harvest season in August, leading to lower demand for rice imports there.

Vietnamese exporters are awaiting the return to the market of traditional importers like Indonesia and the Philippines.

Domestic rice prices are hardening, but farmers do not benefit since most of them have already sold their stocks.

Foreign institutions forecast Vietnamese rice prices to continue to rise. But the VFA noted that globally supply is higher than demand, with India and Thailand likely to liquidate their inventories, posing a challenge to Vietnamese exports.

According to the Southern Plant Protection Centre, by early August farmers had harvested 1.1 million hectares of the 1.68 million hectares of land in the Mekong Delta under the summer-autumn crop.

Source: VNS