Workers load up fertilisers at the Lam Thao Supe Chemical Company’s factory in Phu Tho Province. (Photo: VNA) Hanoi (VNA) - Following theimplementation of a provisional tax on imported fertilisers, more things needto be done to help balance benefits of both local producers’ and farmers’benefits, industry insiders have agreed.
DAP and MAP fertiliser products have beenofficially subject to safeguard measures with a provisional tax rate of 1,855,790VND (85.6 USD) per tonne since August 19, under a regulation set by theMinistry of Industry and Trade (MoIT).
The decision was expected to help relievedomestic fertiliser producers from competition pressure brought on by importedproducts and has also created opportunities to revitalise the country’sfertiliser-producing industry.
However, experts have reached consensus latelast week that though the tax was issued in favour of domestic production,future optimal solutions are still required to help balance both producers’ andfarmers’ benefits as the safeguard measure is just temporary.
The temporary safeguard measure will last nomore than 200 days and the imposition will be ceased by March 6, 2018, orwhenever the Ministry of Industry and Trade issues an official decision.
Le Trieu Dung, Deputy Director of the TradeDefence Department under the MoIT, affirmed that safeguard measures have clearobjectives, to create an equally competitive market, in which domesticfertiliser enterprises will be competing on a long-term basis with importedproducts.
He argued that though the tax would initiallydrive prices up in the market, seemingly hurting farmers’ income, it would createa healthy basis for fair competition when the market readjusts stable inputprices.
In order to harmonise benefits for both parties,MoIT has co-operated with the Vietnam Fertiliser Association, VFA, to amend andsupplement some related regulations of fertiliser products not subject to valueadded tax (VAT) to create more favourable conditions for fertiliserenterprises, Le Trieu Dung added.
Nguyen Van Thanh, Director of the MoIT’sDepartment of Chemicals, said that the ministry’s decision to impose self-defencetax on fertilisers was very timely and beneficial to enterprises producing DAPand MAP fertiliser products.
Regarding the fertiliser market, he consentedthat there was a time when fertiliser imports were cheap, but they have becomeexponentially more expensive. So, in the long run, the imposition ofself-defence tax will help stabilise the market, and eventually farmers willalso benefit from it.
More importantly, domestic enterprises willregain their status as an active source of supply, no longer dependent onimports or passive in production.
This is considered as the number one advantage,as dependence on imports can prove to be very dangerous, especially when thecountry needs a counterbalance to curb the increasing quantity of fertiliserimports, said Thanh.
In addition, the experts also said that theapplication of trade remedies will double as anti-dumping of foreign fertiliserproducts into Vietnam, helping to partly protect the interests of consumers inthe country.
Nguyen Tien Dung, Chairman of the AgriculturalProducts and Materials Joint Stock Company (Apromaco), emphasised that twofuture solutions should be implemented in parallel, once the provisional taxhas ended.
He suggested that MoIT should reduce VAT to 5 percenton imported fertilisers, while encouraging domestic producers to improveproduct quality and cut down on cost, so both firms and farmers can equallybenefit.
In case such a solution is approved, it isestimated that fertiliser producers can save up to VNĐ2.5 trillion (111 millionUSD) in expenses each year, which would help enhace considerably theircompetitiveness in terms of price.
Nguyen Tien Dung also said that under thesesafeguard tariffs, domestic producers will benefit, while importers will facedifficulties due to higher input costs. Therefore, imposing such a tax does nothave a big impact on farmers or producers who receive support from theGovernment on anti-dumping mechanisms needed to maintain a reasonable pricelevel.-VNA
VNA
