New decree facilitates direct rice exports

The rice industry in Vietnam has welcomed a new government decree that cuts much of the red tape involved in exports. Businesses wishing to trade rice no longer need to own storage or milling facilities, nor register export orders at the Vietnam Food Association (VFA) or keep a minimum rice stock equivalent to 50 percent of their registered volume. Vietnam Economic News’ Thao Duong discussed the new directive with Nguyen Ngoc Nam, VFA Chairman.

Rice businesses should improve their product value

How will the new decree (Decree 107/2018/ND-CP) affect rice exporters?

Decree 107 allows rice producers to export their products directly themselves. According to this new decree, farmers, cooperatives and/or enterprises with several dozen hectares of rice cultivation area can each produce and directly export high quality rice products under their brand names to retailers in foreign markets without applying for a license or having a business registration certificate.

Decree 107 will probably increase the number of rice exporters. Will this challenge state management in the field?

Increases in the number of rice exporters would not mean growth in export value, because the government intends to decrease the rice cultivation area but add value to Vietnamese rice products. Therefore, businesses in the field are expected to improve the value of their rice products and by products rather than increase production output.

What will VFA do to address unfair competition, if any?

While it is expected to cause fiercer competition on the rice market, Decree 107 will encourage rice businesses to improve their competitiveness and better serve consumers and customers. The decree has only been in force since early October so time will answer questions about its impact on the market. We will keep eyes on the decree implementation and its effects to solve any potential problems in coordination with relevant ministries and sectors, aiming to ensure the interest of businesses and the prestige of Vietnamese rice. Vietnamese rice exporters should work with each other to create joint capacity, grow on a sustainable basis and contribute to developing Vietnam rice brands in foreign markets.