HOW TO INCREASE PROFIT FOR FARMERS IN VIETNAM

Both my aunt and my uncle are farmers. They work really hard on their farm, however they don’t earn much money. As well as my relatives, many other farmers work on their field whole year, but they don’t make as much profit as they should have got. There is a reality is almost farmers in Vietnam are poor, low income and less education. Many of them think that they make profit by working hard; they don’t have knowledge about market, or how to do marketing for their products to get higher benefits. Despite how hard they work, they just earn very little profit in comparison with intermediate wholesalers who do business by buying agricultural products from farmers to sell to consumers, retailers. You will be surprised by the big differences between price that wholesalers buy from farmers and the price when they sell to retailer. For example, a kilogram watermelon that a wholesaler buy at the farm will be 500 – 1,000 VND, however, when they sell to retailers, it will be around 6,000 – 8,000 VND. And when that watermelon comes to consumers, it is around 10,000 -12,000 VND per kilogram. There is a huge difference in price, and a very difference in profit among farmers, wholesalers and retailers.

In the story above, farmers are the hardest workers; nevertheless, they earn the least. There is unfair in allocating surplus in society in Vietnam, and that is one of the reasons why the distance between the rich and the poor is getting larger and larger. In 2010, there was a story about a group of 4 students who come from Ben Tre province, where is famous for milk fruit, they saw the inequity their parents and other farmers from Ben Tre received, so they decided they would found the market for milk fruit without selling through wholesalers. Their story was on newspapers at that time, moreover, in 2011, there was a film made from that story. Instead of selling milk fruits through intermediate wholesalers, they connected directly with the retailers in Ho Chi Minh City, where is the main market for milk fruits. They also found the purchasing department of supermarkets to offer good price for providing milk fruit.  By those ways, they helped their parents and farmers increase their profit a lot.

Connecting directly with retailers is a way to raise profit for farmers. However, it doesn’t always works efficiently in case farmers just have small amount of agricultural product, so the cost to find their own market will high. In this situation, the authority at that local should protect farmers by having an organization to buy these products and sell to factories, retailers or to export. On the other hand, to avoid farmers from producing too much that organization can’t solve an enormous amount, the authority should have an announcement to farmers how much they will buy from each farmer base on the area that farmer has. Besides, the government should also have policies to help farmers by subsidy of setting minimum prices.