November 6, 2007

Vietnam's farmers lament low profits despite soaring prices

Despite soaring prices for most agricultural products this year, Vietnam's farmers are arguing that higher production costs are driving profit margins ever slimmer.

Rising inflation was seen to affect profits in the industry. The consumer price index (CPI) in October rose by 0.74 percent from the September level, bringing the index to 8.12 percent from December last year.

The price of rice has reached unprecedented levels while meat prices rose at least 20 percent.

Pork prices soared by 37-38 percent, chicken by 20-25 percent, beef by 20-25 percent from a year earlier, according to Deputy Head of the Animal Husbandry Department under the Ministry of Agriculture and Rural Development Nguyen Thanh Son.

With that price level, pig breeders can make a profit of between VND400,000-VND500,000/pig (US$24.88-US$31.1) four to five times compared to the previous level of VND100,000-200,000/ (US$6.22- US$12.44) per head.

Although farmers have benefited from the soaring prices, production costs such as fertilizer, seeds and agricultural materials have also increased sharply, negating the gains made from higher prices.