Rural Area Picture: Shades of Grey

The data shown at the Workshop has rung the bell for the governors, researchers and those concerned about the issue of three parties “Agriculture-Rural Area-and Farmer” with results such as: the income of a farming household is only nearly VND50,000 per day and 41.5 percent of households are dissatisfied with their life. Previously, a report by Institute of Policies and Strategies for Agriculture and Rural Development (IPSARD) also presented the results from the survey on rural households regarding their resources. In comparison with the latter, CIEM’s survey inclined toward the rural households’ economic features.

 

CIEM’s report also calculated that the income and expenditures of rural households are gradually decreasing and the household poverty rate saw no decline in the period 2010-2012, which means the number of households falling into poverty increases. Accordingly, the average income of a purely farming household is only VND48,618 per day, equating VND1,458,000 per month. Notably, 50 percent of surveyed households have to make loans, mainly with high interest rate (loans from private institutes and bank credit only make up 13 percent). Especially, some remote areas like northern mountain provinces Lao Cai, Dien Bien and Lai Chau lag behind others concerning income, market service access and market linkage. The similar case also happens between ethnic minority groups and Kinh people with the former’s expenditure and decreasing income.

 

Mr Luu Duc Khai, Head of Research Department for Rural Development Policies (CIEM), said: One of the crucial indicators that the research team carefully took into account is the farmer’s land access. According to the survey, up to 6 percent of households have no agricultural land, and this rate has been maintained for years. The percentage of farmers having no land varies among provinces, in which some have worrying rates such as Dak Lak at 9 percent, Long An at 9.4 percent, Dak Nong at 5.8 percent and especially Khanh Hoa with up to 18.4 percent of farming households having no cultivation land. “The percentage of households without cultivation land has increased during the 2010 – 2012 period. However, when comparing the situation of having no land against socio-economic conditions, we found that the better-off households often have no agricultural land, which means they are becoming less dependent on agriculture, but make earnings from non-agriculture sectors,” said Mr Khai.

 

Also according to Mr Khai, the story of farmers having no land is concerning agriculture policy makers. Simply, it is understandable that in the context of relatively underdeveloped real estate market and incomplete ownership of the allocated land (no issuance of red book), farmers have little choice in what animals and crops to raise. Another study direction figured out by Mr Khai is real estate market in the South sees stronger and more dynamic development than in the North. However, land allocation in the South is more unequal than in the North. Meanwhile, the real estate in the Northwest region is of very limited scope with the lowest percentage of land issued with red book among surveyed provinces and sees much difference in investment into land with and without red books of poor households. This is consistent with the judgement that obtaining a red book plays an important role in guaranteeing farmers will make investment.

 

Many experts agreed that Vietnam still sees the large gap in economic development and social welfare between provinces and cities. Households in the mountainous areas, especially the Northwest, are poorer and have fewer chances to access necessary goods like drinkable water and qualified houses. They also have less participation in markets of land, labour and investment into agriculture. In Dien Bien and Lai Chau, there is practically no land trading or rental.

 

Prof. Ass. Dr Le Xuan Ba, Director of CIEM, said that given the current difficult context, regarding macro solutions, agriculture policy makers should seek strategies to increase farmers’ resistance capacity against risk, especially foster application of agriculture insurance; expand land market in rural area because the more easily farmers can trade farm land, the more effectively they can exploit the land.

 

Regarding the aspect of warning, Prof. Finn Tarp (Copenhagen University) commented that: Vietnamese are becoming richer but farmers’ income is decreasing, meaning they have to work hard and take different jobs to overcome difficulties and retain life. This is a risk because once the farmers have to take different jobs, they lose opportunities to increase the scope, better skills in goods production, raise productivity and profit. Meanwhile, they still have to face increasing risks, especially concerning weather, fluctuating input price and incomplete market operation.

 

Focusing on specific measures, Dr Luu Duc Khai said that it’s clear that at present, income from agriculture is shrinking, so it’s challenging to ensure income for farmers. They cannot live on agriculture, which explains their paying back farmland. In addition, given low average area of agriculture land and limited cultivation capacity, it’s impossible for farmers to get rich. Thus, to “rescue” the farmers, Vietnam needs practical measures of restructuring agriculture. Accordingly, resource allocation for agriculture should be engaged to proposal of reformulating economic pattern and allowing the mobilization of elements into this proposal. Considering issue of earning rich, in order to get rich from agriculture, we need changes in rural structure, production level to guarantee that farmers can produce goods and be linked with the market.