The Ministry of Industry and Trade has signed a decision to abolish a plan on rice trading and exports with unsuitable regulations that have become hurdles in the expansion of the sector.This decision to repeal regulations on rice exports and trade came about to facilitate transparency in business environment and enhance business investment in the field to increase rice consumption for the farmer. Three years ago, the ministry had issued Decision 6139/QĐ-BCT that stipulated conditions for becoming a rice export firm and set the maximum rice export licence limit to 150 traders. Under the decision, firms that applied for licences to export rice had to have at least one warehouse with a minimum capacity to store 5,000 tonnes of rice and one rice husking factory with a minimum capacity of 10 tonnes of paddy per hour. The facilities had to be located in planned areas.
But the experts believed that because of these stipulations, many companies that had developed their own rice brands and had close relationships with farmers could not actively and directly export their products and rather had to rely on intermediaries. In addition, once a company has a rice export certificate, it must export at least 10,000 tonnes of rice per year or 20,000 tonnes of rice in two years, if the quota for the first year is not reached. This clause proved to be a hurdled for the exporters, who in order to achieve the target by purchasing stipulated volumes of rice, would have to overlook quality of rice. The regulations on the number of rice exporters and rice export quotas were detrimental to the growth of the rice export sector and should be repealed, experts suggested.
Therefore the abrogation of Decision 6139 is one of the steps taken by the ministry to streamline administrative procedures, in accordance with the Law on Investment 2014. The ministry is expected to create a healthy market for enterprises investing in rice production and trade and to ease farmers’ difficulties, thereby helping boost high-quality rice exports. In 2017, the ministry has pledged to abolish 15 legal documents and simplify 108 administrative procedures. The reforms will echo the Government’s determination to support enterprises, improve the investment environment and raise national competitiveness.