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Statistics show that in the first seven months of the year, Vietnam imported 2.23mil tonnes of fertiliser worth $1.14bil and $40mil worth of pesticide, while it reaped $1.7bil only from rice exports.
Vietnam has been proud of its fame as the second-biggest rice exporter in the world, but it does not think about the effectiveness of agricultural production. According to Bui Huy Hien, Director of the Pedology and Agro-chemistry Institute, the efficiency of rice production is very low in Vietnam.
Director of the Agriculture Science Institute Nguyen Van Bo also said that the efficiency of agricultural land use is very low in Vietnam, just at 40%. Farmers have been wasting fertiliser in order to improve plants - the efficiency of fertiliser use is just 30-33%. This means that 70% of the fertiliser purchased is lost, vanishes or goes into water sources, causing environment pollution.
Fertiliser market chaotic
The fertiliser market has never been as chaotic as nowadays. There are now some 200 fertiliser production workshops, including 20 big ones, while the others are small with backward technologies.
The fertiliser price has been increasing since the beginning of 2007. According to the Head of the Cultivation Department under the Ministry of Agriculture and Rural Development, the price has increased 2-3 times since 2007 with the urea price up from $440/tonne to $1,200/tonne.
Some 100 fertiliser workshops have been licenced in the last two years alone. The problem is that a lot of the workshops provide low-quality products to the market. NPK fertiliser, for example, is sold by workshops at VND3-4,000/kg, while the production cost alone should be VND14,000/kg.
Experts say that in order to have a real NPK production line, investors need to invest tens of billions of VND, while some workshops have tens of millions only.
The Deputy Director of the Lam Dong Department of Agriculture and Rural Development said that it has discovered a company which provides fertiliser for coffee with the natriclorua content of up to 51%. A lot of coffee plants have withered from dryness after they were manured with the fertiliser. It was 16-16-18-13S product provided by Dong Trung International Joint Stock Company to 240 households in Gia Hiep Commune in Di Linh district at the very low price of VND7.3mil/tonne.
Experts say that the total demand for urea is 2mil tonnes a year, while only 40-45% of this sum can be used effectively. At the price of VND10,000/kg, Vietnam is losing VND10tril a year on ineffective fertiliser use.
How to settle the problems?
Experts have pointed out that the current punishments are not heavy enough to deter violators. Fertiliser workshops don’t mind paying VND8-12mil in fines to continue making low-quality products.
There also exist problems with the fertiliser production management. Local departments of planning and investment grant licences to fertiliser workshops, while the Ministry of Industry and Trade’s Chemical Department manages the production of inorganic products, and MARD manages the production of organic products. Therefore, it remains unclear which ministry and branch is responsible for the chaos in the fertiliser market.
As of April 2008, China has raised the export tax on fertiliser exports by 35-135%, a move that is described as an action to stop fertiliser exports to Vietnam.
According to the Food and Agriculture Organisation (FAO), the fertiliser price will keep rising in the second half of the year, which will put big difficulties on Vietnam’s rice production
Aug 5, 2008
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