At the end of March, 2014, the price of Tra fish increased to 25,000 – 26,000 VND/kg, so the small farmers made a profit of 4,000 VND/kg. However, many people do not have captial to farm fish because processing businesses appropriate it and they have difficulties accessing bank loans.
Appropriation by enterprises
About 45 billion VND of 43 Tra fish sellers which Hau River Food Processing JSC (Sohafood) owed from the end of the year to now has not decreased much yet. Cao Huu Sang in Thuan An (Thot Not, Can Tho) said that Sohafood bought 154 tons of Tra fish and the company only paid 20 percent, promising to pay the rest within 45 days. Many months later, Sohafood did not pay any penny. Under the leadership by Tran Ngoc Suong, the company paid another 10 percent, then continued in debt.
On November 23, 2013, Sohafood held a meeting to hand the position of general director from Tran Ngoc Suong to Nguyen Tan Thanh. Thanh stated that from December 2013 to June 2014, the company would completely pay off debts from 3 to 5 billion VND a week. However, Sang said that the company still owes him 2.4 billion VND. They paid him a little before Tet holidays and he was paid 50 million VND after Tet. Now the company still owes him 2 billion VND.
“I have three Tra fish ponds. Sohafood appropriated my capital. The two ponds are left uncultivated and the rest includes about 100 tons of fish. However, I have no money to buy feed for the fish, that’s why the fish cannot grow well,” said Sang. Fish farmed for several months are still small. Now the price is increasing, but they have not been sold. Appropriated by Sohafood, Sang became a debtor to the bank and many others “I was so cursed all day and night by creditors that I can do nothing,” he said.
According to Sang, Tra fish farmers who were appropriated by businesses like him are getting deadlocked. They do not get the money, but also they have to pay for travelling around to get the money. Recently, he and the company argued together every time he came to Sohafood. So his mother did not let him go to get the debt. She did it by herself. However, when she came to the company for several times, general director Nguyen Tan Thanh said such bad things that she was shocked and given first aid in the hospital due to increasing blood pressure.
Many Tra fish farmers do not have capital to farm fish because they have difficulties accessing bank loans – Photo: Nguyen Chi
Difficulties in borrowing money from banks
Director of Thoi An Cooperative Group specializing in Tra fish Nguyen Ngoc Hai said that the bank only gives a loan of 1 billion a hectare of Tra fish area, “and borrowers must be reputable and have ability to pay the previous debt.” According to Hai’s calculation, with the price of 22,000 VND/kg, only 50 tons of fish was fed with 1 billion. Meanwhile, farmers in O Mon district are able to feed fish with productivity of 400 – 5,000 tons/ha. Thus, bank loans meet only about 10 percent of needs of farmers.
Banks do not lend more because of mortgage properties which have not increased in the recent years. Many farmers did not gain interest because of the losses and the businesses’ appropriation. “We just raise fish with the capital we have. With bank loans only, the productivity will be low. Although the price of Tra fish increases, farmers benefit from it not so much,” said Hai.
According to him, the Tra output is from 50,000 to 60,000 tons yearly in O Mon. However, at present there are only six small farming households and the output is about 20,000 tons. Most of the farmers are associated with processing enterprises. The interest is stable under the contract. Meanwhile, the fish farmed by small farmers are not large enough. It takes a short time to sell it. So the actual profit is unknown. “It has been lost in the past years. Only when the price rises, fish farming can hope to recover,” concluded Hai.
Hope for a new policy
At the meeting chaired by the Prime Minister in Can Tho city on March 15, 2014, the State Bank of Vietnam announced “the policy to support fish farmers who have difficulties.” Therefore, “Tra fish farmers having difficulties are considered to restructure debts and to be given new loans to recover production”. Some problems are considered such as natural disasters, diseases and market fluctuation.
According to bank, debts will continued to be restructured for farmers who are having troubles (36 months), remission of interest rates for customers considered. For farmers who are no longer able to repay the debt because of objective reasons and force majeure (such as natural disasters, epidemics, crop failures, the negative impact of the market…), credit institutions consider the maximum debt limit of three years, and at the same time continue to consider new loans without seltled debts.
Besides, the State Bank of Vietnam and the Ministry of Agriculture and Rural Development implemented a pilot program to provide loans for the affiliate models, apply high technology and promote exports of agricultural products. Businesses, cooperatives and farmers implementing the affiliate can join the program. The banks give maximum loans of 80 percent of the project value, loan projects, free mortgage properties, and the interest rate of 7 percent. Initially, the bank and the ministry choose 15 pilot units within a year. After that, everything and expanded to other units.
Hai was excited at the new policies, hoping that they would reach the Tra fish farmers soon. He said: “In the past, the Government separately promised to give favours to Tra fish farmers, but it did not work”.
>> Credit for Tra fish: In 2013, loans increased by over 2 percent. On January 31, 2014, it reached over 18,4 trillion VND, up 0,4 percent compared to December 31, 2013. With loan rescheduled for Tra fish and shrimp. On January 31, 2014 total extended loans (loans from August 15, 2012 to earlier) at five state-run trade banks was nearly 5 trillion VND.
Source: State Bank of Vietnam