There is an essential need to improve the quality of Vietnamese rice products. However, the rice industry should strive to satisfy market demand instead of just focusing on what it wants to do.
The Ministry of Agriculture and Rural Development has sought feedback from the Mekong Delta authorities on a sustainable development project to zone one million hectares for high-quality rice cultivation in this region.
It is considered an important project to help improve the rice quality and value in the Mekong Delta region and Vietnam. The Mekong Delta people have used most of their land to grow high-quality, fragrant and specialty rice. As a result, the areas for medium- and low-grade rice farming are still relatively small.
Low- and medium-grade rice areas below 10%
The Mekong Delta region boasted a total rice cultivation area of nearly 3.89 million hectares in 2021, amounting to 54% of the country’s total figure (7.24 million hectares). Among those, some 1.52 million hectares of cultivation land were for the winter-spring rice crop, while 1.53 million hectares were for the summer-autumn crop. The autumn-winter crop accounted for around 700,000 hectares, and the rest was for seasonal rice crops.
The rice production area in the Mekong Delta region has remained almost the same for a long time. However, the regional rice industry saw a huge change in product quality in the past two years, shifting from low- and medium-grade rice to high-quality, fragrant and specialty rice segments.
The cultivation area for low- and medium-grade rice (IR50404) accounted for about 35-45% of the total rice cultivation area in the country five years ago. However, the figure dropped below 10% recently.
A report from the Department of Crop Production under the Ministry of Agriculture and Rural Development shows that some 1.49 million hectares of land were used for growing rice in the summer-autumn crop last year. Of these, 69% of the area was for high-quality rice varieties, while 15% was for fragrant rice varieties. Some 8% of the land area was used for cultivating sticky rice and the other 8% was for low- and medium-grade rice varieties.
High-quality and fragrant rice dominated the summer-autumn crop with 84% of the rice cultivation area in the Mekong Delta region last year. The figure indicated that the Vietnamese rice quality has remarkably improved in recent years.
Nevertheless, this change forced Vietnam to import a fairly large amount of low-grade rice to serve domestic demand for producing vermicelli, cakes, animal feed, wine and beer or for exporting to other countries to fulfil the contracts signed with foreign partners.
According to Dang Thi Lien, director of Long An Foodstuff Company Limited, Vietnam imported over 900,000 tons of rice from India in the first nine months of last year. “We even bought Thai rice for re-export,” she said.
A report from the General Directorate of Agriculture under Cambodia’s Ministry of Agriculture, Forestry and Fisheries stated that the country exported over 1.73 million tons of rice to Vietnam in the first half of 2022, up 2.38% year-on-year, gaining a total value of over US$336.2 million, up 20.38%.
Meanwhile, Nguyen Van Thanh, chairman and general director of Phuoc Thanh IV Trading Production Company Limited, estimated that Cambodia exported about 2-2.5 million tons of rice to Vietnam last year. “A large amount of rice was exported to Vietnam through informal trade, so it is hard to determine the exact number,” he said.
Path ahead for high-quality rice cultivation zoning project
Le Thanh Tung, deputy director of the Department of Crop Production, said at the discussion between the Ministry of Agriculture and Rural Development and Can Tho University that the number of one million hectares was just an estimate. The land area for the project could be up to 1.2 million hectares or the entire rice cultivation area in the Mekong Delta region.
Rice varieties are commonly classified into high-quality rice, medium-quality rice, or low-grade rice, rice for processing vermicelli, cakes, animal feed and beer, and a group of specialty rice and fragrant rice. “However, in this project, high-quality rice is defined as the entire rice cultivation chain, including rice varieties, mechanization and technology application in farming. It aims to reduce production costs and greenhouse gas emissions, as well as increase people’s incomes,” he emphasized.
The general outline of the project, “Zoning one million hectares for high-quality rice cultivation and green development”, also emphasized that local authorities should prioritize the cultivation of fragrant rice and high-quality rice varieties, which are commonly used in the domestic market and qualified enough for exporting to other countries. Regarding market orientation, the structure of Vietnam’s rice exports is determined as follows: 50% for fragrant, specialty and Japonica rice; 30% for high-quality rice; 10% for sticky rice; and 10% for rice used in processing other products.
It is necessary to focus on rice quality and food safety improvement. However, should we identify the rice export structure or let it be determined by market demand?
Although economist Tran Huu Hiep agrees with the project’s approach, he believes that local authorities should also pay attention to other segments to satisfy the market demand. “Zoning one million hectares of the land area for high-quality rice cultivation does not mean that we skip investment in other rice varieties,” he said. The Vietnamese market is still short of low-grade rice, so domestic enterprises have been forced to import about one million tons of Indian rice.
Speaking about rice imports from India, the chairman of Phuoc Thanh IV Trading Production Co., Nguyen Van Thanh, worries that the overfocus on high-quality rice cultivation can result in a supply-demand imbalance as low- and medium-grade rice is still indispensable in the Vietnamese market. “In fact, the IR 50404 rice used to be sold at a higher price than OM, a high-quality rice type,” he said. Therefore, the implementation of the project should be closely based on the market demand.
The structure of Vietnam’s export rice has seen a major change recently, shifting from low- and medium-grade rice to the high-quality and fragrant rice segment. However, the demand for medium-grade rice has remained high. Therefore, it is necessary to carefully consider the production orientation of the project to ensure a balance between supply and demand.