MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT

THE 5-YEAR PLAN FOR THE AGRICULTURAL AND RURAL DEVELOPMENT SECTOR
Period 2006 -2010

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INTRODUCTION

In order to implement the Prime Minister's Directive No. 33/2004/CT-TTg dated 23 September 2004 on building the 5-year economic - social development plan for period 2006-2010, the Ministry of Agriculture and Rural Development (MARD) issued Directive No. 52/2004/CT-BNN on 21 October 2004 to instruct Departments of Agriculture and Rural Development of provinces and cities directly controlled by the central government and its units to prepare 5-year plans 2006 – 2010.

By this time, the MARD  has incorporated agriculture and rural development plans of cities and provinces all over the country and those of its units. And on the basis of forecasts on the market for agro-forestry products, scientific and technological advances in the coming years as well as potential resources, the MARD has completed its 5-year plan on agriculture and rural development as presented in the parts below.  

PART I – PRELIMINARY ASSESSEMENT OF SECTOR PERFORMANCE OVER THE LAST PERIOD, 2001-2005

I/ ACHIEVEMENTS

After 4 years of implementing the Resolution of the Communist Party’s Congress No. IX, in spite of many challenges such as natural disasters, including droughts, extreme cold, storms and floods, widespread of the avian influenza, and unfavorable market changes, especially those of the international market, and influence of the war in Iraq, the Communist Party and the Government of Vietnam could maintain their focus on agriculture and rural development, by issuing a lot of new policies to create more motivations mobilizing internal resources, expanding the international cooperation relations, etc. Therefore the agricultural and rural development sector could maintain its remarkable development steps on a wide scale, the most notable of which are:

1. The structure of agriculture and rural economy has been actively moving towards stronger production of valued and profitable agricultural products on the market’s demand.

1.1 The rice growing area has been reduced to increase aquaculture and promote cultivation of other crops of higher value; however, rice growing has been developed for better quality and higher efficiency in close linkage with the market’s requirements. Therefore, though the rice growing area has seen a considerable reduction, the rice yield and production has increased and food security has been assured. 

According to preliminary assessment of provinces, the rice growing area in 2004 continued to reduce by more than 8,000 ha. This area of land is now used for aquaculture and growing other crops of higher value and which have favorable consumption market. Over the 4 recent years, the rice growing area has decreased by 222,000 ha, from 7.666 million ha in 2000 to 7.444 million ha in 2004.

However, thanks to various new varieties of rice which are pest-resistant and supported by fertilizers and other agricultural inputs, including water supplies provided by more effective and efficient irrigation systems, the rice yield has been increased from 42.4 quintals/ha/year in 2000 to 48.2 quintals/ha/year. The rice production continued to increase from 32.5 million tons in 2000 to 35.9 million tons, i.e. an average annual increase of 800,000 tons (2.4%/year increase). The target set up by the Communist party’s congress No. IX, which is to reach the rice output of 34 million tons, was already achieved in 2002. The quality of rice has also been quickly improved to meet demands of the domestic market and export, in particular from 15% in 2000 to 30 – 35% in 2004. Also thanks to higher investment in milling and polishing technologies, the ratio of rice of 0% to 5% quality range has been notably increased from below 10% in 2000 to 30% in 2004.

Due to high demands of materials for animal feed processing, maize production has been developed rapidly as well, from 2 million tons in 2000 to 3.45 million tons as expected for the year 2004, i.e. an average increase of 350,000 tons per year (or 14.35% increase). 

The output of grained crops was increased from 34.5 million tons in 2000 to 39.3 million tons in 2004, i.e. by 1.2 million tons a year (or 3% increased a year). The target of export of 3.5 – 4 million tons of rice per year has been gained while the output has been interruptedly increased, and the national food security has been maintained.

1.2 Production of industrial crops and fruit trees has been aligned with the market’s demand, and many concentration areas of commodity production have been established in close linkage with the processing industry.

Under quite favorable conditions of the market, with strong investment in intensive farming and sound implementation of harvesting technology, most of cultivated area of industrial crops was expanded, and the yield and production were also considerably increased. Compared to 2000, in the year 2004 the area of rubber trees was increased by 39,000 ha (by 9.5%), that of black pepper increased by 23,000 ha (83%), and cashew nut – 86,800 ha (1.44 times). Though the tea market saw some challenges especially in 2003, the area of tea growing was still increased by 31,000 ha in 2004 vs. 2000 (i.e. increased by 35%). Outputs of these crops were increased by 37%, 90%, 3 times and 45%, respectively. Coffee was the only crop that the price in 2002 went down to the lowest level in the last 100 years. The area of coffee growing therefore was reduced in spite of increased export price in 2003. The coffee area in 2004 was 503,000 ha, i.e. reduced by 59,000 ha compared to 2000 (10.5% decrease).

The area of short-term industrial crops was also extended very quickly. That of soybean in 2004 was increased by 58,400 ha (47%) compared to 2000, peanuts – increased by 14,000 ha (5.7%), cotton – 8,000 ha (43.2%). The area of sugarcane however remained at 300,000 ha. Outputs of these crops were also increased by 62.1%, 27%, 57.4% and 5.5%, respectively.

Due to the increasing trend of domestic consumption and export, the area of all fruit trees was extended over the last 4 years. From 565,000 ha in 2000, it increased continuously to 747,800 ha in 2004, i.e. by 182,800 ha. The average increase therefore was about 45,000 ha a year (8%). Many concentration areas of fruit trees have been formed, such as longan gardens in Hung Yen, litchi gardens in Luc Ngan (Bac Giang) and Hai Duong, orange and mandarin gardens in Ha Giang, Tuyen Quang, etc., mangoes in the South East, rambutans in the Mekong river delta, etc. A lot of fruit tree farms and farm clubs have been developed. The pineapple area was increased from 37,000 ha in the year 2000 to 44,000 ha in the year 2004 and is expected to reach 50,000 ha in 2005. Processing factories are also closely working with local provinces to invest in developing material zones for the processing industry.

Vegetable and food crops have also been developed over the last 4 years, from 662,300 ha in the year 2000 to 799,600 ha in the year 2004, i.e. increased by 137,300 ha (20.7%). Models of clean vegetable producing households and cooperatives that provide vegetable of good quality through a network of distribution agents and vegetable shops in big cities appeared to be successful and very effective, with the output valued up to 50 – 100 million VND a year. In some provinces and cities, vegetable are also produced with high technology or technology that does not need land. These products ensure food safety and high quality as well as high productivity, about 7-8 times higher than that of traditionally grown vegetable. For example, cucumber produced under high technology of Hanoi Vegetable Research Centre can provide 240 – 250 quintals/ha, i.e. 8 times higher than the current productivity.

1.3 Animal husbandry continued to develop with high growth rate to meet the increasing domestic consumer’s demand of meat, eggs and milk products.

To meet the increasing demand of meat, eggs and milk products in the country, the animal husbandry sector continued to develop with high growth rate and in a quite comprehensive manner. Large scale animal farms are developed in most areas, which are using industrial methods, good breeds and industrial feed that ensure safety against diseases and rather high efficiency. By this time, in the country there have been 197 animal feed factories with the total capacity of 5.4 million tons. Compared with the year 2001, there have been 71 new factories, adding 2.1 million tons to the total capacity. Along with this increased number are better breeds of animals and stronger veterinary system. These are the reasons why the animal husbandry sector could reach quite good growth rate in spite of widespread occurrence of the avian influenza. The value of the animal husbandry sector in the agricultural structure has been increased from 19.3% in the year 2000 to 22.4% in the year 2004. Compared to the year 2000, the number of pigs was increased by 29.5% in 2004, that of beeves increased by 18.9%, milking cows – 2.2 times, and poultry – 11.3%. 

Thanks to changes in the agricultural production structure that are towards better quality, higher efficiency and responsiveness to the market’s demand, the production value of one ha of agricultural land in the year 2003 reached 19.4 million VND, increased by 2.4 million VND a year compared to the year 2000. This value is expected to reach 22 million VND in 2004, and 25 million VND in 2005. Some models have even brought the production value of 50 million VND/ha/year. In some districts, the production value of 50 million VND/ha/year has been seen in the whole district, such as Cho Moi (An Giang province), Gia Binh (Bac Ninh province), Tu Liem (Hanoi), An Hai (Hai Phong province). That in the entire Mekong river delta is 38 million VND/ha/year, and in the Red river delta

– 37 million VND/ha/year. The agricultural value in the country was increased by 5.1% a year, higher than the target given by the Communist Party’s Congress (4.8%).

1.4 Forestry has made greater contribution to agro-forestry economy. Natural forests have been better protected and restored, while man-made forests have had initial and positive signs of quality and efficiency improvements.

Forestry activities have moved from reliance on state owned agencies to social forestry development with participation of many economic sectors. The forestry sector has seen a lot of strong changes from exploitation, as the major activity in the past, to protection of natural forests and promotion of giving forest lands to people and increasing the sense of ownership of forests. As a result, natural forests were restored quite fast.

Economic afforestation was also strengthened on the basis of new technologies and techniques that bring higher productivity for man-made forests. Exploitation of natural forests therefore has been limited and man-made forests are now greater resources to ensure the domestic demand of wood, as well as the requirements of “socializing” forest protection and development. 

Apart from investment in forest development and restoration-oriented protection, many localities have followed integrated exploitation by combining business with ecological tourism, creating new jobs and increasing income for people doing forestry business.

Restrictions have been imposed on exploitation of natural forests. By this way, only 20 provinces, instead of 36, are still exploiting wood now. The output of wood exploitation in 2005 was reduced to 150,000 m3 a year (equivalent to 6.25% of the forest capability of growth).  Wood exploited from man-made forests accounted for 42.4% of the total wood output in 2001, and was increased to 58% in 2002 and 2003. From 2002 by now, the average output of wood exploited from man-made forests has reached 2 – 2.5 million m3 a year.

Initial steps have been taken to linking afforestation to the market. Forestry development plans are now linked more closely to job creation, improvement of income and living conditions of farmers, and poverty reduction in mountainous areas. The export revenue of forest products was increased from 376 million USD in 2000 to 1,123 million USD in 2004 (3 times higher) and is expected to reach about 1,310 million USD in 2005.

Restoration-oriented protection and restoration-oriented protection for filling of blanks have reached 676,000 ha over the years 2001 – 2004, achieving 70% of the target set for the period from now until year 2010. In 2004, 2.673 million ha of forest land were given to people for their protection, that was 130% of the planned target. 768,000 ha of new concentrated forests were grown in the period 2001 – 2004; tending and maintenance of forest plantations were done on 443,000 ha. The quality of plantations has been improved and some effective forestry farms have appeared. The forest coverage therefore was increased from 34.2% in 2000 to 36.7% in 2004, and is expected to be 37.3% in 2005. 

1.5 Salt production has been improved in terms of productivity and quality to meet the domestic demand and reduce import.

In the recent years, more attention was paid to invest in improving the existing salt fields. Over the last 5 years, 2001 – 2005, 25 projects were initiated in 15 provinces, of which 24 projects invested in improving rural infrastructure in the salt field areas and the last project involved construction of an industrial salt field in Quan The, with the total investment capital of more than 200 billion VND provided by the state budget.

Apart from investment in the existing salt fields to improve their quality and productivity, as well as increase income and enhance living conditions for salt producers, the MARD also closely coordinated with other Ministries and sectors to manage salt importing activities according to the Prime Minister’s decision No. 46/2000/QD-TTg. Therefore, the volume of imported salt was substantially and continuously reduced from 563,000 tons in 2001 to more than 100,000 tons in 2004 – 2005. Other measures were also taken, for example, buying about 10,000 tons of salt a year for national reserves (which have reached 50,000 tons by this time), and buying 70,000 tons for circulation reserves. These measures have contributed to resolving difficulties in salt consumption and ensuring profits for salt producers. 

As reported by provinces, in 2004 there were 14,200 ha of salt fields, reduced by 800 ha compared with the year 2002 (when salt production was very good). However, the production has reached about 820,000 tons, i.e. increased by 220,000 tons compared with the year 2000. The salt quality has also been improved and some industrial factories have bought domestically-produced salt to use as production materials. 

1.6 Agro-forestry product processing industry and rural industries have seen positive developments, especially in processing forest products.

The MARD has instructed its agencies to cooperate with provinces to do studies and apply advanced post-harvest techniques, invest more in the preservation industry to reduce the ratio of loss of rice and paddy products to less than 9%, and reduce that of vegetable and fruits to less than 10%. Investments are also encouraged to do processing of vegetable, bean, and meat products to improve the product quality. Initial investments have also been made to develop processing of coffee, tea, silk, post-sugar and salt products.

The agro-forestry processing industry has received continuous investment, that helped to increase the capacity of vegetable and fruit processing, in particular processing of pineapple to make pineapple juice has been increased by 12,000 tons/year compared to the year 2000, that of beverage increased by 10,000 tons/year, and canned products increased by 8,000 tons/year. Movement and relocation of 3 sugar factories – Tra Vinh, An Khe and KCP (which have daily capacities of 1,500 tons of sugar, 2,000 tons and 2,500 tons, respectively) have been completed. The Gia Lai MDF Fiber Board Factory with the capacity of 54,000 m3/year and Thai Nguyen Particle Board Factory with the capacity of 16,500 m3/year, both using materials from plantations, have been put into operations. 

At present, some agro-forestry processing factories, especially vegetable and fruit processing or sugarcane factories, are facing a lot of difficulties due to lack of materials and low operational efficiency, apart from big pressure due to depreciation, high cost price and low competitiveness. These are common difficulties of the factories during the initial phase of industrialization, which will be overcome gradually to achieve efficiency in operations. Investment in the processing industry is the unavoidable way to quickly and significantly increase the value of agricultural products. This is also a crucial factor to ensure sustainability and efficiency of agricultural product import and export. However, many factories have been working well in far and remote areas, and even become “focal points” of science, research and technology, as well as commercial, cultural and social centers that contribute to job creation and assurance of national security in the mountainous regions.

Rural industries and services, especially traditional handicraft villages, have experienced fast developments over the last 5 years, with the average growth rate of about 11%/year. At present, there are 2,971 villages and 11 groups of jobs involving 1,423 million of households, of which 2,017 villages deal in one of 11 groups of traditional handicrafts and attract 1.35 million workers with the average annual value of 7 to 9 thousand billion dongs. Export revenue of handicraft products has been continuously increased from 235 million USD (in 2001) to 327 million (200), 367 million (in 2003), 450 million USD (in 2004) and expected to be about 600 million USD.

Throughout the country there are about 1.35 million premises dealing in various rural industries of all economic sectors, creating jobs for million people at the average income level of more than 300,000 VND/person/month. This is an important catalyst to promote shifts in the rural labor and economic structure, increase income and create a pre-condition for the agricultural sector to move to commodity production at an increasing scale.

2. The agro-forestry sector has followed the intensive development trend towards improved productivity, quality and efficiency (most of agro-forestry products now have had better quality and higher output).

2.1 Most of crops and animals have gained higher productivity, output and quality, compared to that in the previous years.

New sciences and technologies have been widely applied in agriculture. The new varieties program has appeared to be highly effective and contributed to the increase of agricultural productivity and quality over the last 5 years. So far, more than 90% of rice growing area, 80% of maize growing area, 60% of sugarcane area, cotton, fruit trees, etc. have used new varieties. Compared to the year 2000, the annual rice yield in 2004 was increased by 5.8 quintals/ha, that of maize increased by 7.4 quintals/ha, vegetable – 16 quintals/ha, soybean

– 1.3 quintals/ha, peanut – 3 quintals/ha, sugarcane – 56 quintals/ha, cashew nut – 5 quintals/ha, and so on.

In animal husbandry, new breeds have been used to improve the productivity and quality of meat, egg and milk products. The live weight of pork sold out of farms has been increased by 30 kg per head, on the average. 

In forestry, many new and advanced techniques and technologies have been applied and helped to improve the forest productivity and quality, especially such technologies as selection and creation of new varieties of trees, quick multiplication by cell culture s or cutting. The success rate of plantations has reached 80%, instead of 50% in the past years. In many plantations, the productivity is up to 15 – 20 m3/ha/year.

The output of rice has been increased by 3.4 million tons, maize – 1.45 million tons, vegetable – 2.5 million tons, soybean – 93,000 tons, peanut – 96,000 tons, sugarcane –

0.84 million tons, fresh tea buds – 150,000 tons, rubber – 109,000 tons, and live weight of meat of different types – nearly 600,000 tons. 

2.2 Weights of commodities have increased and become more strongly export-oriented.

The shift in the rural and agricultural economic structure has led to rapid increases of commodity weights in the agricultural sector. The ratio of exported products to total products has been increased to 20% in terms of rice, 95% (coffee), 85% (rubber), 75% (tea), 90% (cashew nut), and 98% (black pepper), etc. 

The value of agricultural production is increased annually by 5.1% on the average, compared to the target of 4.5 – 5%, and the value of products gained from one hectare of agricultural land has been increased from 17.5 million VND in 2000 to 19.4 million VND in 2003, and 22 million VND in 2004.

2.3 There have been positive developments in consumption of agro-forestry commodities, accompanying with strong growth in export.

Export of agro-forestry products continues to be expanded. Some products have earned large market shares in the region and in the world, such as rice, rubber, coffee, black pepper, cashew nut, furniture, etc. The export revenue of agro-forestry products in the 5year period 2001 – 2005 is estimated at 17.5 billion USD, i.e. about 3.5 billion USD a year on the average, and increased by 10% a year. The actual export revenue in 2004 was 4.35 billion USD, more than 1 billion USD higher than that in 2003, i.e. increased by 34%. In particular, the export revenue of forest products was increased quite strongly, reaching

1.123 billion USD, i.e. 1.77 times higher than in 2003.

In addition, the domestic market for agro-forestry products has seen positive changes, and enterprises of all economic sectors have found every measure to develop transportation and circulation of commodity. Provinces and local areas have paid more attention to improve market places, especially those for wholesale. Litchis, longans, plums, pork, etc. are transported to the South, while on the opposite direction to the North are mangoes, dragon fruits, rambutans, etc.

Prices of many agricultural and food products have been increased significantly: the rice price in 2004 was more than 2,000 VND/kg on the average, increased by 50% compared to 2001; the average price of rubber in the whole year 2004 was 19,400 VND/kg, increased by nearly twice compared to 2001. Prices of many other agricultural products, such as cashew nuts, meat, etc. have also gone up remarkably, and helped to improve the farmer’s income.

The Government has issued an incentive policy to encourage enterprises of all economic sectors to sign contracts with farmers on consuming agricultural commodities (Decision No. 80/2002/QD-TTg by the Prime Minister). On this basis, the MARD has coordinated with other ministries, sectors and provinces to vigorously launch an extensive and intensive emulation movement in the entire agricultural sector to develop linkages among 4 stakeholders – the state, scientists, enterprises and farmers. This aims to help in consuming up agricultural commodities for the farmers. So far, enterprises have entered in contracts with farmers to consume more than 50% of the output of commodity rice, 80% of the maize output, 80% of the sugarcane output, 70% of the tea output, coffee, rubber, cashew nut, black pepper, and 80% of the cotton output, etc.

3. Production arrangements in the agro-forestry sector have had new developments.

In implementing Decision No. 65/2003/QD-TTg and Directive No. 11/2004/CT-TTg by the Prime Minister on reorganizing and reforming working arrangements, as well as improving performance of enterprises under the line Ministries, four (4) corporations were reorganized into 2 corporations to increase the capacity. The other two corporations (Sugarcane Corporation, and Silk Corporation are being restructured to facilitate the privatization process). By the end of 2004, 199 enterprises had been valued, of which 191 enterprises had been transformed to shareholding companies (reaching 80% of the planned target); 8 enterprises had been merged/incorporated (88.9% of the planned target); many enterprises had been sold (75% of the planned target), and 2 enterprises had been changed to one-membership limited liability companies.

For state owned agricultural or forestry farms, the MARD has worked with provinces to do review and assessment of their land use situation and production/business activities, and formulate plans on organizing, reforming and developing state owned agro-forestry farms. This provided a basis for the Government to submit to the Politburo for issuing Resolution No. 28 NQ/TW. The MARD has also coordinated with other ministries, sectors and provinces to draft and submit to the Government for issuance two Decrees No. 170/2004/ND-CP and 200/2004/ND-CP on reorganizing and developing state owned agroforestry farms. The Ministry is now guiding provinces and its corporations (general companies) to make plans on reorganizing, renovating or transforming activities of state owned agro-forestry farms according to these two Decrees.

The MARD and provinces have worked to classify and transform existing co-operatives, as well as launch propaganda programs to encourage establishment of new ones. So far, out of 9,069 cooperatives throughout the country, 90% have completed transformation process, and 2,137 new co-operatives have been established under the Cooperative Law.

The household economy has made new development steps, with larger scale, which is based on increased and extended premises of small industries, handicrafts, services and rural side jobs. The farm economy has also increased fast in terms of quantity, and enlarged its scale, as well as invested more in improving productivity, quality and efficiency. Now there are more than 80,000 households doing agricultural production under the form of agricultural farms. Especially large scale animal husbandry farms have been developed in almost every region. Many farms are raising hundreds of sows, thousands of porkers, and tens thousands of chicken or other poultry.

Over the past years, the private sector made strong steps forwards through small and medium enterprises. Many private enterprises have invested in processing rice, cashew nut, tea, coffee, vegetable and fruits, and salt.

4. Rural infrastructure has been strengthened and improved.

The rural socio-economic infrastructure has been improved and developed, especially those for irrigation/drainage, contributing to promoting production and improving the population’s living conditions.

4.1 Irrigation/drainage facilities

a) Water supply and irrigation

Water supply and irrigation have basically met the demands on socio-economic development, including in the agricultural and rural sector. Over the last 5 years, the Government has invested 21,511 billion VND (excluding investment in dykes and embankments), of which 9,874 billion VND managed by the MARD and 11,637 billion VND managed by provinces. Over the same period of time, the Ministry has also invested in constructing 244 facilities, of which 156 facilities have been completed and put into operations, creating more 94,000 irrigated hectares, 146,000 drained hectares, preventing salinity intrusion for more 226,000 hectares, providing bulk water for 206,000 hectares, and improving quality of water supply for 1 million hectares. The total irrigation and drainage capacities by 2005 have reached 8 and 1.7 million ha of cultivated land, respectively.

These efforts were concentrated in the following programs:

.     Rehabilitation and upgrading of existing irrigation/drainage facilities in the Red river delta and northern uplands: these regions developed irrigation/drainage a long time ago, and many facilities were constructed after 1975, having been seriously degraded and needed maintenance and repairs for improvements.

.     Dam/reservoir safety: focus was placed on large reservoirs in the Central Region and Central Highlands. Reservoirs with more than 50 million m3 in capacity and reservoirs with high dams were strengthened and rehabilitated to ensure safety and resistance against floods and storms, as well as assure water supply security, such as Dau Tieng reservoir (Tay Ninh province), Ke Go, Kim Son reservoirs (Ha Tinh province), Nui Coc reservoir (Thai Nguyen province), Yen Lap reservoir (Quang Ninh province).

.     Canal lining: so far 15,000 km of canals all over the country have been strengthened/lined, increasing the irrigation capacity for 350,000 ha and drainage capacity for 400,000 ha. Provinces of Thanh Hoa, Nghe An, Tuyen Quang, Son La, etc. have implemented well the canal lining program on the principle “joint efforts by the central and local levels, by the State and the people”.

.     Investment in capital construction of irrigation facilities: focused was placed on new construction of reservoirs in the Central Region and Central Highlands to reserve water for combating droughts for disadvantaged areas. Examples are Song Sao reservoir (Nghe An province), Nui Ngang reservoir (Quang Ngai province), Van Hoi reservoir (Binh Dinh province), Dong Tron reservoir (Phu Yen province), Suoi Dau reservoir (Khanh Hoa province), Long Song reservoir (Binh Thuan province), IaSoup reservoir (Dak Lak province), and Daklo reservoir (Lam Dong province).

.     In coastal zones: a lot of sluices were constructed to prevent salinity and keep fresh water, e.g. Song Nghen sluice (Ha Tinh province), Thao Long sluice (Thua Thien Hue province), Duy Thanh sluice (Quang Nam province). Many large and multipurpose irrigation projects were also initiated, such as Phan Ri – Phan Thiet project (Binh Thuan province), Phuoc Hoa (Binh Duong province), Dinh Binh (Binh Dinh province), Ta Trach (Thua Thien Hue province), Cua Dat (Thanh Hoa province), etc.

.     In the Mekong river delta: many programs were implemented for flood control, fresh water keeping, acidity leaching. More than 20 flood control facilities were completed in the Long Xuyen quadrangle area and the Plain of Reeds, where embankments and culverts in deep flooded areas were strengthened, and new embankments were constructed in shallow flooded areas to protect orchards and short term industrial trees. The coastal water resources development programs were promoted through financial assistance of the World Bank in Omon – Xano, Quan Lo

– Phung Hiep, South Mang Thit, where keeping fresh water were linked with aquaculture in saline and brackish water, as well as development of aquaculture in the flood season.

b) Dyke protection and flood control

Over the last 5 year period, 2001 – 2005, 896 billion VND managed by the MARD were invested to rehabilitate dyke systems in 19 provinces in the North, Northern Central Coast, and support a part of similar efforts in the central coastal provinces. The amount of excavation and earthfill works were more than 10 million m3, and 880,000 m3 of rock were used to construct bank protection works. The state’s finance for dyke maintenance was 197 billion VND. Minor repairs of dykes and bank protection works were done, requiring 1.4 million m3 of soil and 13,700 m3 of rock, respectively. As a result, the dyke system in the North and Northern Central Coast has been strengthened and upgraded over the last 5 years. A more remarkable achievement was that this dyke system was maintained throughout the period of 34 years by that time. The flood control program in the Mekong river delta has successfully launched its short term phase, which gained initial encouraging results and ensured 2 reliable rice crops a year (spring and summer crops). The program also contributed to development of new rural appearance in flooded areas and reduced losses of life and property caused by floods.

However, there were some overlaps in responsibilities and duties of various Ministries and sectors involving in water resources exploitation and management, especially between the MARD and MONRE.

4.2 Rural water supply and sanitation programs

Rural water supply and sanitation programs were effectively executed in many provinces by joint efforts of the MARD and the provinces, thanks to financial assistance from international organizations, contributions from local budgets and the public, and thanks to renovated management and utilization of public water supply facilities (which became the people’s responsibility).

To create conditions for many rural residents to have access to clean water supply for their domestic use, the Prime Minister issued Decision No. 62/2004/QD-TTg on 16 April 2004 regarding credits for implementing the national strategy on rural water supply and sanitation. The maximum credit level for each type of facilities was set to be 4 million VND per household. 

As a result, over the last 5 years, more 1.6 – 2 million people had access to water supply every year, which increased the rural water supply coverage from 42% in 2000 to 62% in 2005.

4.3 Other infrastructure systems

Other infrastructure systems in rural areas, such as transport, power supply, have also been improved. So far, 98% of rural communes have had automobile roads to their centers and more than 90% of the communes have had power supply.

5. There have been strong developments in rural areas, the people’s life has been improved, and poverty reduction has been promoted.

Rural economy has achieved significant development, with the average agricultural growth rate of 5%/year; rural industries and services have developed quite well, especially the agro-forestry and marine product processing industry has grown at 11 – 12% a year in the recent years.

Infrastructure in many rural areas have been improved, irrigation schemes have been able to irrigate 90% of the rice cultivation area. Tens thousands of subsidiary crops, industrial crops and fruit trees have been grown, the dyke system has been strengthened. So far, 98% of communes have had automobile roads linked to the centers. More than 90% of the communes have had access to power supply, 58% of rural population have had domestic water supply, 99% of the communes have had health care stations, and 100% of the communes are now in the service area of national television. 

Production relations have stepped forwards to develop household economy, farm economy, reformed cooperative economy and state owned enterprises; encourage private economy and establish agriculture with participation of multiple economic sectors.

Farmer’s living conditions in most of rural areas have been visibly improved, with the average income increased from 11 million VND per household in 2000 to 14 million VND per household in 2004. The poverty rate was reduced from 19% in 2000 to less than 8% in 2004. Housing, travel, learning and health care conditions have been all improved.

Many villages and communes have been recognized as “cultural villages, communes” with developed economy, where ecological environment is protected, traditional typical cultural features are restored and developed, and the people’s knowledge is enhanced.

6. Administrative reform and human resources training have been promoted for agricultural and rural sector

Administrative reform has been promoted over the recent time and shown positive results, firstly in implementation of the state management function, advising on dealing with macro-level governance, issuance of policies to overcome difficulties in production and consumption of agricultural products, mobilization of resources for agricultural development.

The actual process of dealing with natural disasters (droughts, floods, forest fire), avian influenza, foot and mouth diseases, and pests in crops has shown clear and significant improvements in the sense of responsibility and executive capacity of the entire management system.

Administrative reform has been implemented simultaneously and brought about initial good results in 4 areas: institutional reform, organizational reform, human resources development and public administration reform. Some issues in these areas were put under very active and regular programs, such as one-stop-shop program, application of ISO standards in administrative works, application of information technology in executive works by the MARD, etc. 

Coordination with agricultural universities/colleges under the Ministry of Education and Training has been strengthened and at the same time, efforts have been made to increase capacity of universities under the MARD. Post-graduate training has also been linked more closely with focal research programs and agricultural extension activities; and short term vocational training for farmers, especially the rural young laborers, has been strongly promoted. In the 5 years 2001 – 2005, we had 286 new doctors, 1,362 masters, 19,896 students graduating from universities/colleges and high schools, 45,100 students graduating from professional tertiary schools, 75,450 technical workers graduating from long-term training programs, 58,800 others graduating from short term programs and 4,000 incumbent officers participating in capacity building programs.

Major reasons for the above achievements

The Communist Party and Government have always paid attention to agricultural and rural sector, and issued many new policies to conform to the reality and the people’s desires. Close and regular guidance from the Government has helped to take many measures to timely resolve difficulties and challenges, giving assurance for development of production. Other reasons include active and effective support from Ministries and sectors and close guidance from party committees and authorities of various levels, in addition to the unit-level initiatives and determination to overcome difficulties as well as enormous efforts from farmers all over the country.

There have been complete and simultaneous impacts of many mechanisms and reform policies towards market orientations and increased investment by the Government in agricultural and rural development. These policies include in particular: cooperative economy reform; state owned enterprises reform; private and individual economy encouragement; encouragement and creation of conditions for shifting the agricultural and rural economic structure in linkage with the market and towards higher productivity, quality and efficiency; prioritized investment in science and research to bring breakthroughs and increase competitiveness of Vietnam’s agricultural products and develop rural infrastructure; trade promotion and international economic integration.

Many advanced techniques and technologies have been applied. So far, more than 90% of rice growing area, 80% of maize area, 60% of sugarcane area, cotton, fruit trees, etc. have used new varieties. In animal husbandry, new breeds have also been used and helped to increase significantly the productivity and quality of meat, eggs and milk products. In forestry, many new technical advances have been applied, especially the techniques of quick selection and creation of new varieties, and quick multiplication by cutting and cell culture  techniques. As a result, the productivity and quality of forest plantations have got extensive improvements. Salt production by clean technology has been extended to wider scale. Many provinces in the Mekong river delta have used the method of intensive farming that reduces the cost price to 600 – 700 VND/kg in some places. The agricultural extension system is working effectively, instructing farmers on how to apply the measures of “3 increases – 3 reductions” in the south and “2 reductions – 3 increases” in the north. Mechanization, new farming techniques, harvesting/preservation and processing techniques for agro-forestry products have been used widely and extensively, and new side jobs have also been developed.

The Government has invested a lot in irrigation/drainage schemes as well as rural infrastructure and services. Over the 5 years 2001 – 2005, the Government spent 21,511 billion VND in irrigation/drainage facilities, creating more 94,000 irrigated hectares, 146,000 drained hectares, preventing salinity intrusion for more 226,000 hectares, providing bulk water for 206,000 hectares, and improving quality of water supply for 1 million hectares. These are all the favorable conditions for reclaiming virgin lands, increasing the cropping intensity, improving productivity and quality of agricultural products. 

II/ WEAKNESSES AND REASONS

However, there are a number of issues that the agricultural and rural sector is facing, such as:

1.   Slow progress in restructuring the agricultural sector and rural economy. Slow development of the breeding, industry and rural sectors.

While most of the regions have clearly defined their direction in restructuring the process of agricultural production and rural economy, certain regions are still puzzled. The delta regions focus mostly on rice cultivation, while horticulture remains dispersed and in most of the cases it is developed spontaneously. The breeding sector progresses slowly, while the forestry sector has not been able to contribute appropriately to the regional economic development. The processing industry of agricultural and forestry products, as well as services in the rural areas have not created strong changes regarding job creation and revenue’s increase for the farmers. Agricultural production in highland and remote areas has not yet registered a significant development.

Agricultural production continues to be the major component of the rural economy (65%), in which cultivation represents 78% and breeding occupies only 22%.

2.   Low productivity, quality and efficiency of certain agricultural products, as well as a weak competitiveness of agricultural products.

The research and science-technology transfer process is yet to be accelerated. In certain sectors, there is no technological breakthrough in order to increase the productivity and the quality of products, such as tea, mulberry trees, vegetables and certain fruit trees, breeding... In other sectors, new technologies have been introduced. However, the transfer process takes place very slowly. The productivity and the quality of many agricultural products remain low and the competitiveness is weak such as: sugar canes, many vegetables and breeding products...

The establishment of the quality control system for agricultural products and agricultural materials was slow. In addition, the problem of excessive residues of pesticide and antibiotics in agricultural products is so serious and urgent that needs to be resolved promptly.

3.   The infrastructure investments have not yet met the demand of the agricultural and rural sector’s restructuring process; the infrastructure in many regions are still poor.

The development of infrastructure in many rural areas has not yet met the demand of the economic restructuring process, in order to ameliorate the quality of life of the population, especially those in mountainous regions (particularly transportation, irrigation and telecommunication infrastructure).

A large volume of investment has been put in irrigation/drainage, however, these resources have been used inefficiently and managed poorly. Consequently, existing irrigation schemes can only use up to approximately 70% of their designed capacity. Irrigation projects that serve production in certain areas remain inefficient, and the percentage of irrigated area is still low: 65% in the Central coastal areas, 49% in the Northern mountainous areas, 20% in the Central Highlands, and 54% in the South East region.

357 communes have not yet possessed automobile roads to their central areas, and 38% of the rural population have not yet disposed of clean water for their daily living...

The investment structure has been adjusted very slowly to cope with the development needs of the new economic structure. With regards to investment for development, according to the data on the real volume of investment, investment for irrigation projects continues to occupy over 50%; investment for other categories of infrastructure, for enhancing science and technology resources as well as for training related to agriculture and forestry represents less than 50%. Due to the need of finishing incomplete schemes, investment in irrigation still heavily concentrates on irrigation and drainage facilities for rice cultivation.Within the five-year period 2001-2005, investment has been put only in about 20 irrigation projects for industrial plantation and horticulture, accounting for merely 3% of the total investment on irrigation.

4.   The production relations in the agricultural and rural sector evolve slowly.

The process of changing the operational mode and conducting PR campaigns on establishment of new co-operatives according to the Co-operative Law is slow, although the Central Party Committee’s Session IX has issued the Resolution No. V and the Government has issued various policies aiming to ease the process. Many regions are still puzzled in the process. The implementation of the Resolution 28 of the Central Party Committee and the Government’s Decree on agricultural and forestry co-operatives was very slow.

Although there have been significant developments in the last two years in the renovation and re-organization process to improve the effectiveness of the operation of state-owned enterprises by equitizing (privatizing), selling, contracting and leasing operations, the MARD has not yet met the target set forth by the Government. It is expected that the Ministry will achieve over 60% of this plan. State-owned enterprises have not yet fulfilled their mid-wife role in assisting and creating necessary conditions for the  development of the household economy. 

The development of rural industries, small industries, handicrafts, side jobs and services evolves slowly, and therefore, has not been able to generate a strong change in the rural labor structure so as to create the opportunity for household agricultural production to dispose of more land and extend their production scale. The private sector has not yet been able to gather the necessary momentum for development. 

5.   The rural sector progresses slowly, the income remains low, the living condition of certain groups of farmers have not yet been ameliorated, particularly in the mountainous areas; the gap between the rich and the poor is widening and job demand is more and more increasing.

Although the living conditions in most rural areas have been improved, in certain areas, further improvement is still needed. The disparity in terms of income and living conditions between the rural and urban areas, as well as amongst the regions, has been reduced but remains significant (in 1998 the disparity ration was 3.26 times, in 2002 it was reduced to

2.2 times). Job demand is increasingly high and the environment pollution is becoming more and more problematic, and yet no remedies have been applied in order to overcome these. The occupational time in the rural areas reaches only approximately 75%, and there are about 1 millions new jobs on the average created every year. These factors further increase the pressure on job creation for the rural areas, especially jobs for the young population.

The causes of this weakness are:

(1)        From an objective point of view, this weakness are due to a low point of departure of our economy, combined with the limited resources of the State and the population.

The restructuring process in the agricultural production and rural economy was conducted in the context where the departure level of the Vietnamese economy is low, particularly that of the rural areas. The agricultural sector in one hand, has to produce material goods, and on the other hand, has to resolve social problems, and many of the household farmers’ production is just for the sake of meeting their consumption needs. 

On the other hand, the restructuring of the agricultural production needs to follow biological rules, especially perennial crops and cattle will need a long time to grow and bring benefits. 

Due to a geographical location that is characterized by a tropical and semi-tropical climat, Vietnam has to face many natural calamities, floods, draughts, pest and epidemic diseases, which have a significant impacts on the agricultural, forestry and halophyte production; while the capacity and the resources for preventing and countervailing these impacts are limited. 

(2) From a subjective point of view, 

1.                   - Given the lack of awareness of and the superficial understanding about the need for a continuous development of the agricultural and rural sector toward industrialization and modernization of a group of official and Party members, and of certain sectors and local entities, there are insufficient directions and lack of an appropriate and competent policy framework that permit the realization of the set forth objectives. In many local entities, there exists the mentality of self-indulgence and laxation.

2.                   - A number of policies that need to be brought into conformity with the needs of the restructuring process of the agricultural and rural area have not been adjusted. The agricultural production is facing a harsh competition in the market economy context and it should also be taken into account the the biological characteristics of the sector. Nevertheless, no additional studies on introduction of new policies aiming at generating the motivation for the sector’s growth were carried out. For example, there is a lack of credit policies encouraging the investment on the creation of regions specialized in the production of raw materials, processing industries; integration and export policies, policies aiming at assisting and encouraging the development of private economic sector in the rural areas, particularly of small and medium enterprises...

-The development of science and technology is slow and is not really attached to the production, which impedes the creation of the break-through in the productivity, quality and effectiveness of the restructuring process of the agricultural production. The network of agriculture, forestry and labor extension in local entities is still weak and there is a lack of technicians able to conduct science and technological transfer in order to better serve the restructuring the agricultural production and rural economy.

- The infrastructure is under developed, non-uniform, and not able to respond to the needs of the agricultural goods production and restructuring of the rural economy, particularly the transportation and irrigation systems in resource zones.

-The sector has to face the requirements of the industrialization and modernization process, and the rapid development of science and technology, but the majority of the human resources are not trained, and the ratio of the labor force in the rural areas that have professional training is merely 22%.

- The organizational management and direction is not up-to-date, many regions are still puzzled with regards to the content of the restructuring process on the agricultural and rural areas. The content of developing the rural area toward modernization and industrialization is not yet clear and the assignment of responsibilities among the Ministries, sectors is unclear and uncoordinated.

The State has issued many directives and policies but they have not been implemented correctly. Plan adjustments have not been carried out timely and there is usually a lack of mechanisms, policies, directions and surveillance on the realization of this plan, which has led to a situation where enterprises lack raw materials or do not have the capacity to develop raw material resources and are obliged to change their location.

The organizational and managerial system from the Ministries to the provinces and cities is inconsistent, which causes negative impacts on the operational management in the sector, especially in the area of prevention and fight against natural calamities, epidemic diseases, resource management... and has undermined the enforcement and the effectiveness of the State management mechanism. The competency and the educational level of governmental and local officers do not respond to the high demand of the market economy system which is in the process of further integration into the world economy. 

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