Vietnamese Catfish Contract Law to Help Stabilize Industry
In order to reduce financial and product quality risk and prevent shortages, Vietnamese tra processors now have to breed their own supply or enter into a contract to buy from breeders, the Vietnam Association of Seafood Exporters and Processors announced today.
Due to large profits, farmers flocked into the tra-raising business this year, which caused a surplus and devaluation of the fish.
Forty percent of tra farmers are quitting due to losses. Now banks will not offer loans for farmers but instead will pour capital into tra farming. Processors then will supply fish breeders with broodstock and feed. The catfish farmers will raise the catfish for the processors and then under contract, sell the supply of fish to them.
Currently, the catfish businesses can supply 70 percent of the catfish input needed for next year's production, the remaining 30 percent will be fulfilled by signing contracts with seafood farmers, according to VASEP.
The 2009 target for the export value of Vietnam's tra catfish has been set at $1.5 billion, up 25 percent from this year's target, which will require 1.2 million metric tons of input materials to produce 600,000 metric tons of tra fillets.