The quality and brand of rice will determine the value

For many years, Vietnam has regularly ranked top in the world in terms of rice export output, but many believe that the export value is not commensurate. What do you think?

Every industry or product has a stage of development. After innovation, in 1989 Vietnam started to export rice. At that time, Vietnam only exported 500,000 tonnes, then increased very quickly and the world said it was a miracle of Vietnamese rice. Many breakthrough policies have helped the rice industry have the success it has today.

Over time, Vietnamese rice has played a very important role in the story of food security, ensuring income for farmers and contributing to export growth in general. Vietnam contributes to ensuring food security in the region and the world, helping increase Vietnam's position in the international arena.

Vietnam often ranks in the top three in the world in terms of rice exports, but it must be admitted in terms of value, there are also many problems. Recently, Vietnam has tried to improve the quality of rice, especially taking advantage of opportunities from free trade agreements (FTAs) to expand the production of high quality products according to market standards. The export price has also gradually risen. For example, with white rice in the past, the price of Vietnamese rice was US$10-20 per tonne as cheap as Thai rice, but recently the price of rice has been on par. Thailand exports a lot of high-quality, branded rice. That is what Vietnam must learn and gradually improve the quality of products to sell to the market at higher prices.

Vietnam's rice exports have made great moves, but farmers' incomes have not improved much. This is one of the factors that make it difficult to sustainably produce and export rice. What is the main cause of this?

Firstly, it must be said currently the scale and yield of Vietnam's rice is too low. According to 2019 prices, if a rice farmer household has an area of ​​about 1.5 hectares of rice cultivation; income would meet the minimum demand. If they want to exceed that, they must have at least 2 hectares of rice.

It is still possible to reduce production costs to improve the efficiency of rice cultivation. Some rice growing models in Dong Thap, An Giang apply well to reduce fertiliser but rice yield does not decrease much. Fertiliser costs are reduced by up to 50%. Some models that do well in seed production have reduced seed costs quite a lot compared to 2-3 years ago. There are also some models of collective economic development and cooperatives or models of farmers removing boundaries between fields to promote mechanisation, which also help lower production costs.

Besides being able to help farmers maintain the selling price of rice, I think better communication and training can help farmers cut costs.

Some say farmers spend large production costs but receive small values while traders and businesses pay lower costs and gain greater value, which has been a disadvantage in the rice value chain. What do you think about this?

Research shows that, in the total cost for one bag of rice for export, the production cost is very large. Farmers spend most of the costs, but the profits they get are not commensurate with costs. We found all factors in the rice value chain are at risk, but farmers are the ones who bear the most risks, especially the risks of weather and climate change.

When there is a better share of value, sustainability throughout the chain is better. However, it must be said that when the cooperative has not really developed, traders and businesss play a very important role in the rice value chain. Whether it is fair or unfair in the distribution of profits depends on the conditions of each moment. In short, it can be said the value of increase in the entire value chain of the rice industry is still low. If the cost of rice production still accounts for about 70% of the cost of the whole chain, the investment of each stage to improve the final value will not be high.

To increase added value and ensure more sustainable export in the future, what are the important factors that the whole rice industry must focus on in the future?

I think that in the past, the Vietnamese rice industry tried to maximise the area and productivity, so it did not focus much on improving the value and brand. Now, to grow exports and sell at a higher price, you must focus on branding issues. When export products are branded, fully packaged and labelled, the value is certainly much higher. With such obvious potential, the important thing is how to develop the brand. In the future, if there are good policies on production organisation and promoting linkages, it will help businesses in building brands.