Fertilizer VAT: Concerns of farmers in the West

Faced with the proposal to impose a 5% value-added tax (VAT) on fertilizers, rice and fruit farmers in the West want state management agencies to reduce fertilizer prices to reduce input costs.

Mr. Pham Truong Giang spreads fertilizer after sowing - Photo: C.TUE

In recent years, rice prices have reached record highs thanks to the boom in rice exports. Rice farmers in Ca Mau have made profits, but the profits are very low, from 3.3 to 3.5 million VND/ha. In particular, the high price of fertilizer has greatly affected farmers' production and profits.

Chairman of Ca Mau Farmers' Association Huynh Quoc Hung shared this when taking us on a field trip to Long Giang Agricultural Service Cooperative (Khanh Binh Tay commune, Tran Van Thoi district, Ca Mau province).

Fertilizer prices continue to increase, farmers hope for lower prices

In early November, in the fields of Khanh Binh Tay commune, farmers are urgently cleaning and sanitizing the fields, pumping out water to plant early the 2024-2025 winter-spring crop.

While spreading nitrogen fertilizer (urea) for more than 3 hectares of newly sown ST25 rice, Mr. Pham Truong Giang - Director of Long Giang Agricultural Service Cooperative - said that from sowing to flowering, fertilizer must be spread three times and one time for patching. The fertilizer cost VND6.6 million - accounting for 40% of the total input cost for production.

"The price of rice has increased, but the price of materials has increased even more. A bag of fertilizer has increased by 200,000 VND, but 1kg of rice has increased by 1,000 VND. The difference between the price of rice and the price of materials is still very large, so profits have not increased," said Mr. Giang, adding that if farmers are not careful, they cannot make a profit of 30%.

Regarding the National Assembly's discussion on changing fertilizers from non-taxable to 5% VAT, Mr. Giang said that farmers do not fully understand the tax policy. In reality, farmers see that fertilizer prices are increasing.

"People recommend that superiors have solutions and policies to reduce costs and improve the quality of fertilizers to reduce input cost pressure and increase efficiency and profits for rice farmers," said Mr. Giang.

Farmers in Can Tho harvest star apples - Photo: C.TUỆ

Sharing the same suggestion as Mr. Giang, Mr. Bui Van Tuong - a farmer growing 12 hectares of durian and star apple in Truong Khuong A hamlet (Truong Long commune, Phong Dien district, Can Tho city) - said that each year fertilizer increases by an average of 5% and even though the price of fertilizer is high, farmers are still forced to use it for rice and fruit trees because not using it is ineffective.

"While the selling price does not increase, farmers' profits are shrinking. If the government has a policy to support fertilizer prices, farmers will have a better life," said Mr. Tuong.

Expecting businesses to share with farmers

Vice President of Can Tho City Farmers' Association Tran Thi Thien Thu said that when it comes to applying 5% VAT on fertilizers, farmers naturally think that buying fertilizers will increase compared to when there is no tax.

"However, from the perspective of macro management, farmers and people trust the management of the Government and the advice of specialized units. The Government has the problem of how to best harmonize to both ensure the interests of businesses and ensure that farmers benefit the most.

It is also possible that when applying a 5% VAT on fertilizers, the selling price will be equal to or lower than if no tax was applied. Farmers also expect businesses to share profits and support farmers for sustainable development," Ms. Thu added.

"In theory, when applying a 5% VAT, farmers will benefit, but on the contrary, when the fertilizer input market increases, especially depending on foreign markets, farmers will not benefit much.

At that time, the Party and the State need to continue to have policies to intervene and support farmers to stabilize their lives and rise up, with the main goal of farmers being the main subject of the process of building new rural areas," said the Chairman of the Farmers' Association of Ca Mau province.

Workers at Ca Mau Fertilizer Plant transfer fertilizer to ships for consumption - Photo: C.TUỆ

Speaking with Tuoi Tre Online , Deputy Minister of Agriculture and Rural Development Hoang Trung said the ministry's stance is to support the imposition of a 5% VAT on fertilizers.

According to Mr. Trung, after all, we want to create maximum conditions for businesses to have more resources to supplement products, improve production lines, buy more equipment and production technology, and most importantly, reduce fertilizer costs, which will benefit farmers.

"When the ministry works with the Vietnam Fertilizer Association and businesses, they all aim for that goal. Applying VAT will give businesses more resources to improve technology, thereby reducing the production cost of each ton of fertilizer, helping people buy materials and fertilizers at cheaper and more reasonable prices, thereby reducing input costs and increasing profits," said Mr. Trung.

Source: https://tuoitre.vn/thue-vat-phan-bon-tran-tro-cua-nong-dan-mien-tay-20241113160714285.htm