Perspectives
by Lia Sciortino
Perspectives
China’s PR Problem Rears Its Head
Johanna Son
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CHIANG MAI, Dec 11 (TerraViva/IPS Asia-Pacific) - Powerful neighbour. A rising power. Old friend. Big, secretive investor. Big boy of the region.
These were some of the terms participants at a talk-show format discussion at the Mekong Media Forum used when asked to share the images of China they get from the media.
Reading Media
Johanna Son
BANGKOK -- Vietnam, Laos, Cambodia. What images might these words conjure up in the minds of international consumers of news? Perhaps war, maybe the Khmer Rouge. Or they might say, ‘Oh, it’s that those countries that had that war some time ago. . . they’re near one another, and they’re all the same’.
China: Benign Bully of the Mekong?
Johanna Son
SYDNEY, Oct 3 (IPS Asia-Pacific) – Over the last decade or so, China’s deft use of soft power has seen South-east Asian neighbours’ view of it change from a looming threat to a largely friendly, if still imposing, giant to the north.
Cooperation, the Other Side of Competition
Vietnam has long aimed to overtake Thailand as the world’s top rice exporter, but it faces a number of challenges, including the creation of internationally recognised rice brands, before it can attain this goal.
Between them, the two countries account for about half of the global rice exports, or about 14 million tonnes. As key players in the world market, they are competitors for exports but find themselves in the same boat when it comes to problems such as high domestic prices that can hurt exports, or excess supplies, or too much speculation and volatility in the market.
It is because of this that Vietnamese and Thai officials often talk about the need for their countries, though competitors in rice exports, to cooperate and avoid price-cutting in the interest of fair competition and have more stable prices.
At the end of 2007, Thailand continued to the world’s top exporter of rice with 9.5 million tonnes valued at more than 3.5 billion U.S. dollars, according to figures from the Thai Rice Exporters’ Association. Vietnam came in second, exporting 4.5 million tonnes valued at 1.48 billion dollars. Thailand is expected to continue leading Vietnam in the near future.
THAILAND’S STRENGTHS
Say Thai rice and ‘Hom Mali’ or fragrant jasmine rice comes to mind. Although Thailand exports several types of rice, Hom Mali is globally known for its fragrance and flavour and commands a premium price. Thais have developed three varieties of Hom Mali. Apart from Khao Dok Mali 105, the variety discovered in the fifties, there are Khao Jao Hawm Klong Luang 1 (KLG1) and Khai Jao Hawm Suphan Buri (SPR-A), which have higher yields and greater resistance to diseases and pests. Thai rice also gets better prices than Vietnamese rice.
Unlike Thailand, Vietnam has yet to build a well-known brand for its exported rice.
While there are Vietnamese rice trademarks such as Sohafarm of Song Hau Agricultural Co in the southern province of Can Tho, Kim Ke of Minh Cat Tan Ltd Co in Ho Chi Minh City and Nang Thom Cho Dao that are focused on conquering markets across the country, they have yet to amass enough power to compete with Thai rice brands in the international market.
Current trends show that Thailand is expected to hike its rice exports in the next years. Already in 2007, the country surpassed its export target of 8.5 million tonnes, due mainly to the fact that Thailand met a significant amount of demand in overseas markets after export rivals like Vietnam and India barred or limited their own exports because of short domestic supplies. While Thailand had its own problems and consumers also reeled from the sharp increases in rice prices at home, it was still able to draw from its stocks and consolidate its exports, meeting soaring demand elsewhere in Asia and Africa as well.
In 2008, Thai government figures put the country’s rice exports at 10.02 million tonnes. In that same year, Vietnam exported 4.7 million tonnes worth 2.6 billion dollars, according to the Vietnam Food Association.
In the coming years, Thailand and Vietnam will maintain their leading positions in the world market for rice, but the gap between them could become wider.
So, what is the secret behind Thailand’s success?
Over 50 years ago, Thailand became aware of the crucial role and the importance of rice to its nation. Since then, Thailand has invested in three areas to promote its rice beyond its shores: rice quality, branding and marketing.
Decades ago, rice farmers in some areas of rural Thailand grew rice for daily consumption. Nowadays, rice growers in central and north-east Thailand – the north-east is the largest rice-faming area in the country -- are more oriented toward exports. Just over 40 percent of Thais work in agriculture, according to the data from the Bureau of Economic and Social Statistics of the Thai government.
At the 2007 Thailand Rice Convention, then Thai Prime Minister Surayud Chulanont said that the country would continue to work towards greater efficiency and productivity in agriculture. “In so doing, we will not only adopt new technologies and modern farming techniques, but also make the best use of our traditional knowledge and ensure sustainable production through the Sufficiency Economy philosophy,” he said.
“We are confident that these efforts will enable us to serve as the ‘Rice Bowl of the World’. With appropriate marketing, research and development, our rice products will also spearhead our ambition to act as ‘Kitchen to the World’,” he said.
CHALLENGES FOR VIETNAM
Early reports in 2008 said that Vietnam could expect more favourable conditions in the world rice market, given an increase in demand for rice and poor wheat harvests. But despite the good opportunities these factors provide, the reality is that Vietnamese rice may not see major gains because of a number of difficulties.
First, the area for rice cultivation in Vietnam, whose rice exports picked up in the early nineties after its economic reforms, has been decreasing annually.
Vietnam has about four million hectares under rice cultivation out of about seven million hectares of agricultural land, says Professor and Doctor Vo Tong Xuan, president of An Giang University in Vietnam who is credited for transforming the country’s agricultural economy from a net rice importer to the world’s second largest rice exporter.
Thailand and Vietnam supply half of the world's rice exports.
But this, he said, is reduced by about 70,000 hectares each year due to growing urbanisation and shifts to other agricultural crops. High-yield rice seeds help somewhat to make up for the reduced volume caused by shrinking land. However, harvests are always under threat from natural calamities, and pest infestation. Thus, the country’s need to safeguard food security has forced Vietnam to set a limit on rice exports.
Second, Thai exporters have said they expect Thai rice to retain its high prices, with a focus on wealthy export markets. These are markets Vietnamese exporters would like to break into, but if Thailand continues to focus on these markets, Vietnamese enterprises face stiff competition.
In this case, Vietnamese exporters should focus on expanding in middle and low-range markets with their white rice, since Vietnamese rice has performed well in these two markets, thanks to the flavour and diversity of its varieties.
The delicious flavour of Thai rice is due to quality rice seedlings, but this is not the only reason why Thai rice is what it is today.
An expert from the Thailand Rice Exporters’ Association added that from the best of his knowledge and research, Vietnamese rice exporters do not buy rice directly from rice growers, but from rice traders. This, he explained, can create opportunities for fraud through the mixing of good quality rice with poorer-quality rice. Thailand tries to minimise the role of the middleman and of rice brokers. “By buying directly, rice export enterprises can control the quality of the rice, and the farmers get bigger profits,” said the expert.
But 2007 can still be considered a success in terms of rice exports for Vietnam. Rice production in Vietnam’s south was higher than that of the north: Output from the Mekong Delta, the country’s main rice-growing area, and the south-eastern region was 700,000 tonnes higher than that of 2006. This put the total national volume at 20.5 million tonnes, 18.7 million tonnes of which was accounted for by the Mekong Delta alone.
Vietnamese agricultural experts have calculated that to produce a kilogramme of rice, rice growers only spend 1,600 dong (0.09 U.S. cents) on labour, fertiliser, pesticides, water, and transportation.
In 2008, the Vietnam Food Association set a minimum buying price of 4,000 dong per kilo, therefore yielding a net profit of 2,400 dong per kilo.
However, an agricultural engineer said in an interview that sharp rises in costs have actually been eating into farmer’s profits. “The input cost to produce one kilogramme of rice can’t be 1,600 dong (but would) be 2,400 dong instead – and that’s not including harvest losses. Where there is diminishing land under rice cultivation, such profit margins for farmers are still too little,” he explained.
RETHINK NEEDED
Statistics in the last few years show that Thailand is leaving Vietnam behind in terms of rice production, rice exports and foreign currency earned from these exports. This trend calls for a rethink: Instead of competing with Thailand, Vietnam should cooperate with it on a win-win basis.
In this way, Vietnam would have a better chance of reaching the targets of improving export quality and volume, put forth at a 2007 conference on rice exports and in the country’s 2008 plan set forth on Jan. 18, 2008, as well as the aim of raising farmers’ income.
In order to maintain its rice export position relative to Thailand, Vietnam must join hands with Thailand in the areas of rice production and exports. Both countries have stressed this many times before, including in a November 2006 memorandum of understanding they signed on rice exports. Accordingly, twice every month, Thailand and Vietnam exchange information on rice to keep rice importers from cutting prices. Every three months, the two countries meet so that their rice exporters can discuss their cooperation plans.
The director-general of the Thailand Department of Foreign Trade, Apiradi Tantraporn, said that these measures help the two countries to better control rice reserves, prevent falling prices and unhealthy competition.
Some forms of bilateral cooperation actually commenced several years ago, including the exchange of expertise between research institutions, and the organisation of field trips for farmers to learn about cultivation techniques. However, cooperation remains at a basic level, with each nation mainly looking after its own interests.
At the summit of the Association of South-east Asian Nations (ASEAN) in Cebu, Philippines in 2007, Surayud expressed support for a proposal by Vietnamese Prime Minister Nguyen Tan Dung to enhance cooperation and exchange experiences in rice exports. The prospect of more cooperation has opened the door to a new path of stability for Vietnamese rice in the international arena.
(*This is an updated version of an article, produced under the Imaging Our Mekong programme 2007-08, was published in ‘Nguoi Lao Dong’ (The Labourer) newspaper in Vietnam.)
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Mekong ICT Camp 2010
The Mekong ICT Camp (http://mekongict.org), a biannual training workshop on information, communication, and technologies for citizen media, community health, and civil society practitioners in Mekong subregion, is accepting applications until Mar. 31, 2010. Participants are welcome from the Mekong countries, including Burma, Cambodia, Laos, Thailand, and Vietnam.
COMING SOON: 'TALKING GENDER IN THE MEKONG MEDIA'
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BANGKOK - Do media organisations in the Mekong Region think that gender sensitivity, including giving voices to women, is part of doing better stories? How do they define it within the context of their societies and how do they report on different genders and sexuality? Do they include the use of gender-friendly language in their stylebooks and training programmes? How much is using a gender lens a news habit?
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