The United States government reportedly will provide part of the funding for a feasibility study for a new port facility in Vietnam that, among other things, would enable the Vietnamese to expand their exports of rice.
Although the amount of funding - $225,000 - is relatively small compared to other federal government outlays, U.S. rice farmers are up in arms about the expenditure to help a country that has become one of the United States' most formidable competitors in the world rice market.
The U.S. Trade and Development Agency awarded the grant for the study of the port facility near Ho Chi Minh City to Lyons Associates of Hawaii. The study is supposed to be completed in one year.
U.S. Rice concerns "Given the current situation of the rice farmer in the United States, I have a very difficult time in understanding the use of American taxpayer money to support infrastructure projects that directly benefit our competition," said Dwight Roberts, chief executive officer for the U.S. Rice Producers Association.
"We work to remove trade sanctions that have never been effective, battle low prices in the marketplace both domestically and internationally and here the federal government is supporting a high-tech processing facility and port in order to increase Vietnamese rice exports."
The U.S. Trade and Development Agency, which is located in Arlington, Va., was created in 1981 in order to advance American business interests abroad.
Ho Chi Minh City (formerly Saigon) is Vietnam's biggest port and handles most of the country's exports of agricultural products. In 1997, the U.S. Trade and Development Agency awarded another feasibility study at a cost of $115,000 to develop a rice export facility in Can Tho Province.
Vietnam's rice exports have grown from about a million tons in 1991 to over 4.5 million tons last year. Due to the increase, Vietnam displaced the United States as the world's second largest exporter three years ago.
U.S. Rice Producers Association leaders are concerned that due to improvements in its infrastructure, Vietnam could not only displace more U.S. rice in its quality markets abroad but also could gain a strong foothold in the U.S. domestic market.
The United States and Vietnam signed an open market trade agreement in July and both countries are expected to ratify it next year. According to published reports, the most significant initial impact of this agreement will be in Vietnam's exports of commodities and manufactured goods to the United States.