Commenting on the new rules, Dau Anh Tuan, head of the Legal Department at the Vietnam Chamber of Commerce and Industry, remarked that the latest decree has relaxed some stringent regulations, enabling rice exporters to operate more easily.
The new decree allows rice exporters to hire at least one warehouse and one milling facility in accordance with national standards and reduces the volume of stored rice, creating more favorable conditions for medium and small-sized enterprises (SMEs) as they need not invest a large sum of money in building processing facilities to set up their businesses.
The rental contracts must be signed for a minimum of five years and must have legal documents in line with prevailing regulations. Traders receiving rice export certificates must not sublease their facilities and warehouses to other traders.
The new decree also stipulates that the General Department of Vietnam Customs will take over from the Vietnam Food and Foodstuff Association the responsibility of sending periodically updated reports to the Ministry of Industry and Trade on the quantity, value and types of rice sold as well as the target markets for rice exports.
However, Decree No.107 does not bring about significant changes to the methods of managing rice processors and traders, Tuan noted. For instance, rice traders will still need to seek approvals, prepare multiple reports and meet many other requirements to start their businesses.
The decree is partially beneficial to SMEs and firms exporting organic rice, parboiled rice or nutritionally enhanced rice as they need not follow the new rules and do not require rice export certificates.
According to Vo Hung Dung, an agricultural expert, the new decree relaxes many rules but is incomplete in its scope. He pointed out that it took eight years to issue Decree No.109, which was unsatisfactory to several rice exporters and associations for years, as they called for amendments to it. While the decree was in effect, many rice traders missed the opportunity to export rice as they had failed to meet the requirements of the old decree.
Data from the Central Institute for Economic Management issued last year revealed that after Decree No.109 took effect, the number of rice exporters plummeted from more than 200 units to 145 firms, while the actual number could be lower.