Facing New Challenges

The agricultural and rural area of Vietnam now accounts for 70 percent of the population, 57 percent of labourers and 20 percent of GDP. The current national and international economic context is setting new challenges for “Tam nong” (Agriculture, Farmers and Rural area) Strategy in Vietnam.

 

A statistic released by the Department of Cooperatives, Ministry of Agriculture and Rural Development in 2008 demonstrated that after deducting all input costs, income per capita of farmers was only VND 5,500 per day. In 2010, the Department of Cooperatives and Rural Development revealed further statistics: in the agriculture sector, most are small economic households (36 percent with less than 0.2 hectares), economic farms only account for only 0.1 percent of total households; over 54 percent of cooperatives had weak or medium operations; there were few agricultural enterprises; standards of farmers’ life is low (in 2008, rural area only accounted for 60 percent of the national average, household poverty rate was 16.2 percent; and the wealth disparity was high (13.5 folds).

 

If household poverty is defined as those with average income lower than VND 400,000/person/month as applied for Rural Area in 2010, this rating would include the real income of most Vietnamese farmers. Given such outstanding problems with living standards in a long time, too low income of farmers compared to the society, the Party, Assembly and Government have determined the “tam nong” issue (agriculture, farmers and rural area) as a national strategic issue. When farmers are unable to live on their fields, the current situation of having 30 percent of farmers leaving their land to seek more earning is unavoidable. According to Dr To Duy Hop, Institute of Sociology, there are up to 10 urgent insolvable social issues in innovation of agriculture, farmers and rural area in the past 20 years, which are: wealth disparity and social inequality; lack of jobs, spontaneous migration; increasing social conflict; people and authority’s intellectual training; weak health care and medicine services; degraded cultural life; social management capacity, low infrastructure; and alarming environmental pollution.

 

Actually, farmers in highland areas such as Ha Giang and Cao Bang still cultivate by scraping soil into protected hollows to plant corn, mechanical workshops still have to conduct studies to manufacture small motorized equipment (seeding machines, ploughs, etc) suitable for fields from 1,000 to 360 square meters, and over 90 percent of farmers in Vietnam still depend solely on nature.

 

On the other hand, after drastic measures by the Government, the rate of paddy land being converted into industrial zones, golf courts and service facilities has slowed down. Besides, a stubborn problem detected years ago still continues, of low investment in agriculture and weak agricultural management. Mr Tang Minh Loc, Deputy Manager of Department of Cooperatives and Rural Development, citing a report of Ministry of Finance, stated that investment into agriculture and rural development was estimated to meet 17 percent of demand and account for only 8.7 percent of total investment.

 

In a press interview in late 2011, Mr Cao Duc Phat, Minister of Agriculture and Rural Development commented that Vietnam handled an important problem of ensuring food hygiene and safety and developing some world leading plant and export products like coffee, cashew nuts, pepper, food products and rubber. However, in general, agricultural productivity, quality and efficiency remain much lower than in other countries. In some underdeveloped regions, farmers still face difficult lives, lacking food or have corn but no rice; lacking drinking water and basic public services, etc.

 

In reality, farmers are playing a sideline role in industrialization and modernization, and always have to run after the market. Social welfare receiving rate is too low, since farmers account for 70 percent of population but only 25 percent of investment in education and health care.

 

The resolution of the 7^th session meeting of Central Committee X concerning agriculture, farmers and rural area (Resolution 26-NQ/TW - NQ 26) has been actually the basis for settlement of “Tam nong” in Vietnam since 2009. The governmental budget estimate for this sector in 2011 is 2.2 times higher than 2008, with funding for agriculture and rural areas as a percentage of the national budget increasing from 32.8 percent in 2008 to 39.8 percent in 2011. In three years from 2009-2011, total investment into agriculture-rural area reached nearly VND 290,000 billion, accounting for 52 percent of total development investment from National Budget and Governmental Bond. In the Conference finalizing 3 years of implementation of Resolution 26 on the “Tam nong” issue, in addition to data of funding agriculture, rural area and farmers, Prime Minister Nguyen Tan Dung considered that 13 over 14 criteria of Resolution 26 were met; growth rate of GDP in period 2006-2010 was 3.36 percent per year on average, higher than the target of 3.2 percent per year; total export turnover of agriculture, forestry and fishery in 2010 reached US$19.53 billion, increasing by US$3.46 billion against 2008, exceeding by 81 percent the target of US$10.8 billion set by Party Meeting X; and industry and services accounted for approximately 60 percent of rural economic structure.

 

The international context of globalization, food crisis, climate change, unexpected result of Doha negotiations and national conditions of mass industrialization, implementation of commitments in the agenda of joining WTO have strongly impacted agriculture, rural areas and farmers with new arising challenges. Firstly, exhausted land and human resource are outdated compared to the requirements; escalating agricultural input costs over output price; decreasing agricultural competitiveness; conflict between demand for high quality human resource and the majority of farmers being unable to adapt to new production conditions; climate change possibly reducing food productivity causes risk of hunger in some regions, slowing poverty reduction in difficult, remote areas, and causing further difficulty for those suffering disasters, and ethnic minorities.

 

Mr Le Huy Ngo, Former Minister of Agriculture and Rural Development supposed that the effective way to handle the “tam nong” issue was to face challenges and focus on tackling tough issues, including: re-planning land use; agricultural modernization, promoting agricultural growth; raising productivity per land unit; clearly identifying objects of market economy in the rural area; developing new rural areas, allocating and shifting rural labour; improving investment policy with priority given to three major fields of developing new rural area, modernizing agriculture and practicing social equality for farmers. Concerning the official orientation of Ministry of Agriculture and Rural Development, Mr Cao Duc Phat said that, instead of relying on external resources, development of new rural models will promote internal creativeness and capacity of rural communities. The Ministry will have a master package, in which farmers are considered the core and motivation of development and settlement of the current “tam nong” issue.