July 20, 2006

Slim profits push Vietnamese dairy farmers into the red

Farmers raising dairy cattle in Ho Chi Minh City, which houses Vietnam's biggest herd of 55,000 cattle, are facing losses as factories buy milk at low prices.

The news comes at a time when the government is planning to reduce its controlling stake in Vinamilk, Vietnam's largest dairy. The company controls 40 percent of the country's fast-growing milk market.

Farmers say a litre of milk only earns profits of between VND200 (US$0.012) and VND300 ($0.018). These razor thin profits are not enough to cover feed and stable expenses, they said.

According to Nguyen Dang Vang, director of the Ministry of Agriculture and Rural Development's Animal Husbandry Department, the low purchase price is the single main cause of difficulty and loss for farmers.