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The "Big man" wants a monopoly to sell rice: losing trillions still keep?

(06/21/2017)

The "Big man" wants a monopoly to sell rice: losing trillions still keep?

The Vietnam Food Association (VFA) does not allow exporters to sell rice to some concentrated markets until the two food corporations (Vinafood 1 and Vinafood 2) ended the transaction and signed the contract.



Monopoly, stagnation

The Vietnam Food Association (VFA) does not allow exporters to sell rice to some concentrated markets until the two food corporations (Vinafood 1 and Vinafood 2) ended the transaction and signed the contract.

The basis for VFA to make the above proposal is Item 1, Article 15 of Circular No. 44/2010/TT-BCT dated December 31, 2010 of the Ministry of Industry & Trade detailing some articles of Decree 109/2010/ND-CP dated November 4, 2010 of the Government on rice export business.

Accordingly, "Traders shall not trade, sign rice export contract or allow the buyers to re-export rice to a concentrated markets of signed contracts specified in clause 2 of this Article, Except the case that the Ministry of Industry & Trade approves in writing in accordance with clause 3 of this Article. "


 

Associate Professor Ph.D Duong Van Chin, Director of Dinh Thanh Agricultural Research Center (Loc Troi Group) said this act is clear evidence to the monopoly position in rice exports of VFA.

"Now the Government's policy is to limit the monopoly of Vinafood 1, Vinafood 2 and VFA, abolishing cumbersome procedures to encourage conditional businesses with good quality rice, satisfy the import demands of overseas customers.

However, VFA wants to do with the old way to enjoy benefiting. VFA excuses that the previous regulations have not changed yet. So they apply the old rules, bounding enterprises, it means they want a prolonged stagnation. This is unacceptable.

The progress of social development needs the fast steps. For example, countries that have a need to import rice and the domestic businessmen have conditions for exporting, let them export rice to develop the rice industry of Vietnam.

When many enterprises export much volume of rice, it will encourage domestic production, create conditions for farmers to produce. At that time, the position of Vietnamese rice is more and more stable in the world market" said Associate Professor Ph.D Duong Van Chin .

Therefore, once again he emphasized that the behavior of VFA further strengthens the monopoly position of this association, hindering the development of Vietnam's rice industry, not suitable to the new trend and the Government's undertakings.

He also pointed out that so far Vinafood 1 and Vinafood 2 have been given too many rights, negotiated on many concentrated contracts without any incentive to raise the export prices of Vietnamese rice, offering low prices with unfavorable conditions of delivery.

"Two food corporations have relied on government-to-government co-operation to export large volumes of rice. They sell around 300-400 USD/MT, earning profit about 10 USD/MT. With the amount of rice exporting up to millions of tons, their profit is huge.

It's easy to do that, they just need to sell low-grade rice, mix many varieties of rice together, no need to calculate complicated, separating each variety of rice to sell around 700-800 USD/MT.

This kind of rice export is distorting the rice value chain. This would never improve the Vietnamese rice industry.

Must be let many companies involve in export, each company can sell to a market with the certain volume of rice for 800-900 USD/MT. Many companies do that, the total value of rice export will be 3-4 billion USD, while always selling with cheap price in large quantities, it will never get much money" said Mr. Chin.

Reduced VFA rights, SOE equitization.

With the proposal of the removal of two food corporations, Associate Professor Ph.D Duong Van Chin said that this is still under discussion. However, it is necessary to quickly equitize Vinafood 1, Vinafood 2 for the market economy to be regulated.

"The two corporations make losses trillions but why just keep it forever? When equitization, the member companies will attempt by them self, to find the market and sell.

As for the VFA, reduce its rights. VFA cannot decide on the rice export of member enterprises, distributing benefits to members. The VFA should be a True sense business association" said Associate Professor Ph.D Duong Van Chin.

According to Mr. Chin, many rice importers also expect the private companies can join in trading rice. For example, the Philippines does not want to follow government-government contracts forever because it creates negative, uncontrollable. They expect many private companies join in trading rice to find suitable partners and import at reasonable prices, guaranteed quality rice.

"The trend of privatization is growing, and state-owned enterprises are just waiting, do not want to make changes, and keep the old ways to enjoy benefits" Duong Van Chin emphasized.

Source: The Dat Viet

Link: http://baodatviet.vn/kinh-te/doanh-nghiep/ong-lon-muon-doc-quyen-ban-gao-gao-viet-lai-gap-nguy-3337562/

 

 






 


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