November 5, 2013
Vietnam is considering the possibility of implementing catfish (pangasius) farming quotas as farmers and exporters risk financial damage due to overproduction and a mismatched demand.
A recent survey by the Can Tho University showed that 9.4% of aquaculture households took losses in 1993, while 25% did so in 2002-2005. The figure rose rapidly to 30% in 2005-2009 and 50% in 2010-2012.
VASEP believes that if the catfish farming can be well programmed, the oversupply would not occur. Meanwhile, export prices would be stable as companies need not have to compete with each other by lowering selling prices.
According to VASEP, the catfish output has been increasing steadily in recent years. Farmers rush to farm catfish even though they are not familiar with the market demand.
As a result, the material supply has always been higher than the demand. A quota mechanism may ensure careful production with little wastage.
Under the mechanism, VASEP, the Ministry of Agriculture and Rural Development (MARD), and the Vietnam Catfish Association (VN Pangasius)-- people's committee of the Mekong River Delta provinces, would get together yearly to decide the total catfish output for the year.
The decision would be made after considering exports and domestic consumption.
For example, a farmer in the An Giang province, who breeds catfish on five hectares of ponds in 2013, may not be allowed to continue farming in 2014, because the quota, granted to the province in 2014, has decreased by 20%.
The 20% cut in quotas may be allocated to Dong Thap province. Under such circumstance, the farmers in Dong Thap will be encouraged to increase production to increase the provincial catfish output.
VN Pangasius has refused to make an official comment on the idea. Nguyen Viet Thang, Chair of the association, said that the idea needs to be approved by the government.
Thang has also anticipated that the quota mechanism would lead to the "ask-and-grant" scheme, meaning that local provinces and farmers would have to lobby for the farming quotas.