Sugarcane in the West... "no longer sweet"

The area is getting… narrower

Long An, Kien Giang, and Ca Mau provinces were once bustling sugarcane growing areas, but now all sugar factories in the area have closed, and sugarcane growing areas have almost disappeared. Ten years ago, sugarcane was the main crop of farmers in Ben Luc district and some communes in Thu Thua district (Long An province) with a total area of up to 11,000 hectares.

To date, most of the sugarcane growing area has been converted by farmers to grow lemons, dragon fruit, guava, etc. Without raw materials for production, Hiep Hoa Sugar Factory in Long An has been operating at a standstill for many years, incurring tax debts and unpaid wages for workers, leading to complaints. To date, this factory has officially closed.

Five years ago, Cu Lao Dung district (Soc Trang province) had nearly 10,000 hectares of sugarcane growing area, now it has less than 3,000 hectares. Similarly, in Tra Cu district (Tra Vinh province), from 4,000 hectares in 2015, now there are about 1,100 hectares... Many farmers in the West said that the main reason why people "turn their backs" on sugarcane is because of unstable sugarcane prices.

Mr. Thach Det (Luu Cu 1 Hamlet, Luu Nghiep Anh Commune, Tra Cu District, Tra Vinh Province) said that his family has been growing sugarcane for generations, but since 2015, he has converted all 10,000 square meters of sugarcane land to rice because he has been losing money growing sugarcane for many years.

“This situation is caused by the factory not having an agreement or contract to estimate the price and volume of sugarcane it will purchase from the beginning of the season with farmers, while the local government is out of the picture. When it comes to harvest time, the factory forces down the price, forcing farmers to sell as much as they can,” Mr. Det shared.

Farmers in Tra Vinh province harvest sugarcane

In Phung Hiep district (Hau Giang province), the sugarcane growing area was large in recent years with nearly 7,000 hectares, but now the sugarcane growing area has decreased by nearly 2/3. Most farmers in this locality grow sugarcane to sell in tens (traders buy and resell to beverage presses or sugar mills), not placing their hopes on sugar factories.

Farmer Hai Cuong, in Cay Duong town, Phung Hiep district, shared: "The advantage of selling sugarcane is that traders hire workers to cut it down, so we don't have to spend effort or money on harvesting. Not to mention, there are many traders who buy it, and if we can't sell it to one person, we can sell it to another, so we don't get forced to lower the price."

Faced with this situation, on October 23, the Board of Directors of Phung Hiep Sugar Factory (the largest sugar factory in the West, with a capacity of pressing 2,500 tons of sugarcane per day) had to announce that it would stop operating in the 2023-2024 crop year. "When the factory stops operating in the 2023-2024 crop year, the unit will incur a loss of VND 26.5 billion for factory depreciation costs, handling of laid-off personnel, maintenance, security... However, this loss is only 1/3 compared to the plan to continue operating," said a representative of the Board of Directors of Phung Hiep Sugar Factory.

Need to promote production chain linkage

Mr. Huynh Ngoc Nha, Director of the Department of Agriculture and Rural Development of Soc Trang province, acknowledged that there are many reasons for the shrinking area of raw sugarcane in the province, but the main reason is that farmers and sugarcane companies have not yet linked up in production and product consumption. Realizing this problem, the agricultural sector and authorities at all levels in Soc Trang province are strengthening and promoting the role of "bridge" to link farmers and sugarcane companies into the production chain.

In the near future, the locality will organize more meetings between businesses, companies, sugar factories and sugarcane farmers. The purpose is for these entities to better understand the activities of their partners, have a common voice, and reach agreements and contracts for production and consumption of products, then the situation of price pressure will be difficult to occur. At the same time, when participating in these meetings, the government and the agricultural sector will also listen to opinions from people and sugar companies, promptly support and remove difficulties in the production chain.

According to Mr. Huynh Van Thao, Head of the Department of Agriculture and Rural Development of Tra Cu district (Tra Vinh province), in the 2022-2023 sugarcane crop, farmers will have a profit of 30-40 million VND/ha. However, this is only the second profitable sugarcane crop after 5 consecutive years of heavy losses. The common difficulty of sugarcane today is that the mechanization in production and harvesting has not been applied synchronously, most of which rely mainly on labor, so costs increase.

To expand the area of raw sugarcane in the area, in the coming time, the locality will plan the transportation system to serve production, reorganize production, establish cooperatives, organize production teams to reduce costs and increase income of sugarcane growers.

Mr. Tran Ngoc Hieu, General Director of Soc Trang Sugarcane Joint Stock Company (Sosuco), said that the situation of "buying and selling" between sugar factories still occurs regularly. Especially the competition to buy by "dumping prices" leads to unstable and unsustainable connections between people and businesses. "Once the government does not have a solution to thoroughly handle this situation, it will be very difficult for the sugar industry to develop," said Mr. Hieu.

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