Govt-Led Stockpile Plan Not Benefit Coffee Growers

The Vietnamese government-led plans to stockpile 200,000 tons of coffee beans to prevent a slump on domestic market does not benefit local farmers, according to local farmers and experts.

 

An official from the Dak Lak provincial Service of Agriculture and Rural Development said that the Vietnam Coffee and Cocoa Association (Vicofa)’s plan to stockpile 200,000 tons of beans from Mar 15 to Sept 15 is not opportune because the farmers focus on harvesting in Nov and Dec.

 

“Most of the farmers had borrowed money from traders to buy agricultural materials and sold the beans to them after harvesting,” the official who declined to be named said, adding that the government plans will benefit local companies and traders because the farmers are holding a very small quantity of beans.

 

Dang Van Huy, a farmer in Dak Lak province proposed that to help local farmers, the government should instruct banks to extend debt for them and to offer more soft loans.

 

“The companies will benefit from the stockpile plan while the farmers continue dealing with the fact that agricultural materials prices are surging on falling coffee prices,” Huy said, adding that the floor prices at VND23,000/kg are lower than the production cost.

 

Nguyen Cong Hoang, deputy director of the Vietnam National Coffee Corporation (Vinacafe) to ensure 30% profit for the farmers, the floor prices shoule be at least VND26,500-VND27,000/kg.

 

Coffee prices are falling to VND22,700/kg in the central highlands region, the lowest in the recent three years.

 

The Vietnamese government earlier asked commercial banks to offer soft loans at interest rate of 6%/year for local companies to stockpile 200,000 tons of beans.