Rice Field Lose 5 percent in Vietnam make Rice Commodity Prices Jump

Second largest rice exporter, Vietnam may lose about 5 percent of the rice field or farmland used for the crop by 2020 as malls and industrial parks spread, according to the government, which has drawn up a plan to halt the losses.

The agricultural ministry aims to keep the national rice- growing area at 3.8 million hectares in 2020 in an attempt to limit the invasion of non-agricultural development, according to a statement on the ministry?s website. At present, there are more than 4 million hectares of rice fields.

Vietnam?s forecast underscores the challenge Asian nations face in preserving farms and maintaining food security even as they promote economic growth, spawning larger cities, bigger factories and more golf courses. China may struggle to meet its grain needs as farms shrink, the agriculture ministry has said. The nation?s rice shipments totaled 5.6 million tons in the January-to-September period, 12.3 percent more than a year earlier, according to the General Statistics Office in Hanoi. Exports may reach 7.2 million tons this year, the Thoi Bao Kinh Te Vietnam newspaper said on Sept. 23, citing the Vietnam Food Association. Only Thailand ships more rice to the global market.

?We need to keep land for rice production in order to ensure national food security and our annual export targets,? Nguyen Tri Ngoc, head of the cultivation department at the agricultural ministry, said by phone today. ?We need to work out how to limit cities, provinces from turning paddy fields into golf courses, hotels and malls.?

Rice shipments from Vietnam reached a record 6 million metric tons in 2009, according to government figures. The previous year, Vietnam joined other producers in curbing exports amid a shortage, contributing to record prices and helping trigger concern that there was a global food crisis.

Rough-rice futures in Chicago traded today at $12.83 per 100 pounds, gaining for a fourth straight day. The most-active contract peaked at $25.07 per 100 pounds in April 2008. Rapid urbanization in China, the world?s most populous nation and Vietnam?s northern neighbor, led cereal production to fall more than 20 percent between 1997 and 2003, according to the Australian Bureau of Agricultural and Resource Economics. China?s Premier Wen Jiabao has said that declining grain output ?poses a threat? to national food security.

Vietnamese Prime Minister Nguyen Tan Dung ordered provincial authorities not allow new golf courses to take over rice fields or other farmland, according to an Oct. 6 statement. The country has about 60 courses in operation or being built.

Vietnam?s economic growth has exceeded 7 percent during the past decade, pushing per-capita income for its 87 million people past the $1,000 mark. The government is targeting a figure of as much as $3,000 by 2020.