The Vietnam Federation of Commerce and Industry (VCCI) has just commented on the draft Decree amending and supplementing Decree No. 107/2018 on rice export business and Decree No. 01/2025 which are being consulted by the Ministry of Industry and Trade.
Enterprises should not be banned from renting warehouses containing wheat and rice
Article 1.1 of the draft (amended Clause 2, Article 4 of Decree 107/2018/ND-CP) stipulates that rice exporting traders are required to own warehouses containing rice, rice, instead of being allowed to rent as currently prescribed. VCCI believes that this regulation needs to be reviewed in many aspects.
Firstly, the conditions for warehouses containing rice and rice are for the main purpose of assessing the operational capacity and ensuring the reserve capacity of enterprises. Both ownership or lease can meet this goal, as long as the enterprise ensures sufficient operational capacity and complies with relevant regulations.
Therefore, the mandatory possession of warehouses is an unnecessary interference in the right to free trade, contrary to the operating principles of a market economy.
According to the explanation of the drafting agency, some businesses are currently renting warehouses or blending facilities just to meet export conditions, but do not maintain operations afterwards. However, VCCI affirmed that this is a matter of law enforcement, not due to loopholes in current regulations.
In case the business does not maintain the conditions as registered, the license can be revoked, instead of issuing a "if you can't manage, then ban" regulation as in the draft. This is also contrary to the spirit of Resolution 68-NQ/TW of the Politburo on private economic development.
Second, the requirement to own a warehouse will significantly increase the cost of entering the market, especially for small and medium-sized enterprises. Having to invest in building or buying warehouses not only causes great financial pressure but also limits the participation of new enterprises, reduces competitiveness in the rice export market and directly affects farmers' income, as well as the sustainability of the rice value chain.
Third, the reason cited is that businesses renting warehouses will have a competitive price advantage due to not having to invest initially, which is unreasonable. VCCI said that warehouse rental enterprises still have to bear the rental costs, a legal and inevitable cost in business and this has been included in the product cost.
In the market economy, it is normal for one enterprise to have a competitive advantage over another and should not be subject to administrative intervention if there are no unfair competitive factors.
From the above analysis, VCCI proposed to remove the regulation on mandatory warehouse ownership in the draft.
Minimum reserves cause difficulties for new businesses
Article 1.7 of the draft (amending Article 12 of Decree 107/2018/ND-CP) stipulates that new traders must ensure a minimum reserve of 1,250 tons of rice within 45 days from the date of issuance of the certificate of eligibility for business, and maintain it until they have rice export achievements.
VCCI believes that this regulation significantly increases barriers to entering the market for new businesses. When there is no export contract, the requirement to import and reserve a large amount of rice will force businesses to mobilize large capital, bear the costs of storage and preservation - creating unnecessary financial burdens. In addition, not knowing the time to issue the certificate also makes it difficult for businesses to plan to purchase and organize reserves.
The reason given is to avoid the situation where businesses only buy when they have signed a contract, causing fluctuations in domestic rice prices. However, VCCI believes that this regulation only applies to new traders, so the impact on the market is insignificant.
Another problem is that the drafting agency believes that not organizing purchases at the right time affects the income of farmers. However, if this only happens to a small group of new traders, it is not a concern. On the contrary, if most businesses have this behavior, the regulations themselves are not strong enough to solve the root of the problem.
Therefore, VCCI proposes to remove the regulation on minimum reserves for new traders.
In Article 1.4 (adding Point i, Clause 1, Article 8), the draft stipulates the revocation of the license in case the Ministry does not receive a report on the circulation reserve level after 45 days from the date of issuance of the urging document.
VCCI believes that it is reasonable to require businesses to provide reports to serve operations. However, if the enterprise does not report on time, this is an administrative violation and is not a reason to revoke the business license - which is the basic right of the licensed enterprise. Unless the business no longer meets business conditions, it should consider strong measures such as revoking the license.
Similarly, the draft also stipulates that the license cannot be adjusted when there are changes in content. VCCI believes that administrative errors such as slow reporting or changing information need to be handled in an appropriate manner rather than revoking the business rights of the enterprise.
Prohibiting export entrustment from going against the integration trend, opening the market
Another controversial point in the draft is the regulation in Article 1.1 of Decree 01/2025/ND-CP prohibiting enterprises from not having an export license and entrusting them with a license.
According to feedback from the business community, this regulation has significantly reduced business opportunities, especially for businesses with production capacity but not eligible for an export license.
Some businesses even have to consider the option of "pushing" customers to buy rice from other markets such as Thailand or Cambodia - where export business conditions are more open; thereby directly affecting the competitiveness of Vietnamese rice. Many businesses are at risk of having to close due to inability to access export markets.
VCCI emphasized that export entrustment is an activity in accordance with the Trade Law and current legal documents, in the context that rice is not on the list of prohibited goods or temporarily suspended from export. The ban on entrustment activities is unfounded and goes against the trend of integration and opening up the market.
From the above analysis, VCCI proposed to abolish the regulation prohibiting export entrustment to ensure the legitimate business rights of enterprises and the common interests of the Vietnamese rice industry.
