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PRESENT SITUATION AND DEVELOPMENT DIRECTION

OF VIETNAM AGRICULTURE

 

NGUYEN THIEN LUAN
Deputy Minister of Agriculture and Rural Development

Vietnam is situated in South East Asia in the Indochinese Peninsula, lasting from 8.45-23.22 latitude and between 102.08 and 109.30 longitude.

            The natural area is 330,990 square kilometres, in which arable area is 7,348.5 thousand hectares, equals 22.2% of natural area. Population density is 214 person/km2 (1993).

            Vietnam lies in the region of monsoon, tropical weather with a high temperature of 7500oC/year, rainfall volume of 1800-2000mm/year and is not evenly distributed among the months of the year. Versatile and various climates of the regions create a variety of vegetation and domestic animals (originated in the temperate area, sub-tropical and tropical areas). The bad thing of climate is drought in the dry-season and floods and storms in the rainy season. The Vietnam climate is of 2 zones, 6 regions and 19 sub-regions of agricultural climate.

            Vietnam has 13 main soil groups, in which the largest group is red-yellow soil, 15.8 million hectares. Red-yellow humous in the mountains of 2.97 million hectares, alluvium soil of 2.93 million hectares, grey soil of 2.48 million hectares, alum of 2.14 million hectares, salted soil of 0,99 million hectares (Institute of Agriculture Planning and Design).

            Present situation of using land: according to the data of the General Department of land, 1993:

            + In 33,099,093 ha of natural land, there are 7,348,449 ha of agricultural land (annual arable land of 5,523,899 ha, long term plan: 1,247,161 ha, meadowland for husbandry: 304,274 ha and water surface for agriculture: 273,115 ha).

            + Land used for forestry is 9,641,142 ha (29.13% of natural land) of which planted forest of 779,438 ha and natural forest of 8,841,704 ha.

            + Specialized land of 1,117,697 ha, equals to 3,3% of natural land area.

            + Inhabitant land: 773,960 ha, equals to 23% of natural land area

            + Virgin land: 14,217,845 ha, or 42.95% of natural land area.

            (unused level land: 1,074,700 ha, unused highly and mountainous land: 10,403,790 ha, unused water surface land: 205,740 ha, river and spring area: 646,910 ha, bare rocky mountain: 963,660ha, other unused land: 924,040 ha).

            During the period of 1980 to 1993, agricultural land increased only 395,450 ha. Annual plant area decreased by 475,200ha, long term plant area increased by 682,000ha, meadow area for husbandry increased by 32,000ha, water surface used for agriculture increased by 155,700 ha,

            Forest land decreased by 2,911,000 ha. Forest planted land within 13 years increased from 477,000ha in 1980 to 799,400 ha in 1993.

            Specialize land and inhabitant land increased by 441,660 ha.

            The whole country has 11,478,000 ha of bald hills and empty land, which need measures of investment and improvement in order to bring high effect to economy society and ecological environment.

Vietnam is one of the countries rich in water source corresponding to the rainfall volume of 1800-2000 mm/year. . The surface water of VN reaches to 132 billion cubic metres (excluding foreign water of 132.8 billion metres). At present, VN used 37 billion cubic metres (12% of surface flow and 35% underground current).

Agricultural production during the past years has reached good and large results. The food production not only guarantees domestic consumption but also exports 1,5 million tons/year on the average from 1989 to 1994.

            Together with food,  VN agriculture also built specialized zones for coffee, rubber tree, tee, mulberry, cashewc. Turned them to be zones to produce goods of large scale and value. In 1994, area of rubber trees reaches to 242,500 ha, output reached 96,900tons of dry latex, more than 2.76 folds of rubber area and 2.36 folds of output in 1980. Area of coffee is 130,000ha, output of 130,500 tons of coffee kernel (area increased 5.7 folds and output of 15.4 folds compared to them in1980). Area of tea reached to 68,400ha, output was 39,000tons of dry bud tea, area increased 1,45 folds, output increased 1.86 folds compared to data of 1980. Area of coconut is 207,600ha, output of 1,207,000 tons, increased 3,02 folds in area and 3,88 folds in output compared to them in 1980. Total value of export agricultural products in 1992 reached to 827.6 million USD, increased of 5.4% per year on the average of period of 1989-1992. Increased 5.4% per year

            Sea-products in the period of 1986 – 1993 has a development rate of 8.3% per year and output was 6.5% per year. Exportation value of sea-products in 1993 reached to 380 million USD, equals to 14% of total export turnover of the whole nation.

            However, so far Vietnamfs economy is still classified as one of the under developed countries in the World. Gross Domestic Product (GDP) average in 1993 was only 242 USD/person. Production infrastructure, social understructure is still poor and backward. Agricultural production is mainly manual with small scale and low capacity, The yields of crops and animals are only 60 – 70% of other countries in the region. Market for exporting agricultural products is not stable. Price of export agricultural products only equals to  60 – 70% of average export price of other countries in the same region. Deforestation speed is fast, covering rated of the whole nation is 29%. At present, there are still 10 million hectare of bare hill and empty land, which is eroded, washed, affecting badly to ecological environment

            The rate of population development is still high, average of 2.2% per year in the country. In rural areas this ratio is higher and this is a big difficulty in economic development.

            Agricultural land per person is becoming less and less, in 1980 it was 1,310m2/person but in 1993, it was 1.035 m2/person only.

            In order to develop agriculture and foodstuff industry in coming years, Vietnam should follow the main directions as below:

           

1/ Innovation of structures of agricultural economy and structure of rural economy:

            The structure of agricultural economy will be changed according to versatile production in conformity with conditions of various ecological zones at the same time, urging food production and development of husbandry and planting to higher speed to create specialized cultivation with high output. And the rural economic structure will also be changed industrially and rural survices, especially agricultural products processing attached to abundant agricultural product source to guarantee full consumption produced by the peasants, jobs and revenue for the peasants.

            Food production is still playing an important role to get 30,000,000 tons in 2000, guaranteeing safety for national provision, satisfying human needs, husbandry needs and export ( 1.5 – 2 million tons/year). Intensive farming continues and application of new rice seeds is made to reach the average output of 4tons/hectare a crop.

            Enlarging the area of corn, especially hybrid corn, to get the average output of 3tons/hectare, improving the treasure system, technology post-harvest and rice processing, especially rice for exportation.

            Developing husbandry, pigs, and cattle and poultry. Changing the method of raising animals, applying biological technology, combining traditional husbandry with industrial husbandry with the new hybrid strains to make the high yield and good quality. Improving processing industry of animal food and meat and milk, improving the product quality to respond to domestic needs and export. How to reach 2 million tons/year in which 100,000tons/year for exportation. Husbandry output will occupy 35 –40% of total value of industrial branch.

            Vegetable, industrial plants as coffee, tea rubber, sugar cane, mulberry, cottonc all will be developed both in area, output, capacity and export.

            It is necessary to build new processing facilities, in which small and medium scale in the country combining with large scale, concentrated with modern equipment and technology to compete with other products on the market.

Enterprises of processing agricultural products should guarantee their ratio of processing industrially from 60% to 90 – 95%. Industrial out put should reach 40 – 45% compared to total agricultural value. In 1994, 38% was reached and it will be possible to reach 40% in 1996.

 

            2/ Developing all economic elements in the countryside:

 All of people, enterprises, economic class are equal in the law. All legal trading activities, serving national welfare, even the enterprises, joint with foreign countries and enterprises with 100% foreign capital are all appreciated. Releasing all obligations towards peasantfs family economy. Making each peasantfs family  area independent economic unit. As for the cooperatives, the principle of willing, democracy, mutual benefit and service activities must be guaranteed. The state-run agriculture business will also be transferred to service activities, technical transferring, product processing and consumption.

 

3/ Strict realisation of land act (amended)

This Act state clearly the right and obligations of the land user, guaranteeing the long-term use of land, the decision to produce which plant to bring highly economic effect on the land, the right to transfer, inherit, rent mortgage. Tax for land usage is also fixed so that the land-user fell safe to engage in production

 

            4/ Enhancing the work of scientific study and technology transfer:

Receive and apply quickly new scientific achievements and technology, especially the latest biological achievements and technology in agricultural production and processing industry of the countries in the region and in the world in order to increasing the rate of productivity of planted trees and domestic animals, increasing the rate of production, improving the quantity of product and the capacity of labour.

            Realizing the 19 programs in promoting rice, corn, soybean, sugar-cane, cotton, rubber, coffee, tea, fruit trees, mulberry, raising pig, cattle, poultry, producing product of biological organic fertilizer and microorganism fertilizer to increase the output of plants, supplementary feed for animals and poultry, prevent and killing disease caused by insects which harm plants, veterinary, farming mechanics and process of agricultural products.

 

            5/ Enlarging the consumption market for agricultural product

            As economy developing level average annual revenue of the people will increase by

4 – 5%, consumer market of agricultural products will be larger. Opening the circulation of goods among the regions in the nation and allowing more market for exporting agricultural products. Maintain and develop traditional markets and finding out new markets, find and build long-tern stable markets for major commodities such as rice, rubber, coffee, tea, vegetable and fruit, mulberry, meatc Using new plants and animals to produce high quantity products, modernizing the processing industries, packing, decreasing the finish price in other to increase quantity and competition in the domestic and foreign markets.

 

6/ Policy of investment and credit:

            During the past 3 years, thanks to activities of production of every element of economy GDP has increased by7% per year. Since 1991, there has been accumulation (exceeding GDP over consumption). In 1993, the level of accumulation has reached 10% GDP and during the years to come, it is possible to exceed 20% and 30% GDP. In spite of this, domestic capital is not enough for the need of the investment and development. Vietnam requires supporting capital from ODA capital of other countries and direct investment capital from foreign countries (FDI)

The government will enhance adequately the budget including ODA capital for the development of agriculture and the countryside, mainly concentrating investment capital to build infrastructure society (irrigation, roads, electric, community), population distribution, building new economic zones, resettlement, clearance, afforestration, training cadres, studying scientific technology, farming promotion, culture program, education, rural heath program and for same industrial branches that create basic source of raw materials for agriculture as fertilizer chemicalc

            Mobilizing capital from all economic classes, especially direct investment capital from aboard (FDI) is very important for the production development. At the rate of investment in the whole country 20%/year. The foreign investment capital occupied 60% over total needs of investment, in which FDI occupied 40% and ODA 20%.

            The mobilisation of FDI capital is carried out according to the investment law of Vietnam and provisions under these laws which are more and more nearly perfect in order to improve the environment of investment further. The enterprises joint venture with foreigners or enterprises having 100% foreign capital in agricultural fields and in the countryside will enjoy favourable conditions, much more than those reserved for urban projects.

            About Credits

            Rural credits must be widely developed, exploiting every source and form of credit in other to support peasants, increasing the loaning families. The Government offers credits to poor peasants, peasants in the mountain and minorities in order to develop production, eradicate hunger and reduce poverty. Encouraging credit cooperatives, Joint Stock Banks in rural areas founded by the peasant and other economic factors in order to mobilize capital and offers peasants loans in order to develop production, trading and services.

 

7/ Enlarging international cooperation and investment:

Nowadays as well as in the future, the international cooperation and foreign investment has an important meaning for the development of agriculture and foodstuff industry.

Every initiative and effort to enlarge international and investment in these fields are appreciated and encouraged.

Especially cooperation among the countries in the region is given much attention. Thanks for the similar economic and social features, natural condition and plants; cooperation is favourable for growth.            

            For more than 4 years, some the time when the Investment Laws were born, more than 100 projects of direct investment from aboard (joint venture enterprises having 100% foreign capital) in agriculture, foodstuff industry and marine products with total investment capital amounting to over 900million USD, in which nearly 500million USD is licensed legal capital. In spite of this, Vietnam is opening her arms to welcome foreign investors to Vietnam to cooperate and invest in agriculture and foodstuff Industry.
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