Financial crisis hits Vietnam farmers

Oct 13, 2008, 11:13 GMT

   Hanoi - The global financial crisis is beginning to hurt Vietnamese farmers and agricultural exporters, officials said Monday.

   'The US financial crisis is hitting Vietnam,' said Minister of Trade and Industry Nguyen Thanh Bien. 'Our exporters will face difficulties in the near future.'

   Local media reported Monday that prices for pre-processed rubber sap, pepper, rice and tea all showed downward trends.

   'Our coffee exporters and farmers have been seriously affected by the US financial crisis,' said Doan Trieu Nhan, chairman of the Vietnam Coffee and Cocoa Association. 'The export price of coffee has fallen from 2,000 dollars to 1,600 dollars per ton.'

   Nhan said many coffee exporters signed contracts to buy coffee from growers at 1,455 dollars per ton in the early months of this year, but must now sell at 1,212 dollars per ton.

   'Some coffee exporters will find it hard to survive if prices continue to fall,' Nhan said.

   Nhan said Vietnam's 2 million coffee growers had also been hurt by the dollar's recent fall against the Vietnamese dong. The dong has risen from 16,600 won against the dollar to 16,300 won in recent weeks.

   'Our farmers use Vietnamese money to grow their coffee, but exporters can only pay them in dollars,' said Nhan.

   'The export price of Vietnamese rubber has fallen 40 per cent compared with the early months of this year,' said Nguyen Minh Khang, a senior official at Vietnam Rubber Corporation.

   Financial difficulties in the US and Europe threaten to do serious harm to Vietnam's export-oriented economy. Sixty per cent of the country's gross domestic product comes from exports.

   Vietnamese farmers say their incomes are being hit hard.

   'This is the most difficult time for us in the past 10 years,' said Nguyen Van Bao, a pepper grower in the Central Highlands province of Gia Lai. 'We cannot make enough money to support ourselves. The more we invest, the more we lose.'

   Bao said it cost him more money to grow his pepper crop this year than he earned selling it. 'If things do not improve, my family will starve,' he said.

   Nguyen Thi Chieu, a farmer in the southern province of Dong Nai, said she had no money to take care of her family.

   'I only have rice, but the price has fallen sharply,' said Chieu. 'It is not easy for us to sell. I don't know how my life will be in the next months.'

   Vietnam's Ministry of Industry and Trade projected the country would earn 15.7 billion dollars from exports in the fourth quarter of this year. That represents a drop from the recent monthly average of 6 billion dollars in export earnings.

   The drop includes exports sectors such as rice, pepper, footwear, garments and textiles.