Business
Ministry investigates into pricey rice export licence claims
  • By Phuong Dung | dtinews.vn | February 25, 2017 08:13 PM
The Ministry of Industry and Trade has launched an investigation into the claim that firms must pay at least USD20,000 for a licence to export rice at a recent conference.


Rice export industry faces many challenges

During the conference about the relaxation of Decree 109 on rice exports on February 22, HCM City-based ADC Company said it had a 35,000 hectares and 16,000 farmers working on production but has no intention to ask for the licence because of the minimum USD20,000 price tag.

Minister of Industry and Trade Tran Tuan Anh immediately set up an investigation team and asked Deputy Minister Tran Quoc Khanh to lead the team and work with related agencies and individuals to clarify the claim.

Decree 109 has been criticised and many people said that it had distorted the market and barred many firms from exports.

In order to apply for the licence, a firm must have warehousing with a capacity to store 5,000 tonnes of paddy and a mill with a minimum capacity of 10 tonnes of paddy per hour. Their warehouse and mill must be located in the cities and provinces or international ports that have rice export activities.

In order to meet the requirements, firms must spend VND20bn (USD876,000) to VND25bn to expand or built the warehouse and mill or else they have to merge, take extra contracts from big companies or be sold to other companies.

In the past years, the Ministry of Industry and Trade has tried to improve the situation. In January, it abolished a limit the number of rice export companies at 150.

According to the ministry, since the 80s, Vietnam's rice output has been on the rise, making Vietnam one of the top rice exporters in the world. The problem producers now face is how to improve the quality and farmers' incomes.

The lack of diversity, quality and the dependence on the Chinese market are posing challenges to managers. Farmers are having to bear the brunt if the export markets fluctuate. In fact, both the prices and volume of Vietnamese rice are declining because of tough competition.

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