Businesses claim delayed payments to farmers for rice are due to cash flow problems?

Regarding the information reported in Dan Viet Newspaper about traders buying rice from Loc Nhan Foodstuff Joint Stock Company (Loc Nhan Company) - a member of Loc Troi Group - but not paying immediately, repeatedly postponing payment, causing anxiety among many people in Co Do District, Can Tho City, Loc Troi Group's media team has officially responded.

Mr. Phan Van Quan, residing in Hamlet 2, Thanh Phu Commune, Co Do District, Can Tho City, spoke with a reporter on March 5th. Photo: Huynh Xay

According to a media representative from Loc Troi Group, the reason for the delay in paying farmers for their rice is due to some disruptions in bank cash flow over the past few weeks, which has slowed down the arrangement of cash payments to farmers.

During this time, Loc Troi Group is working with banks to arrange the necessary cash to be transferred to farmers as soon as possible.

"From Loc Troi Group's perspective, we find it very difficult to make cash payments in large amounts when the rice harvest is in full swing," Loc Troi Group's media team emphasized.

According to Loc Troi Group's media, the Group and Loc Nhan Company are seeking urgent and long-term solutions to prevent further delays in rice payment.

One proposed solution is to persuade people to open bank accounts so they can transfer money directly instead of having to withdraw cash and make cash payments as they do now.

When a reporter from Dan Viet newspaper asked why Loc Nhan Company did not sign contracts to buy rice directly from farmers, but instead went through traders, leading to loose transactions and a loss of trust from the people, Loc Troi Group's media team stated that Loc Nhan Company cooperates with traders to buy rice because farmers still have the habit of selling rice to traders, who then sell the rice to companies.

Rice sales contract for the 2024 winter-spring crop between Mr. Nguyen Van Cop and a trader. Photo: Huynh Xay

As Dan Viet newspaper reported, on March 4th, many people went to the headquarters of Loc Nhan Company in Thanh Phu commune, Co Do district, Can Tho city to demand payment for the 2024 winter-spring rice crop that had been sold previously.

Here, the residents met with company representatives and were promised payment as soon as possible. Despite this promise, the residents remained very uneasy.

Regarding the reasons why many people came to the Loc Nhan Company headquarters to demand payment for their winter-spring rice crop, in discussions with reporters, most people said that the company bought rice from them through traders but did not pay immediately, repeatedly postponing the payment.

Mr. Phan Van Quan, residing in Hamlet 2, Thanh Phu Commune, said that his family sold over 90 tons of rice to local traders (these traders buy rice for the aforementioned food company - PV) at a price of 8,600 VND/kg.

Because the traders did not pay immediately as agreed, he refused to let the boat carrying the rice leave. Seeing this, the traders paid approximately 200 million VND in advance (the total amount the traders owed Mr. Quan was about 800 million VND).

Regarding the remaining amount, the traders promised to pay in three days, but then kept making promises and never actually paid. "They kept promising, they promised last Friday (March 1st) but they wouldn't pay, so I and many other people went to the company to demand it. At that time, the company representative promised to pay this coming Friday (March 8th), but I don't know if they'll be able to," Mr. Quan told the reporter on the afternoon of March 7th.

Mr. Quân said that as of today (March 7th), 10 days have passed since he sold his rice to traders, but he has not received the money. This situation worries him because he rents most of his rice fields and desperately needs the money to invest in the new rice crop.

Mr. Nguyen Van Cop, residing in Trung Hung commune, Co Do district, Can Tho city, informed reporters on March 5th that he had sold over 5 hectares of winter-spring rice to the aforementioned company through traders and had not yet received payment.

"I harvested my winter-spring rice crop in two batches, the first on the 13th of the lunar month and the second on the 15th, but I still haven't received the money. So far, the traders have promised to pay three times," Mr. Cop informed.

Besides owing money for the rice, Mr. Cop said that traders had asked him to lower the price of rice from 8,500 VND/kg to 8,300 VND/kg. Furthermore, the combine harvester arrived at the field 3 days later than agreed and the weighing was delayed by 4 days.

Mr. Cop noted that leaving the rice in the fields beyond the harvest date and the delayed weighing resulted in significant losses in rice yield.

It's not just these two households; many other farmers in Co Do district, Can Tho city, have also reported that traders buying rice for businesses are demanding lower prices, and that harvesting and weighing the rice are delayed compared to the initial agreement.

Source: https://danviet.vn/cham-tra-tien-lua-cho-nong-dan-doanh-nghiep-noi-loi-do-truc-trac-thu-xep-tien-mat-20240308130335987.htm