Factors Affecting Vietnam Rice Export

John Kenneth Galbraith Biography
October 25, 2022
Ho Model in Economics | Analysis
October 25, 2022

Factors Affecting Vietnam Rice Export

The rice export always receives attention from Vietnamese Government. The Government usually issues many decrees, circulars and directions to instruct Ministries, People’s Committees, and Vietnam Food Association (VFA) to monitor export activities every year.

Noticeably, in 2010, with an aim to encouraging the development of agriculture, Vietnamese National Assembly issued a Resolution 55/2010/QH12 on agricultural land use tax exemption and reduction. Farmers are exempt for agricultural land areas within agricultural land quotas and exempt 50% outside agricultural land quotas (thuvienphapluat, 2010).

Food security is always one of the top priorities of Vietnamese Government. To ensure adequate supplies of rice grains to meet domestic needs and to export, support policies are directed toward expansion of paddy production areas and the development of irrigation infrastructure. Ministry of Agriculture and Rural Development bases on annual reports of rice export results and forecasts volumes of rice produced as well as domestic demands in the following year. Besides, the Ministry will make adjustments and announce the volume of rice for export, which helps rice businesses fully understand the market demands and initiate plans for exporting rice.

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In addition, the Governor of the State Bank of Vietnam keeps track of activities of the State Commercial Banks so as to timely instruct them to ensure a reserved capital since the beginning of each year and to meet loan demands of farmers and rice businesses. What is more, the Governor of the State Bank always takes an active part in dealing with requests of the State Commercial Banks on extending loans which exceeds 15% of their equity to Vinafood 1 and Vinafood 2 (intellasia 2010). Of course, Vinafood 2 plays an important role in providing provinces in MRD including Long An with large rice export contracts. Also, enterprises are supported 100% interest rate when procuring rice for temporary storage for a maximum of three months (thu vien phap luat 2010), which helped them release pressure for rice procurement to achieve the target set by VFA. In addition, they can ensure available supply of rice for next crops or even wait for peak periods when selling prices go up.