Many Vietnamese traders have been working with Chinese partners in deals that ultimately cheat Vietnamese farmers.
Bitter sweet potato lesson
Recently, Vietnamese traders, along with Chinese partners, create an increase in sweet potato prices. Due to the high prices, in recent years many farmers in Binh Tan District, Vinh Long Province, rushed change their plots from rice paddies and grow sweet potatoes.
Impromptu trading areas have been set up where sweet potatoes are sold to traders in order to fulfill their contracts with Chinese partners. Most of these are in Binh Minh and Binh Tan districts certifying their standards.
However, once farmers have changed their crops, the traders work together to force the prices down again because of the high supply. At their height, prices were around VND1 million (USD47.6) per 60kg, while after the price-fixing they dropped as low as VND200,000.
Farmers in Vinh Long Province besides their sweet potato crop.
Meanwhile, most contracts between farmers and traders are based on verbal agreements, further allowing the frequent price squeezes.
Fields in many districts in Vinh Long Province growing sweet potatoes have been passed over by traders during harvest time.
Mr. Tu Phuc, a farmer in Binh Tan District, said that the total cost per hectare for growing sweet potatoes can reach VND140-170 million, not including land rental fees, leaving farmers in a difficult position amid the price squeeze.
Price manipulation leads to bankruptcies
Farmers in Binh Tan District have always looked up to a trader called Pham Trung T, who specialises in selling sweet potatoes to China. T had many contracts, but when his partners failed to make good, he fell into debt. It is said that T even turned to cheating his family to keep afloat.
This does not seem to be a unique story. Many small seafood producers in Nam Can, Ca Mau Province have also fallen victim of Chinese traders. In the period between late 2011 and early 2012, Chinese traders flocked to there to buy crab at high prices, using Vietnamese intermediaries. At first they paid the Vietnamese traders up front, but soon fell behind in their payments, causing large losses for traders and farmers alike.
