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PROJECT “NETWORK FOR AGRICULTURE AND RURAL DEVELOPMENT
THINK-TAKS FOR COUNTRIES IN MEKONG-SUB REGION” (NARDT)

Encourage enterprises to buy for the temporary storage of paddy rice to stable
rice price at the peak time: Every year, during the harvesting period, market meets
with difficulties, price of paddy rice usually goes down, the State implements policy
on supporting temporary stocking enterprises. The State directs the State Bank to
provide loans with preferential rates for enterprises to purchase and temporary stock
paddy rice (the State Bank of Viet Nam will compensate for interest rate differences).
The policy supports the fall of price on paddy rice, ensuring farmers earn at least
30% on profits. However, in reality, the beneficiary of this policy are enterprises and
banks rather than producers because most producers sold their crops (fresh) straight
after harvesting, to collectors and traders instead of enterprises, while the actors got
supported on price. Enterprises only initiate buying after signing the export contract.

- Managing rice import-export operation

Managing and coordinating rice import-export enterprises: To manage import-
export of rice activity, The State has implemented Decree no. 109/2010/ND-CP on
04/11/2010; no.107/2018/ND-CP on 15/08/2018 on rice export business. Accordingly,
enterprises that are eligible for exporting rice, including i) At least 01 storage for
paddy rice, rice storage that submitted to the National standards and technical
regulations; ii) At least 01 milling facility or processing facility that submitted to the
National standards and technical regulations. In which, storage, milling, and processing
facilities can be owned by the enterprise, or rented with a minimum of 5 years in
the contract. Enterprises that exclusively export organic rice, parboiled rice, and
micronutrient enhanced rice will not require to meet these export requirements. This
decision aims to improve the rice export management and reduced the rice export
hubs. Ministry of Industry and Trade conducts examinations and grants certificates for
eligible enterprises for exporting rice. Prior to July 2020, Viet Nam has 192 enterprises
eligible for exporting rice. Following this decision, enterprises that failed to export
rice within 18 months will be revoked.

Institutions for governing rice exporting businesses: Currently, with current
regulations, the Ministry of Industry and Trade and the Viet Nam Food Association
(VFA) play an important role in managing rice exports. The Ministry of Industry and
Trade, together with VFA and provinces official, directs and guides businesses to i) build
material zones, ii) purchasing rice for stocks, ensure market stability, iii) negotiate and
sign export contracts, iv) guiding and supporting enterprises on market information,
v) managing and checking violations in import-export enterprises. The Ministry of
Industry and Trade is responsible for finding markets, negotiating, and signing rice
trade agreements with countries, and has the right to designate focal enterprises
to negotiate centralized contracts (G2G). In which, the VFA has the right to allocate
80% of the productions from concentrated contracts to exporting enterprises. In
addition, rice exporting enterprises must report on contract performance progress
to the Ministry of Industry and Trade and VFA30. In addition, the Ministry of
Agriculture and Rural Development (directing production, building material zones),
the Ministry of Finance (stabilizing prices, making rice export reports), the Ministry of
Health (promulgating regulations on residues, national standards on micronutrients,
packaging), the State Bank of Viet Nam (balancing capital for rice trading) and the
Provincial People’s Committee (organizing production, monitoring the trade situation
within the province) is also involved in governing the rice exporting business.

30 Decree no.107/2018/ND-CP on rice exporting business.

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