First, exporting enterprises often buy rice from local traders or assemblers so they have no direct control over the price farmers receive. Second, there can be large differences in production costs within each of the eight regions, particularly in relation to land lease fees and loan interest rates. Consequently, the target price based on the average will benefit some and disadvantage others. Finally, MOF/MARD are often late in determining production costs, which is supposed to be given at the beginning of each crop season (MARD, 2014b). However, the impact of this was to increase farm gate prices by only VND 100-200 kg (less than USD 0.01 kg). To improve the effectiveness of these policies, MARD is drafting a new policy on paddy/rice procurement in which subsidised loans will be provided to both farmers and enterprises who signed contracts to buy paddy from farmers.