Enterprises have begun purchasing 1 million tonnes of rice for stockpile in the Mekong Delta under a Government programme that aims to ensure farmers make a profit.

The purchase, carried out at a time when the farmers in the nation's biggest granary have harvested their summer-autumn rice, will last until the end of next month.

The Government has covered 100 percent of interest rates on loans for a three-month term for businesses buying rice. Assigned by the Vietnam Food Association, 115 eligible enterprises have joined the programme with a targeted amount in each province. For example: Long An province 91,000 tonnes, Kien Giang 85,000 tonnes and Bac Lieu and Hau Giang 10,000 and 15,000 tonnes.

According to leaders of Vinh Hung district of Long An province, farmers have been waiting for enterprises.

The price fixed by the Ministry of Finance is 4,142 VND average per 1kg of unhusked rice.

According to the association, with such a low price, plus difficulties in export markets, the programme could only guarantee a low profit for farmers, less than the 30 percent expected by the Government.

Head of the sales department of the Dong Thap Food Company, Dang Van Khuong, told Radio The Voice of Vietnam (VOV) that a 30 percent profit could only be gained if the unhusked rice was sold at 5,400 VND.

Minister of Agriculture and Rural Development Cao Duc Phat has also admitted it was a problem, but it could not be settled during the economic downturn.

Other support policies will be worked out to help both businesses and farmers, he said.

For example, a special preferential credit programme would be provided to farmers so they would stockpile their products.

But in the long run, he said, there must be stable contracts signed between the two sides to ensure an outlet for farm produce, particularly rice.

The ministry has also worked with localities in another programme to encourage replacing rice with other cash crops on poor quality farming land such as maize or soya bean.

Earlier this month, in a meeting to seek solutions to consume farm and aquatic produce, Deputy Prime Minister Hoang Trung Hai requested the association guide their business members to buy rice.

Any businesses found to cause damage to the export enterprise community and farmers must be excluded from the association, Hai said.

However, according to many businesses, their biggest challenge was the large stockpile of rice from previous seasons.

Managers of the Docimexco JS Company in Dong Thap province said due to the fall in the rice price after the stockpile of the last winter-spring season, the company still has 30,000 tonnes in storage, despite looking for partners to export the remainder.

Association chairman Truong Thanh Phong assured businesses that the rice market would pick up from July.

The association figures showed Vietnam had exported 2.79 million tonnes of rice in the first five months, an increase of about 10 percent from the same period last year.

In June, some 750,000 tonnes are expected to be exported, raising the exported figure in the first half this year to 3.5 million tonnes, 100,000 tonnes up from last year's corresponding period.