Taking the lead in company - farmer cooperation model in agricultural production and consumption, Vo Thi Thu Ha Export and Import Co., Ltd has made significant contributions to agricultural development in Dong Thap province, not only supporting farmers to produce and sell rice, but also helping them to adopt new farming practices.
Dong Thap province is a big producer and exporter of rice and aquatic products. Every year, local businesses export a large volume of rice to the world market. To tap this advantage, Vo Thi Thu Ha Company built six rice processing plants in Sa Dec town and Lap Vo district with a daily capacity of 4,000 tonnes. The company exports more than 600,000 tonnes of rice on average each year and purchases most rice in Tam Nong and Lap Vo districts and rice operatives with big sample fields in the province. The company’s products are mainly for export. In 2012 and 2013, the firm focused on the South American and Asian markets. Vo Thi Thu Ha Company is looking to exports to Africa and Europe.
To meet growing export demand, in late March 2013, Vo Thi Thu Ha Company decided to invest VND150 billion to build Loc Anh rice drying, milling and polishing facility with a daily drying and milling capacity of 1,000 tonnes and a polishing capacity of 1,000 tonnes plus a 100,000-tonne storage facility in Tam Nong district. The plant, expected to employ 300 local workers, will purchase rice in Tan Nong district and surrounding localities like Cao Lanh, Tan Hong and Dong Thap Muoi.
Currently, Vo Thi Thu Ha Company guarantees the consumption of rice for farmers and this business is strongly supported by farmers. While Vietnam is proud to be a top rice exporter, its farmers remain poor because they usually have to sell at low prices when they have bumper crops. This is actually the biggest problem of Vietnamese agricultural sector now. To deal with this bottleneck, Vo Thi Thu Ha Company always pays attention to market and price issues, directs farmers to use rice varieties, fertilisers, plant protection chemicals and technologies to ensure the quality and standards of exported agricultural products as required by customers. With its current activities, Vo Thi Thu Ha Company not just buys, trades, sells and exports products, but also heads towards efficiency and sustainability through its direct cooperation with farmers to make quality products as required by importers.
With the support of the Provincial Party Committee and Provincial People’s Committee, and competent provincial departments of Dong Thap, Vo Thi Thu Ha Company has contacted farmers and cooperatives with large sample fields to discuss product consumption orders. Farmers feel relieved and excited about this option and they have strong consensus on purchase prices proposed by the company. Based on market prices in specific time, the company raises the price by VND200 per kilogramme of unhusked paddy at the field. Payments are made in cash through cooperatives. The practical effect has been demonstrated by a growing purchase volume since this business model was kicked off in the summer-autumn crop in 2012. After four crop seasons (summer - autumn 2012, autumn - winter 2012, winter - spring 2012 - 2013, and summer - autumn 2013), the company purchased 28,800 tonnes of paddy from 4,800 ha of paddy fields. By adding VND200 to each kilogramme of rice purchased, the company gave an extra of VND5.76 billion of profits to farmers. Besides, the firm granted VND864 million to cooperatives for operating management improvement. Based on cooperation results, Vo Thi Thu Ha Company has frequently worked with local authorities, leaders and cooperatives to draw practical experiences to better the product consumption model currently applied to large sample fields and discuss solutions to existing drawbacks of the model. Doan Van Hien, Deputy General Director of Vo Thi Thu Ha Company, said: “The biggest benefit of agricultural product production and consumption model is helping farmers raise their awareness of market mechanism, understand standard-based production, and build a collective brand name. These are fundamental factors to develop the market and improve agricultural value.”
In answer to the question “Isn’t your company afraid of loss when it purchases rice at a higher price than the market, he replied with laughter that: “Our company purchases all products from farmers with the heart of a company that wants to support farmers. They trust us and we trust them too. We always go with them to boost productivity, quality and competitiveness of products on the market. In nature, the complete product consumption is a mutually beneficial synergy model. The paddy quality is better guaranteed than purchased from merchants because of avoiding rice mixture. The company meanwhile earns more benefits because of lower intermediate costs. It is natural for us to pay higher for better quality rice. We bring profits traditionally in the hands of merchants to farmers.”
However, the biggest difficulty in implementing this product consumption model is the lack of guidance policies. Many businesses are unsuccessful with the large sample field model, thus eroding the trust of cooperatives and farmers. To deal with this weakness, Hien recommended more specific policies, priorities and incentives for businesses engaged in large sample field model. Besides, policies necessarily direct enterprises to invest in formulating reasonable rice prices which ensure profits for farmers and enterprises and to minimise risks in rice production and business. He emphasised: “If all current problems are resolved, the product consumption model will be replicated and developed to raise the rice value-added chain and raise the position of Vietnamese rice on the international arena”.
Thanh Tam
Vietnamese
