- Published on Wednesday, 09 November 2016 14:34
- Written by Saigoneer.
Due to falling rice prices, Southeast Asia’s top exporters, Thailand and Vietnam, are urging farmers to diversify their crops.
According to The Straits Times, the Thai government has implemented soft loans to encourage farmers to withhold sales. It has also introduced plans to convert 320,000 hectares of rice paddies into corn fields, a crop which is considered more profitable. The country’s Ministry of Agriculture and Cooperatives told the media outlet that the government has offered interest-free loans and guaranteed corn prices for farmers.
Experts agree that higher-value grains and integrated, environmentally friendly agricultural practices are sustainable solutions in Thailand. Last week, the Thai government also pledged an extra THB20 billion (US$571,300) in rice subsidies to farmers as it is concerned that undesirable farming conditions in its north and northeast regions might create more upheaval.
Likewise in Vietnam, the government also has a similar plan to convert 700,000 to 800,000 hectares of rice fields to mixed crops. According to the Foreign Agriculture Service of the United States Department of Agriculture (USDA), the alternative cash crops promoted by the Vietnamese government include corn and soybeans, which until now have been heavily imported. The USDA also asserts that low yields, especially in winter, leave Vietnam’s rice production more vulnerable in comparison to other higher-value crops.
"Rice farming is no longer an economic activity, it's a social safety net for families," the World Bank's lead agriculture economist, Steven Jaffee, told The Straits Times.
However, given the fact that a majority of the rural population is involved in rice cultivation, the government needs to provide support to maintain stability while boosting competitiveness. Although Vietnam can claim the title of the world’s third-largest rice exporter, the country's rice varieties “tend to be of low or middling quality”, observes The Economist. That being said, Vietnamese farmers face direct competition from Thailand, which spends heavily to subsidize premium rice varieties.
Vietnam’s best strategy now is to develop a national rice brand and convert paddy fields to grow cash crops like corn and soybeans – popular animal feeds that directly complement meat production. Because of the rise in meat consumption, increasing production of corn and soybean is economically important.
"Rice brings much lower profitability compared with other agricultural commodities when Vietnamese farmers receive little support from the government…So the plan to reduce the amount of land for rice-planting and...keep the most suitable areas for paddy cultivation is expected to help farmers gain more from less,” rice specialist Pham Thi Kim Dung, from Vietnam's Institute of Policy and Strategy for Agriculture and Rural Development, shared with The Straits Times.
In 2014, Vietnam’s Ministry of Agricultural and Rural Development granted licenses to Syngenta (Switzerland) and Monsanto (USA), the producer of the notorious Agent Orange, to grow genetically modified corn, a controversial crop because of its health, economic and environmental impacts. A year later, local farmers were able to buy GMO corn seeds and gained technological assistance to convert fields to plant them.
[Photo via Flickr user Bread for the World]