Alliance Foods, Inc.

More and more farmers have left fish ponds idle, because the more they invest in the farming, the bigger loss they suffer. Meanwhile, a series of catfish export companies are in the danger of going bankrupt because the more they export, the bigger losses they incur. A recent survey by the Can Tho University showed that 9.4 percent of aquaculture households took loss in 1993, while 25 percent took loss in 2002-2005. The figure rose rapidly to 30 percent in 2005-2009 and 50 percent in 2010-2012.

 

VASEP believes that if the catfish farming can be well programmed, the oversupply would not incur, while the export prices would be stable because export companies would not have to compete with each other by lowering the selling prices. According to VASEP, the catfish output has been increasing steadily year after year in recent years. Farmers rush to farm catfish even though they lack the information about the market demand. As a result, the material supply has always been higher than the demand. Therefore, it would be better to control the production by the quota mechanism to be sure that all materials can be consumed.

 

Under the mechanism, VASEP, the Ministry of Agriculture and Rural Development (MARD), and the Vietnam Catfish Association (VN Pangasius)-- people’s committee of the Mekong River Delta provinces, would sit together every year to decide the total catfish output of the year. The decision would be made after considering the exports and domestic consumption. After that, the farming quotas would be allocated to provinces and cities. This could be understood that the catfish farming scale in localities may change every year.

It may happen that a farmer in An Giang province, who breeds catfish on five hectares of ponds in 2013, may not be allowed to continue the farming in 2014, because the quota to be granted to An Giang province in 2014 decreases by 20 percent. The 20 percent cut in quotas may be allocated to Dong Thap province. If so, the farmers who is farming in Dong Thap would be encouraged to resume the cultivation to increase the provincial catfish output.

 

VN Pangasius has refused to make an official comment about the idea. Nguyen Viet Thang, Chair of the association, said the idea needs to be approved by the government to turn into reality.

 

Also according to Thang, VASEP many times suggested solutions to help the catfish industry develop in a sustainable way. VASEP once suggested setting up the floor price for catfish exports. However the suggestion has fallen into oblivion.

It seems that the new suggestion has not been advocated by VN Pangasius. “I cannot understand why VASEP makes such a suggestion relating to the farmers, while it should be the task of VN Pangasius.

 

Thang has anticipated that the quota mechanism would lead to the “ask-and-grant” scheme, which means that local provinces and farmers would lobby for the farming quotas.

 

Thang believes that the best solution for the catfish industry is following the supply & demand economic law. If farmers can make profit with farming, they would continue their jobs. If not, they would leave the ponds idle.