Agricultural production has faced the capital restraint

​Many livestock and plant companies expect to have access to the loans to maintain their production. Photo by P.A

Worried that the banks will tighten the lending conditions and limits for fear of risks, both enterprises and farmers expect to remove the obstacles in accessing the sources of capital, especially preferential capital sources in order to maintain and develop their production activities in difficulties. 

Difficult to access the loans

This is the first time ever, the enterprises and farmers have needed the capital to maintain their production activities as they are today. However, in reality, it is very difficult for both enterprises investing in agricultural sector and farmers to access the loans because the banks now have stricter control over the loans. And the lending limits is also much lower than before because this is a high-risk period. 

Mr. Cao Van Khanh, Director of Cao Khanh Poultry Breeding Co., Ltd (Binh Dinh Province), an enterprise investing in 02 breeding chicken production facilities in Dong Nai Province said that the current price of breeding chickens sold at the farm is only about VND5,000 per chicken, about 50% lower than the production cost of the breed. Although the price of breed is low, the current market for breeding consumption in the South of Vietnam is almost freezed because there are not many farmers to import the breeds and re-herd. The reasons are that the more they raise, the more losses because the oversized chickens are difficult to sell. Even if it can be sold, the farmers will also suffer a heavy loss because the price of broiler chicken is too low. In the past time, many enterprises producing the breeding chickens have suffered losses and closed down. Currently, the enterprise is trying to maintain their production to ensure jobs for more than 400 workers who are working at the parent company as well as the breeding production facilities in Dong Nai Province. More than ever, the enterprises need the loan capital to cover and overcome the current difficult period. But, with the current requirements on loan procedures, accessing the bank capital is impossible for the enterprises. Mr. Khanh cited: "The enterprises cannot sell their goods, facing the difficulties, they need to borrow the capital in order to maintain their production, but the requirements in loan documents asking the enterprises to mantain their revenue. The completion of loan procedures, especially the appraisal of loan collateral, are facing many obstacles and difficulties due to the epidemic such as with the same assets as before, but the enterprises now are considered for a much lower loan than before.

With the same concern, Mr. Nguyen Tan Hau, Director of the Tam Do Breeding Co., Ltd (Bau Can Commune, Long Thanh District) said, because of losses, currently the farmers do not dare to invest the re-herd. Accordingly, over the past 2 months, when many provinces and cities have implemented the social distancing to prevent and control the Covid-19 epidemic, the enterprise's hatchery has almost failed to sell pig breeds as well as gilts. The enterprises are forced to sell the gilts at the price of pigs and lose about VND3 million per piglet. "The biggest desire of businesses at present is to have timely access to the sources of loans in order to overcome the current difficulty. But this is very difficult because with the same collateral, businesses can currently borrow a much lower amount of capital than before due to the bank tightening the lending limit in the high-risk period", Mr. Hau said.     

Many processing and exporting enterprises face the difficulties in capital sources. 

Photo: Meat processing at an enterprise in Bien Hoa City. Photo by P.A

Expecting to access the preferential loan

According to both farmers and enterprises investing in the agricultural sector, due to the long duration of the epidemic and the increasingly difficult situation, producers all need the capital support; At the same time, it is expected that banks will promptly implement the interest rate support packages, reduce the interest rates or freeze and delay debts in order to remove the difficulties for production activities as the Directive of the Government.

Mr. Nguyen Ngoc Luan, Director of the Lam San Cooperative (Lam San Commune, Cam My District) said that the cooperative has well exported the pepper to the fastidious markets, especially the European market. The cooperative is expanding investment in a large field project to produce the organic pepper in order to attract the farmers to participate. Especially, at present, the cooperative is in need of investment to expand the deep processing line of products from pepper. The biggest difficulty of the cooperative at present is that although the large field project for the organic pepper production has been implemented for many years, it has access to very little capital in the support program. “In the past few years, the pepper has been faced difficulties, and especially now, the activities of the cooperative is more difficult due to the impact of the Covid-19 epidemic, so the cooperative needs timely support in terms of preferential capital sources in order to maintain and expand the scale of production in this difficult period, without losing the opportunity to increase exports of organic pepper to difficult markets" -  Mr. Luan said.

With the same desire, Mr. Nguyen Van Hau, a fish farmer in Song Trau Commune ( Trang Bom District) shared that he has spent nearly billion of VND of the capital in order to buy feed for the fish ponds, of which part of the investment money is borrowed from the bank. Currently, he has no capital to manage because the bran dealers do not let him buy bran short of money until he sells fish and will pay as before. Due to the difficulty in the capital sources because the fish cannot be sold at harvest time, so the ponds are being fed in moderation by the lack of capital. Mr. Hau wished that the bank would reduce interest rates and create the conditions for farmers to access more preferential loans in order to maintain his production.

Phan Anh