“Billionaires’ islets” get desolate because of debts

VietNamNet Bridge – There were the “billionaires’ islets” in Mekong Delta, where farmers got rich with their catfish farming. However, the populous and rich land area has become desolate because their billionaires have become moneyless.

 

Billionaires burdened with multi-billion debts

Local farmers have been crippled with debts because of the heavy losses, while the multi-billion dong fish ponds have been left idle. Big difficulties have been enveloping the farmers from all sides. 

Import countries have been trying, this or another way, to cut down the imports from Vietnam. The exports to Russia have slowed down, while the US has ratified the Farm Bill to restrict imports. Other markets including Egypt and the Middle East tend to install barriers against catfish. Italian and Spanish markets have applied safeguard measures.

Meanwhile, the catfish price has been decreasing dramatically due to the hot farming development, which has been going more rapidly than the market development.

While the export prices tend to decrease because of the importers’ policies to restrict the imports, the input farming costs have been increasing because of the high bank loan interest rates.

One year ago, the Prime Minister announced the bailout of VND9 trillion to catfish farmers to rescue the catfish industry. However, the bailout has not yet reached to farmers because of the slow disbursement.

The State Bank has reported that commercial banks have disbursed VND38 trillion for catfish farmers. However, it’s unclear where the sum of money has gone, while farmers keep complaining about the capital shortage.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), very few farmers have accessed the bailout. Other farmers have been struggling violently to survive, but the more they struggle, the deeper they sink in the mud. 

While the feed price and the input cost keep increasing, the sale prices tend to decrease. Farmers have to sell catfish at the prices lower than the production costs.

The tragedy from “civil war”

The “civil war” between seafood processors and farmers has still been violent over the last few years. A senior official of the An Giang provincial authorities said Vietnamese don’t have to compete with any others in catfish exports (the country provides 95 percent of the total output), but they have been competing violently with each other.

Seafood processing companies now only buy 800-900 gr fish. In general, 30-35 percent of the total output is considered “substandard.” The feed price has been increasing rapidly, which has made farmers incur heavy loss and huge debts of up to billions of dong. Farmers don’t have money left for re-investment, which has forced them to sell assets for dept payment, or lease ponds at VND500 per kilo of fish.

The catfish price has been decreasing continuously because Vietnamese have been trying to put difficulties for each other. Exporters try to offer low export prices to scramble for clients, thus giving foreign importers another reason to press the market price down.

Vietnam has determined to rescue the catfish farming and process, which is one of its advantageous industries; after it saw the catfish export turnover down in 2012 and businesses incurring heavy losses.

Experts have suggested adding catfish into the list of conditional business fields, and offering the 0-6 percent prop-up in bank loan interest rates to farmers. They stressed that urgent support should be provided now, or it will be too late.

Nam Phong