Minister Hoang explained why the government halted rice exports in late 2008, saying this was due to the prolonged cold spell in the northern region. To ensure national food security the government asked businesses to temporarily stop signing new export contracts until the harvest time ended. He refuted rumours that the Vietnam Food Association lowered rice prices to buy up farmers’ rice.

The minister shared the view that rice production and purchase are a thorny issue every year and the Party and State have tried to seek solutions to boost production and ensure the protection of farmers’ interests. The Prime Minister assigned the Ministry of Industry and Trade to work with the Ministry of Finance and the Vietnam Food Association to establish an information channel which keeps farmers abreast of up-to-date information about market prices, especially in the country’s rice granaries. The channel will help boost rice production and ensure farmers will make a profit of at least 30 percent.

As a result, the financial sector made rice prices public for the 2009 summer-autumn crop and businesses of the Vietnam Food Association and the Northern and Southern Food Corporations purchased more than 800,000 tonnes, meeting 83 percent of the plan.

However, Minister Hoang admitted that several businesses did not respond well to the government’s decision to buy up farmers’ rice as rice prices for export were rather low. It was difficult to ensure farmer interests when dealers formed the core in purchasing and processing rice. In addition, the average prices between Mekong Delta provinces varied largely. Minister Hoang said that the fixed price of rice at VND3,800/kg was not suitable to all regions and his ministry will work with the relevant ministries to develop a project to stabilise the domestic rice market. The project will be submitted to the PM for consideration, and if it is approved, it will be carried out in 2010.

At the question time, Minister of Finance Vu Van Ninh echoed Minister Hoang, saying to benefit farmers, his ministry has proposed that the government continue to offer subsidised loans to purchase equipment for agricultural production, provide rice varieties, and support State corporations in buying up rice, building rice depots and establishing a fund to stabilise prices.

Minister Hoang pointed to the fact that some electricity projects are slow going due to a lack of investment capital and the impact of the global economic recession, causing power shortages in the northern region. According to the minister, the government offered incentives to experienced businesses such as the Song Da Corporation, the Vietnam Coal and Mining Industries Group and the Vietnam Oil and Gas Group to speed up these projects. He assured that with these projects put in place and energy conservation efforts, power shortages in 2010 will not be as serious as in 2009.

Regarding galloping milk prices in Vietnam, Mr Hoang said that his ministry has assigned the Vietnamese Trade Bureaux abroad, especially in the Asia-Pacific region to examine milk prices in their resident countries and they all found that Vietnamese milk prices were not the highest in the region. 

However, several milk businesses made use of the current Price Ordinance to raise imported milk prices, injuring consumer interests. The government asked the Ministry of Finance to work with relevant ministries and agencies to consider amendments to the Ordinance relating to milk prices. In addition, the Ministry of Industry and Trade increased inspections to fine businesses that cornered the domestic milk market.

Minister of Finance Vu Van Ninh added that his ministry will issue a new document under which milk is included in the list of commodities to benefit from the price stabilisation fund. Businesses will have to make public the price and any law breakers will be fined. The fines will be used to build houses and support the poor.

Minister Hoang also answered the deputies’ queries about the initial results of the ongoing campaign to encourage the Vietnamese to use Vietnamese products. He affirmed that many businesses have so far responded to the campaign by transporting their products to industrial parks, rural and remote areas to serve local people.

To make the campaign successful, he said domestic businesses have to increase product quality and reduce production costs to build up local people’s trust in the local-made products.

“We cannot encourage consumers to use Vietnamese products when our products are lower in quality, poorly packaged and designed, and have uncompetitive prices,” said Mr Hoang.