Hanoi (VNS/VNA) - Following recentcriticism of the Vietnam Food Association (VFA), the Ministry of Agricultureand Rural Development (MARD) has reduced the association’s power, with furtherplans to promote fairness in rice exports.

Deputy Minister of Agriculture and RuralDevelopment Ha Cong Tuan affirmed that the VFA should no longer be able toallocate rice quotas among domestic firms and Decree 109 regulating thecountry’s rice exports must be amended to facilitate the change.

So far, the decree dictates that the VFA can onlyallocate rice export quotas under centralised contracts on the basis ofagreements between Vietnam and importing countries.

But since 2017, the association has chosen tofocus more on auctioning off these quotas as a separate enterprise seeking itsown profits instead of as a representative of rice producers.

As a matter of fact, Vietnam is now onlyunder one specialised contract to export rice to Cuba, but only one enterprisewas assigned by the government to implement this.

"Therefore, in essence, the VFA has no rolein allocating quotas at the moment," said Tuan.

Regarding the proposal to halt the VFA’s allegedabuse of power in allocating rice export quotas, Tran Van Cong, deputy directorof the Agro Processing and Market Development Authority, said that althoughthere are some inadequacies, it is not possible to completely diminish the roleof the VFA in keeping rice production stable.

In recent years, the VFA has done a good job ofregulating import and export of foodstuffs, including rice, he added.

Cong said that the MARD will work closely with theMinistry of Industry and Trade to review Decree 109, in order to promote andencourage more private businesses to participate in rice exports, which hehoped would lessen the VFA’s influence in this field.

Prior to that, the Vietnam Institute for Economicand Policy Research (VEPR) claimed in a March 2018 report that the VFA onlyrepresents the interests of State-owned enterprises (SOEs) in the agriculturalfield and does not hold itself responsible for the private sector’s orindividual farmer’s benefits.

[Infographics: Vietnam likel😼y to export 6.5 million tonnes of rice in 2018]

The VEPR said that the association was hamperingthe development of its members via the use of monopolisticgovernment-to-government contracts.

Nguyen Duc Thanh, VEPR’s director, argued thatVFA’s allocation decisions are based on a top-down, non-consensual andinvoluntary approach that doesn’t include consultation with member firms, whileits price floor policy has caused losses for private exporting enterprises andindirectly pushed down the price level at which rice is purchased straight fromsmall-time farmers.

Therefore, VEPR’s representatives suggested thatthe Government actively replace the outdated VFA policies with radical reformin the rice export sector, setting up a new institutional policy-based systemthat is disciplined, fair and transparent.

In particular, the revised Decree 109 that theMinistry of Industry and Trade is drafting should reduce the VFA’s role to thatof a trade association, instead of a quota cartel.

Experts from the VEPR said that in order for therice industry to develop sustainably in the long run, there should beproduction contracts between rice farmers and enterprises.

In early March, the VFA said that in addition toits current functions and rights, in the near future, the association willfocus on increasing the number of members to fight against price pressure andanti-dumping, as well as restrain unfair competition affecting production,efficiency and prestige of the Vietnamese rice industry.

DeputyMinister of Agriculture and Rural Development Tran Thanh Nam requested theVFA to organise production and cooperative development, especially in areas ofspecialised rice cultivation, and initiative export quantity to specificmarkets, while maintaining quality assurance and food safety.-VNS/VNA