Tuesday, 23/1/2018
Current restructure of Vietnamese agriculture
15/4/2014 21:30' Send Print
Prof. , Ph.D. Vuong Dinh Hue. Member of the Party Central Committee. Chairman of the Central Economic Commission. Photo: Vietnam News Agency

Practices, limitations and constraints in agricultural development of Viet Nam since renovation

Economic policies after the 6th Congress of the Party ushered in profound changes in economic structure and agricultural institution and organization, with recognition that farmer household is a fundamental production unit of agriculture and rural market relation development. The strategy on food production development based on exploiting to the maximum production potential to meet national consumption needs and expand export has resulted in continuous and stable agricultural growth in several decades (1) and food security and made important contribution to poverty reduction, turning Viet Nam into one of the largest exporters of agricultural products (2). Agriculture has constantly grown and developed for more than 20 years. However, the growth is slowing down (3) and there are limitations for agriculture to become a good administered sector with modern technology, sustainable development, high competitiveness and high added values.

Structural transition within agriculture has been slow. Cultivation accounts for a large proportion (4) with less changes in the past 5 years. Agricultural growth derives mainly from expansion of production areas and use of resources and production force with limited scientific and technological applications and market regulation, low production effectiveness and environmental instability. Productivity of agricultural labor is low (5). Post-harvest loss is remarkable and higher than in several regional countries. During the 2006 - 2008 period, according to the World Bank (WB), added value/agricultural labor/year of Viet Nam was much lower than those of regional countries including economically less-developed ones (6) thus profits of farmers, particularly in rice production are less stable and lower for some products.

On production organization, no large production areas with modern administration, close association between agricultural, industrial processing, service planning and supporting policies were established. Regional linkage in agricultural production among provinces and within one province is poor. Economic cooperation and linkage models in agricultural production have not lived up to expectations and are less effective. Association between farmers and businesses is weak and not sustainable. Agricultural, industrial and service linkage is very limited in both space and commodity chain. Farmers’ economic cooperatives are weak and fail to serve as linkage between farmers and businesses thus farmers’ subjectivity is restricted.

As far as market is concerned, prices of Viet Nam’s agricultural products are always lower than those of other countries due to poor quality, un-processed farm products, poor trade service and no trademark. Viet Nam has not had commodity chain strong enough to compete in trademark, food security and quality (7).

As food security is ensured by maintaining large areas under rice production and due to slow change in plan structure, growth has been slow. Some of the land, water source and labor can be used for growing other plants to achieve higher efficiency and higher profits. In many regions, agriculture is no longer the key to poor households’ livelihood. Farmers can hardly participate in effective agricultural production because of high investment, inaccessibility to production material, particularly in remote and ethnic minority regions. Though farmers’ income has increased by 2.8 times more than that of 2008, it still falls short of demands and income structure is not appropriate (8).

The development and achievements of agriculture in the past period were at the expense of environment degradation which caused negative impacts on the stability of agricultural systems themselves. Productivity in several areas has decreased. There is even the danger of production inability. There is no ecological and environmental administration in agriculture which results in less sustainability. Plans on agricultural production are not concrete, frequently change and fail to win confidence of investors.

Challenges and contradictions that need to be solved in the process of agricultural restructure in Viet Nam

Challenges and contradictions between objectives of building a contingent of modern and professional farmer with low income of current agricultural laborers have become more prominent. Due to low income in agriculture sector while there are opportunities for better jobs in industry, service and labor export sectors, young people do not want to work in agricultural sector. Statistics show a high proportion in rural labor force and a strong shift in labor structure with the majority is middle-aged or elderly people. Those who are staying on in the rural areas do not only engage in economic activities but also assume social functions such as taking care of children, ill people and the elderly people. Non-agricultural income accounts for an increasingly higher proportion in the total income of peasant households (9). Thus, if agriculture production is still small-scale with decreasing per product income, agricultural income will be gradually lower than other jobs and rural labor force will move out of agriculture. Since 2005, some farmers have returned land to local authorities and land have been left fallow. These cases have risen in provinces in the Red River Delta and the Central of Viet Nam (10). In that context, the building of the contingent of modern and professional farmer in line with the Resolution 26-NQ/TW on agriculture, farmers and rural areas will meet with difficulties and obstacles.

Challenges and contradictions between the demands to develop a modern, large-scale, competitive agriculture with high added values and scattered land areas suitable only to small-scale production. In the first stage of renovation, land policies conformed to labor force and management of small households and thus generated a breakthrough in agricultural development. The first breakthrough was Resolution 10 which helped set up new production relations suitable to the low level of the production force at that time. After more than 20 years, especially after 5-year-implementation of the Resolution 26-NQ/TW on agriculture, farmer and rural areas, the agricultural production force has become stronger in both scale and technical and administrative levels. The role of agriculture and the market relations have changed considerably while agricultural production relations in general and land policies in agriculture in particular have seen less changes since Resolution 10 and gradually become an obstacle to the demand for large-scale, modern and competitive agricultural development in many regions throughout the country. Small-scale and scattered cultivable land has resulted in high cost in mechanized production, especially when farmers have to buy services from private providers in several production stages. Due to small-scale and scattered cultivable land, it is difficult to establish sustainable concentrated commodity production areas and large-scale farm economy. Professionally managed farm economy has not taken shape even in areas with enabling environment. The role and comparative advantages of large-scale economy have not been promoted. Production cost, quality control cost and commercial transaction cost in agriculture sector have been higher than in many countries. Farmers’ income is still low. International competitiveness is limited.

Challenges, contradictions between high demands for investment capital for modernization of agriculture with low effectiveness of investment in agriculture, high risks and uninterestingness. It is difficult to attract non-state-budget investment capital and FDI (11) in agricultural production due to the following reasons: 1- Low investment effectiveness and high risks; 2- Unsafe investment in agriculture as duration for land allocation is short and unstable land use plans which are of low legal status.

Focus objectives in agricultural restructure

Focus should be given to build a modern, effective and environment-friendly agriculture with high added values, effective use of resources, close association with global value chain which generate jobs, high income for farmers and ensure food security and social stability.

The restructure objectives also aim at a close, effective, harmonious and rational linkage between industry, services and agriculture, between urban and rural areas and between the working class and farmers in industrialization and modernization of the country.

The restructure aims to create changes in production relation with development which are appropriate to the development of the production force in agriculture and maximize the role of the State in investment, resource allocation, land management, public service provision, commodity chain and administration in agriculture to help farmers and businesses become subjects and driving force in investment and production development.

Some reminders in agricultural restructure

First, restructure of agricultural production space

In each region of the country, agriculture has different comparative advantages, functions, and economic, social, ecological and environmental role. That is why, it is necessary to establish several agricultural production models suitable for different regions. The restructure process should clarify mechanisms, policies and strategies to develop appropriate production model for each region.

Region with modern and large-scale concentrated agricultural commodity development: This is large-scale and modern production region which uses the most modern standards in agricultural production and administration to create added values in economy, well-administered and strong commercial chain, good trademarks and high added values. This model can be implemented in: 1- Regions with sufficient conditions for modern agricultural development such as decrease in agricultural labor and low agricultural proportion and regions which are strongly industrialized and urbanized like Hai Duong, Hung Yen, Vinh Phuc, Bac Ninh and Dong Nai provinces, Hai Phong, Ha Noi, Ho Chi Minh cities…; 2- Regions which are not strongly industrialized and urbanized but have high agricultural comparative edge and important export products and where industrialization of agriculture is a driving force to locally economic development. Attention should be given to develop part of agriculture into large-scale modern and concentrated branches such as coffee and tea in the Central Highlands, forestry and tea in some northern mountainous provinces, milch cows in Son La province, aquatic products and rice in the Mekong River Delta…; 3- In regions having difficulties in cultivation, low level of industrialization and urbanization but abundant high quality labor, it is necessary to develop large-scale and concentrated agriculture which uses less land, but needs a large amount of high quality labour such as large-scale animal husbandry and high-tech agriculture. Central provinces like Nghe An, Ha Tinh, Quang Binh and Quang Tri fall in this category.

In these localities, plans on large-scale production areas with land management should be developed. Here, policies on agricultural development should be modernized. Infrastructure, production management and food security management should follow highest international standards. Farm products should meet requirements of large and hard-to-please importers to supply domestic market with competitive products of high food security. This is a region with agricultural growth model based on large-scale economy where agricultural products are made en mass without taking into consideration speciality and competitiveness in terms of price, business trademark, large-scale and en mass production and low cost. In this region, large-scale farm household economy plays the leading role and closely associates with businesses to form a close-knit chain with high specialization, transparent administration, state and public monitoring of finance and quality control.

Region with ecological and natural agricultural development: In mountainous and coastal regions, agriculture has economic and ecological functions. It is necessary to build a model of agricultural development with strict ecological management and less intensive cultivation. Production models can be animal husbandry in household gardens and forests, honey bee breeding and forestation, aquaculture in ecological reserves and brackish water forest, less-intensive agricultural and forestry cultivation and organic rice production. It is ecological value which constitutes the most important factor to create added value, images and trademarks of products for agricultural growth and farmers’ higher income. Ecologically branded products have higher prices than ordinary products. They are given priority in circulation by developed countries which compensate restrictions in production scale, intensity and productivity. This model is most suited to coastal areas for aquaculture such as in Thua Thien - Hue, Ca Mau, Tra Vinh, Soc Trang, Kien Giang and Quang Ninh provinces and Cat Ba district of Hai Phong city, or mountainous areas in the North and Central Highlands for cultivation and animal husbandry.

Region with geographical indication agricultural development: Regions where quality of agricultural products have specific qualities attributable to the ecological system and local culture and clearly differentiate from products of the same kinds in other regions can be developed into geographical indication production region (12). This model boasts high comparative edge, added values and income of individual producers and businesses which derive from their local specific characteristics. On the other hand, goods with geographical indications have great commercial advantages through bilateral and multilateral protected geographical indications and place of origin agreement (13) and can be associated with ecological agricultural tourism which can create local comprehensive values.

Experiences of other countries and Viet Nam show that speciality production regions often link to poor household livelihood and ethnic minority areas, this model is a good approach for rural development in difficult regions. Production scale can be large but more often it is small-scale and diversified in goods quality with higher food security and specialized quality. Many products such as alcohol, meat, milk, wheat, tea and coffee of many countries have applied this model which yield a turnover of hundreds of billions of US dollars.

Region with agricultural development in association with national security and defense: In many areas including border areas, islands and difficult areas inhabited by ethnic minority people agricultural production does not only aim at economic purposes but also for social stability and security and national defense. The model of agricultural production organization with strong support from the State in terms of public services according the market economy should be studied and built. Following mechanisms and policies should be developed: 1- Plans on areas inhabited by ethnic minority people particularly in the Central Highlands, Northwestern area, islands and border areas which are difficult to integrate in the market economy; 2- Build agricultural production system in combination with ecological production and geographical indication models if possible with strong support from the public service network; 3- Build commodity chains to bring products from these regions to market; 4- Issue mechanisms, policies, institutionalization on production models, and population organization on the basis of resettlement in agricultural production organization, processing, trade and social organization. Income of this region can be generated from the sale of agricultural products, assistance from the Government for poverty reduction, assistance for forest production and cultural and spiritual tourism. Production models can vary from private and public businesses to community organization in close coordination with the Ministry of National Defense and the Ministry of Public Security. In many areas, border stations can join the communities in production and social organizations to ensure that the army live with people and rely on people in production and safeguard the country.

Region with small-scale farmer household production: This is the most common model at present and will remain for a long time to come in many areas because people still live mainly on agricultural production. This production model will gradually decrease in terms of scope, areas and number of farmer not by administrative measures but due to the implementation of economic solutions to create new jobs for farmers. To help small-scale production households participate in the market and increase income, the following measures are recommended: 1- Form markets for farmers to sell their products directly in certain areas for more income; 2- Support small-scale family household processing, direct sale of products or assist product distribution; 3- Assist the formation of cooperatives and associations linking input and output markets and product advertisement. In this region, the State should issue policies to attract industrial and service investment in a suitable scale, give priority to export of labour or create non-agricultural jobs in industrial and service areas for them while reducing labour from agriculture.

Region with industrial and agricultural production and services provision: The State should developed national, regional and provincial master plans on networks of industry-agriculture-service clusters. This is in realization of the Resolution 26-NQ/TW of the 10th Party Central Committee on settlement of relations between industry and agriculture and between urban and rural areas. Based on the network of commodity channels, plans on warehouse and commodity transaction, logistics, packaging, processing, trade and international transaction platforms should be developed. Assistance is to be given to distributors and businesses in terms of credit, access to land and business administration. Investment methods can be public-private partnership or foreign direct investment and other social investment forms to develop commodity commercial channels. Large hub of large commodity channels can be developed into industry-agriculture-service clusters which will connect with key agricultural production regions. These clusters can include large commodity branch such as rice, aquatic products, coffee, cashew nut, pork and milk in big production regions such as the Central Highlands, Southeastern region, the Mekong River Delta and the Red River Delta. Assistance is to also be given to develop and multiply the model of processing commercial and traditional agricultural clusters which are existing in many regions and localities.

Second, restructure agricultural commodity chains

Restructure agricultural, forestry and fishing production: To issue policies on flexible use of rice acreage while ensuring food security and reducing rice acreage to facilitate growing of other plans appropriate to conditions and advantage of each region (growing grass for milch cow raising, corn, soya bean, dragon fruit, flower and vegetable…) without changing fundamentally rice land characteristics. Thus, the structure of agricultural products should be changed giving priority to increasing values of other cultivable plants which have comparative advantages and higher added values such us milch cow raising, vegetable, flower and fruit trees. Each region should have priority plans for products having comparative edge to accelerate restructure not only in productivity but also in value and income of people (14). However, to implement this change, particularly when regions with high productivity such as maize, soya bean and dragon fruit are just formed, it is necessary to proactively plan and organize production, processing, marketing to avoid spontaneous production.

Restructure of added value division in commodity branch: To have mechanisms and policies to strengthen production stages which add values to agricultural, forestry and aquaculture such as processing, logistic services, packaging, especially processing into food and end-use commodities like household utensils, and commodities for industrial production… Priority should be given, first of all, to commodities of comparative edge of Viet Nam namely coffee, rubber, cashew nut, cacao, pepper, aquatic products, forestry processing products, milk and meat. To call for investment from foreign and Vietnamese businesses because they have trademarks and distribution channels to attract processing, packaging and logistics from foreign countries to Viet Nam. To limit licenses to foreign invested projects which do not have end-use commodity processing inside Viet Nam. To have priority policies on land allocation, tax and credit to businesses inside and outside Viet Nam which process end-use commodities. For small and speciality commodities, to encourage small-scale processing and packaging in local industrial-agricultural cluster and family households. To call for investment from inside and outside countries to form clusters of processing industry and services for internationally agricultural, forestry and aquaculture in the condition of integration to turn Viet Nam into an international hub of agricultural processing and service.

Third, restructure of agricultural producers:

In agricultural restructure, the quantity and quality of the following factors should be increased:

- To increase the quantity and quality of large-scale agricultural farms with professional and modern administration. In strongly industrialized and urbanized areas where labour force has considerably withdrawn from agriculture, the State should introduce gradually policies to limit small-scale production, encourage land concentration and accumulation in keeping with the Law on Land (revised) to form large-scale farms. Mechanisms and policies should be promulgated in line with production scale (15), standards and norms required in international trade and resources and environment management.

- Retructure policies should promote the development of new-type agricultural production cooperatives which involve farmers of the same crafts to enhance scale, scientific and technical applications, joint investment, product quality management, product supply to market, material procurement and input services. Priority should be given to large-scale, export and specialized commodity production cooperatives with combined commercial chains such as cooperatives associated with animal husbandry, coffee growing, cattle fish rearing, flower growing and rice production farms. The role of cooperatives should be promoted to join businesses in establishing trade chain (16), consolidate commodity associations among them the farm cooperatives which grow coffee, tea, sugar, rice and raise milch cows and pigs should play a worthy and important role especially in large commodity production region. In regions with small-scale farmer household commodity production, cooperatives which provide general services should be developed. In autarkical regions, community organization should be encouraged. For service cooperatives, policies should be developed to help them become important factor in supplying agricultural services and focal points to receive and provide public services in communities such as extension work, credit, marketing assistance, quality control, vegetable protection control, forest protection and water surface management.

Policies should be developed to plan networks of agricultural businesses and industrial and agricultural clusters in different fields and regions for inclusion of farmers, external connection and implementation of deep processing, services and logistics. Some models of linkage have proved to be successful such as milk production of Vinamilk in Ba Vi, sugar production in Lam Son, “large-scale field” for rice production of the An Giang vegetable protection Stock Company and joint investment in rubber growing in three northern provinces. It is necessary to early implement Decision 62/2013/QD-TTg dated 25 October, 2013 of Prime Minister on policies to encourage cooperative economy, joint production, consumption of agricultural products and building large-scale field (in replacement of Decision 80/2002/QD-TTg of Prime Minister on “4 types of people”). Priority is given to joint investment in production, processing and trade; production by common technical processes to turn out similar products of the same quality; build joint plans for all commodity chains; joint trademark administration; whole commodity chains of the same administration of origin tracking and product quality; risk sharing and sharing of added values and profits. Policy assistance should promote and provide preferential treatment to the establishment and development of linking factors as a deriving force for linkage among farmers and between farmers and businesses. The aims are to turn out lower cost products due to economic scale and better quality control thanks to collective actions, higher competitiveness and supply of stable and reliable products of the same quality to market.

Solutions to be considered while restructuring agriculture

Firstly, mechanism and policies on land

It is necessary to concentrate and accumulate land of sufficient scale which is sustainable and suitable to different production models of each region towards a modern agriculture. Implement land planning by region. Study mechanisms, planning policies and management of land planning by 7 socio-economic regions or 8 ecological regions, ensure regional development strategies and overcome constraints of economic space which come as a result of current administrative division. Link other fields such as industry and service to agriculture and between agricultural aspects within a region. To realize restructure, it is necessary to complete new policies on land:

- Promulgate mechanisms and policies which clarify legal basis of farmer household, especially large-scale farm economic household and rights and interests in land use, land acquisition, use of land use right in inheritance, credit loans, participation in joint venture and linkage and stock contribution.

- Plan agricultural land in a stable and comprehensive manner so that together with plans on service, scientific and technological organization, trade and processing industry, they become agro-industrial clusters.

- Allocate land to farmers for long-term use from 50 to 70 years; in stable agricultural regions, land allocation can be long-term.

- Plan large-scale/household production, accelerate land accumulation and concentration to develop the large-scale concentrated modern agricultural model in strongly industrialized and urbanized region where labour force has withdrawn considerably from agriculture. The State should carry out pilot planning of modern and separate agricultural regions as large as hundred to thousands of hectares to establish large-scale economic farms of modern standards in production, management and trade. Take measures to mobilize farmers to voluntarily “merge land and exchange fields”, accumulate and concentrate land into “large-scale field”. Accelerate land concentration and linkage among farmers as well as farmers and businesses.

- Regulations are to be set up to recognize farmer household as production unit and farm economy with clear definition and identification of farmers who can receive land and non-farmers whose land will be taken back or receive compensation according to the Law on Land. This land will be allocated to farmers who directly and continuously work in agriculture. Restrictions will be applied to those cases where farmers, agricultural and forestry companies have land use rights but do not directly involve in production and rent out their land.

Secondly, mechanisms and policies on investment in agriculture and assistance to farmers.

- Establish investment funds for agriculture giving priority to agricultural restructure. These funds can support project and investment credit to localities, businesses and even farmer households based on approved agricultural plans. In agricultural investment funds, state management should be separated from investment fund management. Biddings will be organized for agricultural investment fund as in market mechanisms which will encourage farmers households and businesses to follow modern agricultural production conditions and State priorities. Call for international financial assistance to these funds.

- Investment from domestic businesses should be encouraged to develop modern agricultural chain associated with farmers, form linkage chain between farmers and businesses, build sustainable administration throughout the chain of quality, food security, logistics and trademarks.

- Study to grant preferential income tax rate to processing enterprises which use 100 percent of domestic agricultural raw material.

- Develop policies on loans to establish modern farms which can give their land, machinery, equipment and contracts as security. Study to change fundamentally lending methods, from mainly lending using security and the land use certificate as asset to lending with security as production equipment and production and business projects.

- Study to gradually replace current indirect assistance mechanisms through businesses (such as the mechanism to buy rice for temporary reserve) with policy which directly assist farmers in proportion with each household’s total input investment.

- Study to implement the model “future price market” for some key agricultural products to regulate market risks from producers to trading companies.

- Continue to pilot insurance in agriculture according to Decision 315/QD-TTg dated 01 March, 2011 of the Prime Minister, review and draw lessons to officially expand agricultural insurance to targets, commodities beyond poor and near poor households.

- Study, supplement and revise assistant policy to minimize post-harvest loss for agricultural and aquaculture.

Thirdly, mechanism and policy on agricultural commodity chain development.

- Develop mechanism and policy to encourage Vietnamese businesses to directly distribute their products in international supermarket chains, diversify products and markets, promote investment in high value production stages, high quality and limit raw material import. For domestic market, strengthen market control through quality transparency, origin tracking and intellectual property.

- Form close-knit mechanisms and policies from production to market for each group of commodities, link to each region, market and production target to support development of diversified value chain (common product chain, high value product chain, ecological product chain, equal commercial product chain, geographic indication and speciality product chain and sustainable development product chain). Form strategic commodity chains with market locations, strong international linkage, global trademarks, high profile in some target markets and high socio-economic influence.

- Develop mechanisms and policies to restructure added value to each stage of the whole chain towards higher proportion on the Vietnamese territory, of farmers, of science and technology, of trademark, of quality improvement and of good administration.

- Develop mechanisms and policies for transparency, transaction control of quality and prices of agricultural raw material inputs such as fertilizer, animal feed, trade of domestic agricultural products and import such as milk, meat and rice to regulate value added, tax, quality control by origin and agricultural insurance.

- Renovate import and export regulation mechanisms to be more transparent and equal with good administration of agricultural commodity chains, identify clearly the role of the State, local administrations, professional associations of businesses and farmers. Complete commodity associations and unions (coffee, cacao, rice, tea and cashew nuts) so that they play a worthy role in import and export regulation.

- For rice: institutionalize and develop policies to upgrade rice value chain in specialized regions with the participation of farmers and policies to support agents in value chain from rice production to sale and export. In the model “large-scale field”, difficulties in farmer linkage (cooperatives and cooperative groups) should be removed. Businesses should link with farmers through the form of contracts on agricultural products. Master plan on rice sector should be drawn up with two major different but supplementary objectives: large-scale commodity production and small-scale production for self-consumption or sale in local community. Study to replace or supplement economic contracts by investment contracts between the Government with rice import countries, contributing to enhance Viet Nam’s role, linking importers with production regions, reduced intermediaries and increase prices for rice producers.

Fourthly, mechanisms and policies on comprehensive renovation of management system and public service in agriculture.

Review and complete the state management system in agriculture from Central to local levels on the basis of appropriate assignment and delegation and clear identification of functions, tasks and responsibilities of the heads. Ensure transparency, strict control of quality and prices of agricultural material inputs, diseases and food hygiene and security.

Fundamental changes should be made in agriculture sector in functions and content to move from mainly service supply to projection, regulation, management, supervision, assessment, assistance to agricultural production activities, market, quality control, legal service and trade competition. Public services should develop into service market. Public service companies would better provide public services in areas, fields and aspects where market does not offer and leading areas, leaving other areas for private and professional organizations. Free and transparent biddings can be organized for public service fund.

With the household economy as a driving force, Viet Nam’s agricultural sector has made outstanding development, ensured food security and developed extensively through intensive farming and acreage expansion and productivity increase. Strengthen scientific and technological advances and reorganize agricultural production through cooperatives and joint organizations, establish associations and unions, cooperative groups and cooperatives with widespread participation of businesses to create new driving force for increasing added value and sustainable development of agriculture of Viet Nam in the coming period./.

This article is published in Communist Review, No 854 (December 2013)

Notes:

(1) The value of cultivation and aquaculture per acreage unit in 2013 was estimated at 85.6 million dong/ha, an increase of 81 percent as compared with 2008 (47.2 million dong/ha).

(2) Agricultural, forestry and aquatic product export in 2014 is estimated at US$ 27.5 billion, during the period of 2008 - 2012 it increased averagely 13.3 percent per year.

(3) Share of agricultural, forestry and aquatic product value in GDP increased averagely: in the period of 1996 - 2000: 4.01 percent/year, in the period of 2001 -2005: 3.83 percent, in the period of 2006 - 2010: 3.03 percent, and in the period of 2009 - 2013: 2.9 percent.

(4) In the agriculture sector, animal husbandry decreased from 27.1 percent in 2009 to 24.6 percent in 2012; cultivation increased from 71.3 percent to 73.8 percent. In the structure of agriculture, forestry and aquaculture, agriculture proportion decreased from 78.5 percent in 2009 to 77.5 percent in 2013 and aquatic products increased slightly from 17.8 percent to 19.2 percent.

(5) In 2008, according to the World Bank, labour productivity (US$/labour/year) was as follows: Viet Nam: 848.652; China: 1.596, 423; Indonesia: 1.779,410; Philippines: 2.010,964; Thailand: 2.152,126.

(6) Average added value/agricultural labour/year in 2006-2008 (US$) of Viet Nam: 343, Cambodia: 377, Bangladesh: 403, China: 481, Thailand: 681.

(7) In the period 2006 - 2008, according to the WB, Viet Nam was a country with the highest number of food import declination by the US among countries under survey, over each turnover of US$ 10 million: Viet Nam: 25,4; Indonesia: 18,4; China: 13,3; Mexico 12; Thailand: 7,6; Colombia: 3; Costa Rica: 1,5; Chile: 1,1.

(8) According to the survey of the Institute of Policy and Strategy for Agricultural and Rural Development in 6 western provinces of the Mekong River Delta in 2008 on poor household income: 76 percent of income come from working as hired labour; only 14 percent from cultivation, aquaculture, animal husbandry the remaining came from non-agriculture activities and assistance. Real income of poor households: 52 percent of poor household had income under 150,000 dong/person/month, 16 percent from 151,000 to 170,000 dong; 29 percent from 171,000 to 200,000 dong and 3 percent from 201,000 - 270,000 dong.

(9) A study of the Institute of Policy and Strategy for Agricultural and Rural Development in 2007 showed that average non-agricultural income of farmer household in 2005 was already 50.5 percent as compared with 31.5 percent in 2003.

(10) According to a report of the Ministry of Agriculture and Rural Development, by November 2013, 3,407 households in 9 provinces returned 443.15 ha and 42,785 households in 21 provinces left fallow 6,883.92 ha of land.

(11) According to the General Statistics Office, in 2008, FDI in agriculture accounted for 3 percent. It accounted for 2 percent in the period of 2009 - 2011 and 0.6 percent by 2012. Farmers started to desert land and reduce agricultural production in many places, particularly in intensive rice cultivation in the North and Central of Viet Nam. Investment in agriculture, forestry and aquatic production accounted for 5.2 percent of the total social investment in 2012.

(12) Geographical indications (GI) are sign used on certain products having origins from specific regions, localities, territories with protected geographical indications given on commodities, commodity packages and businesses tools.

(13) Commodities exported to countries of the European Union granted with protected geographical indications will have better commercial values and will be protected by these countries against fake products or violations of intellectual property.

(14) 1) The mountainous mid-land in the north: the large-scale forestry raw material region with milch cow raising, cow, pig and chicken raising and maize growing in Son La, tea in Thai Nguyen, Phu Tho and Tuyen Quang, bamboo in Cao Bang and specialities with GI such as vegetable and flowers in Sa Pa, plum in Tam Hoa, litchi in Luc Ngan, chestnut in Trung Khanh, cold water fish in Sa Pa, cinamon in Lang Son, and chicken in Yen The…; 2) The Red River Delta can grow products of comparative advantage such as high quality rice and speciality rice, vegetable, fruit trees including longan and litchi, milch cow, aquatic products, grass for milch cows; 3) Central of Viet Nam: forestry raw material region for forestry product processing, sea product cultivation on sea water, island and large-scale animal raising farms; 4) The Central Highlands: specializing in industrial and fruit trees (coffee, cacao, pepper and avocado), specializing on forestry in Gia Lai, Kon Tum and Dac Lac province, vegetable and flower in Da Lat, tea in Lam Dong; 5) The southeastern region: rubber, cashew nut, concentrated animal raising (pig and poultry); 6) The Mekong River Delta: specializing in growing rice, maize, fruit trees, aquatic products for export, water-birds, ecological agriculture associated with exploitation and protection of mangrove forest in Ca Mau, Kien Giang and Bac Lieu provinces.

(15) The larger the production scale, the stricter the criteria on farm administration in financial transparency, production process, quality control, environment pollution, disease prevention process and agricultural insurance. These criteria should conform to international standards and gradually be internationally recognized.

(16) According to the Vietnam Cooperative Alliance and the University of Economics in 2011, by the end of 2010 in the agricultural field, most of the cooperatives provide comprehensive agricultural services (former cooperatives which were transformed according to law and are located mainly from Quang Binh to the north. They accounted for 7,000 out of 8,000 cooperatives in agricultural sector at present. Meanwhile, new-type and specialised cooperatives have been set up slowly. Through out the country, 80 percent of the total cooperatives provide water irrigation service; 43 percent provide material and fertilizer supply; 97 percent provide technical transfer service; 11 percent provide electricity service; 53 percent provide seed supply; 20 percent provide mechanical land preparation service and 11 percent provide veterinary service. Major services provided by these cooperatives are mainly input services of public services. Only few cooperatives assist farmers join collective actions in production investment, product quality control, procurement of input material, trade negotiation, joint supply of products to market and control of commodity trademarks. This situation shows that community service cooperatives account for a large part in the north and the central of Viet Nam due to small-scale production and historical development of cooperatives. In the south of Viet Nam like the Central Highlands and the Mekong River Delta, private sectors have proved to be more effective in providing these services.

Vuong Dinh HueProf. Ph.D., member of the Party Central Committee Chairman of the Central Economic Commission