Concerns from the fields

Rice price increased by one, fertilizer price increased by two

These days, farmers in Khanh Binh Tay commune, Tran Van Thoi district, Ca Mau province are focusing on producing the 2024-2025 Winter-Spring rice crop. This is the most important rice crop of the year, because in addition to favorable weather, rice yields and higher rice prices compared to the summer-autumn crop. In the production plan for the 2024-2025 Winter-Spring rice crop, the whole Ca Mau province will plant 35,224 hectares, of which Tran Van Thoi district has the largest area of ​​28,944 hectares, followed by U Minh district with 3,270 hectares, Thoi Binh district with 530 hectares, and Ca Mau city with 2,480 hectares.

Mr. Pham Truong Giang - Director of Long Giang Agricultural Service Cooperative is spreading fertilizer to prepare for the new crop season. (Photo: Nguyen Chuong)

Long Giang Agricultural Service Cooperative (Da Bac A Hamlet, Khanh Binh Tay Commune, Tran Van Thoi District, Ca Mau Province) currently has more than 30 hectares, including the cooperative's area and the area associated with households.

In the winter-spring crop, Long Giang Agricultural Service Cooperative will plant ST rice, but in the summer-autumn crop, the rice variety used is OM 18 to limit lodging. For each hectare, farmers can harvest from 5.5 tons to 6 tons of rice. With a revenue of about 17 million VND per hectare, the profit is about 30-35%, the rest is production costs, of which fertilizer costs account for 40%. Mr. Pham Truong Giang - Director of Long Giang Agricultural Service Cooperative - said that with the high price of fertilizer, if not done properly, farmers in the cooperative will not be able to earn the above profit.

“In recent years, fertilizer prices have been on an upward trend. 10 years ago, the price of urea fertilizer was about 280,000 - 300,000 VND/bag, now it is about 600,000 VND/bag; with NPK fertilizer, it used to be about 580,000 - 600,000 VND/bag, now it has increased to 900,000 VND/bag to 1 million VND/bag. The selling price of rice 4 - 5 years ago was about 5 - 6 thousand VND/kg, now it has increased to 7.5 thousand VND/kg. Farmers produce rice but the price of rice has not increased as fast as the price of fertilizer,” Mr. Pham Truong Giang informed.

For the past 2 years, rice prices have always been high. However, the increase in rice prices has led to an increase in agricultural inputs. Therefore, farmers' profits remain the same. According to rice growers in Tran Van Thoi district, when rice prices increase by 1, the price of agricultural inputs increases by 2, 3; 1 bag of fertilizer increases by 100,000 VND while 1 kg of rice only increases by 1,000 VND. The gap between the increase in rice prices and the increase in agricultural inputs is quite large. This makes the profits of farmers "thinner".

Mr. Pham Truong Giang - Director of Long Giang Agricultural Service Cooperative said that the price of rice increased by 1, the price of agricultural inputs increased by 2, increased by 3, making the profit of farmers "thinner". (Photo: Nguyen Chuong)

Not only the price of agricultural materials has increased. Rice growers in Tran Van Thoi district also face the problem of output when the selling price is unstable, consumption among members and farmers is difficult due to dependence on traders.

In Can Tho , the story of agricultural input material costs is also an issue of particular concern to farmers. Truong Khuong A Fruit Garden Cooperative (Truong Khuong A Hamlet, Truong Long Commune, Phong Dien District, Can Tho City) specializes in growing star apples and durians.

Mr. Tran Van Chien - Director of Truong Khuong A Fruit Cooperative - shared that in 2024, the estimated harvest output of star apple is 240 tons, of which about 100 tons will be exported and the rest will be sold to outside traders. With durian, the estimated harvest output in 2024 is about 350 tons, with the orientation to export but the season has not come yet. A few years ago, durian yielded 300 tons, mainly sold domestically, with traders purchasing 80 tons.

Talking about production in recent years, Mr. Tran Van Chien said that people are aiming to limit the use of fertilizers and pesticides to reduce product costs. “A few years ago, we sold durian for around 30-40 thousand VND/kg, last year it was 60-70 thousand VND/kg. Currently, the price of Ri6 durian is around 140 thousand VND/kg, monthong durian is 160 thousand VND/kg, Ri6 durian is 130-140 thousand VND/kg. The price fluctuates strongly, durian growers are also quite worried, because many people follow the price and will increase fertilizer and care for durian trees, which will increase the cost. The market is not stable, if the price of durian drops suddenly, it will affect profits,” said Mr. Tran Van Chien.

Talking about agricultural input materials, specifically fertilizer, Mr. Tran Van Chien said that the Cooperative signed an input contract with Thang Loi Company, in which 60% of imported fertilizer and 40% of domestic fertilizer will be used.

The price of imported fertilizer is higher than the price of domestic fertilizer, currently 4-5 thousand VND/kg difference, however, farmers like Mr. Tran Van Chien also find it difficult to evaluate which type is of better quality.

“The cooperative has a total area of ​​45 hectares, 1 hectare/1 crop we use about 4 tons of organic fertilizer and 500-600 kg of inorganic fertilizer. Domestic fertilizer is used by farmers in the recovery and soil loosening stage. Imported fertilizer is used in the cotton and fruit growing stage. Imported fertilizer is used more, but domestic fertilizer is also indispensable,” said Mr. Chien.

Hope fertilizer prices decrease and stabilize

In 2021 - 2022, fertilizer prices increased dramatically. In 2023, the price of this item stabilized again but remained high, causing farmers like Mr. Chien and Mr. Giang to be very confused.

Mr. Chien calculated: “Fertilizer prices account for about 40% of the cost of agricultural inputs. Growing rice or fruit trees is the job of farmers, so even if the cost increases, even if there is a loss, we still have to do it.”

People are harvesting star apples in the garden. (Photo: Nguyen Chuong)

In the orchard of Mr. Ho Van Tuong's family (Truong Khuong A hamlet, Truong Long commune, Phong Dien district, Can Tho city), which has an area of ​​12 hectares, the main area used to be growing star apples. Now the trees are exhausted, so the family has switched to growing durian. Last year, the durian area harvested was about 7 hectares and this year it is about 10 hectares.

Growing durian, the cost of fertilizer is much higher than star apple. Using more organic fertilizer than chemical fertilizer, according to Mr. Ho Van Tuong, with star apple, the selling price has been quite stable in the past few years, with durian, the price sometimes goes up, sometimes goes down, households with experience in handling the off-season, the selling price of durian can be up to 130 - 150 thousand VND/1kg, if in season it is only 50 - 55 thousand VND/kg, after harvesting they have to reinvest in taking care of the tree, therefore, they only earn about 30 - 35 thousand VND/kg if the crop is favorable.

When asked about VAT on fertilizers, fruit and rice farmers like Mr. Chien, Mr. Giang, and Mr. Tuong are not sure about these policies. However, what they understand most clearly is that if fertilizer prices continue to increase by 5-10% each year, farmers' profits will certainly decrease.

Therefore, what they care about and expect is that the government and authorities have the tools to regulate the cost of agricultural materials, including fertilizers, to remain stable and decrease, thereby helping to lower costs and farmers can produce profitably.

“Agriculture cannot be done without fertilizer, otherwise the crops will not be effective. If the government has policies to encourage farmers, it needs to create conditions to reduce the cost of fertilizer. Only then will farmers and agricultural workers have a better life,” Mr. Tuong suggested.

Before 2015, according to the law, VAT on fertilizer was 5%. After receiving many comments, the 14th National Assembly issued Law 71 of 2014, effective from January 1, 2015, with the regulation that fertilizer is not subject to value added tax.

Currently, at the request of the Ministries, the Ministry of Agriculture and Rural Development, the State Audit, the Fertilizer Association, the National Assembly delegations of Bac Giang, Ca Mau, Binh Dinh, Hai Phong, Nam Dinh, Tien Giang, ... it is proposed to amend this content. Based on Section 2, Point d of Resolution 101 of 2023 of the 5th session, this item is to be reviewed. That is the reason why it is proposed to put fertilizers under the 5% VAT tax.

The National Assembly has submitted a draft revised Law on Value Added Tax (VAT). One of the contents that has received much attention is the proposal to impose tax on fertilizers and if tax is imposed, at what rate; how will this regulation affect the fertilizer market, fertilizer production and trading enterprises and especially farmers - who use this product?

VAT on fertilizer products: Part 2 - Perspectives of National Assembly delegates and recommendations from experts

Source: https://congthuong.vn/thue-vat-voi-mat-hang-phan-bon-bai-1-nhung-tran-tro-tu-dong-ruong-358003.html