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I. Agricultural production situation in 2001

In conference implementing 2002 plan of agricultural sector organized in Hanoi on 31/10/2001, the year 2001 is considered a hard year for agricultural sector: natural disasters consequences last year that have not been totally solved have followed by the next difficulties from draught and flood this year. Up to now, 54 districts and towns in Mekong River Delta have long been submerged under flood. in addition, provinces in the Central area after mid-year draught are now facing a big flood. Prices of most main agricultural products including rice, coffee reduce about 2.8% (paddy price even goes down under VND 1000/kg) while prices of agricultural materials increase from 1.7% to 3.4%; making consumption ever difficult, reducing income of both farmers and processing firms.

In face of those difficulties, the projected agricultural growth rate of 4.5% in 2001 can be considered a great success of the sector. Crop production is on upward trend, especially maize production increases by 100000 tons and its area rises by 20000 ha. Cultivation area of different kinds of bean and annual industrial crops such as sugar cane, cotton, mulberry, peanut and etc increases by thousands of ha. Number of cows is up to 7150 million, an increase of 125000 heads. Number of pig is 800000 higher than last year while number of poultry is 220 million. Totally, livestock production gains 2 million tons of live weight and 60000 tons of milk. Processing industry experience a growth rate of 11%, the highest level among other sub sector in agriculture. Export turnover is forecast at USD 2.4-2.6 billion, falling short of the plan of USD 3 billion although export volume of meat, fruit and vegetable and forestry products remains rising.

Agricultural growth rate can be mush higher if prices of main products such as rice and coffee have not undergone great reduction. Rice export volume may still achieve the set plan of 3.5-3.7 million tons while its turnover is only 91% as high as 2000. Also due to price reduction, coffee export value gets only 75.8% in comparison with the last year level. Although great efforts to temporarily stock 1 million tons of rice and to temporarily stock and reduce coffee plantation area have got certain success, rice and coffee prices can not be improved as expected. In comparison export value of the last year, that of rubber this year is only 96.4%, tea: 67.5%; cashew: 78.9% and 55.5%; despite great increase in export volume. And the livestock growth rate also experiences the reduction of 7% compared to last year.

II. Plan for 2002:

In 2002, paddy cultivation area will be 7.3 million ha with the output of 32.5 million tons. Maize cultivation area will be improved from 750 thousand ha in 2001 to 800 thousand ha in 2002 through increasing crop density in mountainous areas; transforming a part of less-effective paddy land into land for maize production in summer-autumn crop and winter crop; using new varieties and intensive farming practices to gain the output of 2.5 million tons. Cotton area will be expanded to 35 thousand ha in Central Highland, Central Coast and Mekong River Delta. Production of soybean, peanut, tobacco, mulberry will also be improved with the area of soybean increasing from 130 thousand ha to 155 thousand ha, peanut: from 250 thousand ha to 255 thousand ha; tobacco: from 25 thousand ha to 30 thousand ha; mulberry: from 12.5 thousand ha to 15 thousand ha. Vegetable and fruit are planned to be main exporting commodities with the 2002 export value of USD 400 million, an increase of USD 100 million over 2001 level. Vegetable area in 2001 will be 500 thousand ha (up to 11% over 2001) with the output of 7 million tons (14% higher than 2001). Pig raising is improved serving domestic consumption and international markets through developing household production and large-farm production; using high-quality varieties; applying technical process matching markets' demand; establishing new internationally standardized processing firms in order to export 50 thousand tons of pork in 2002. More attention will be paid to milky cow production, increasing milky cow heads to over 50 thousand. High-productivity varieties especially eucalyptus, exotic Acaccia are imported and selected to develop forestry plantation, to prepare material zones for paper processors and man-made board producers in the future. Forestry processing is supported to increase forestry export turnover from USD 350 million in 2001 to USD 400 million in 2002 to turn forestry sector into the main export sector, making great contribution to the agricultural development. Clean water is provided to about 5 million people, increasing the rate of rural people getting access to clean water from 46% to 50% in 2002.

In the Conference, Prime Minister Phan Van Khai raised a question why it is necessary to transform economic structure, especially agricultural economic structure. At present, export volume of many agricultural commodities is increasing while their value is decreasing, encouraging the agricultural sector to rearrange its production for effectively exploitating natural resources, mobilizing fund, grasping markets' opportunities to produce high-productivity and high-quality products with low production costs to improve their competitiveness in domestic and the world markets. These will result in high income per unit and entailing higher income for farmers.

Although the period of 1990-2000 has experienced the increase of 1 million tons of paddy each year, what we should strive now is more sustainable agriculture with higher productivity and higher quality. Prime Minister Phan Van Khai is appreciating positive achievements in agricultural structure transformation even at low pace. Tropical agricultural sector of Vietnam enjoys many advantages in developing fruit trees, vegetable and livestock serving export activities. On this occasion, the Prime Minister also iterated the need to develop close linkage between production and market, overcoming the division among production, assembling, processing and consumption.

Agencies taking responsibility of state management for agriculture and state owned enterprises should be "midwife" of farmers' households in transforming agricultural structure, in charge of instructing plant cultivation, animal raising, assembling products, processing and exporting. New technologies should be researched and applied in agricultural production to enhance the structural transformation. Earlier, infrastructure used to be improved serving mainly paddy production. But now this way should be changed to target to transportation, irrigation and construction of farms producing varieties in line with the structural transformation.

The Prime Minister stressed that the Ministry of Agriculture and Rural Development should pay attention to planning, improving staffs capacity, especially extension staffs to equip them with enough knowledge to give technical guidance to farmers developing production towards new transformation. The improvement of market information and trade promotion is of extreme importance to orient agricultural production development. Each ministry and enterprise should find markets for themselves. Ministry of Agriculture and Rural Development and provincial agricultural departments need to make detail production plan to become the real "midwife" for the production structural transformation. Processing firms should be in close relationship with material areas and sign contracts with farmers to encourage them investing in agricultural production.

The improvement of varieties is very significant for structural transformation process to produce high productivity and quality. Fund should be sufficiently provided by the Government to effectively researching and selecting varieties. The Prime Minister required Ministry of Agriculture and Rural Development to submit specific documents to National Assembly for the Government to issue legal documents serving the rapid transformation of agricultural production.

Under the support of such international organizations as Ford Foundation, ICRAF,CIRAD, Information Center for Agriculture and Rural Development (ICARD) cooperated with Vietnam Agriculture Science Institute to organize the conference named "Research and application of technological advances for the sustainable agricultural production". The conference focused on reviewing research results, methods to expand and apply advanced technologies; orienting scientific research plan for upland agricultural production to ensure agricultural and rural development for improving farmers' income.

The conference was organized in Bac Kan People Committee from 18-20, October, 2001 hosted by Prof. Dr. Ngo The Dan, President of Vietnam Agriculture Science Association. The conference is evaluated very successful with the number of participants higher than expected, including over 80 delegates from Ministry of Agriculture and Rural Development, Ministry of Science, Technology and Environment, 14 research institutes under the MARD, 14 agriculture departments and science and technology departments and 4 universities. In addition, 8 international experts involving in the issue also attended this conference.

This conference witnessed 10 reports on upland agricultural technological advances from Department of Science, Technology and Products' Quality (MARD), Vietnam Agricultural Science Institute and a number of projects that the Institute is implementing in upland areas, National Institute of Soil and Fertilizer, National Institute for Husbandry, Institute of Irrigation Science, Tea Research Institute, Fruit and Vegetable Research Institute and the World Bank. In addition, the conference displayed 11 posters on the latest agricultural technological advances from Vietnam Agricultural Science Institute, Maize Research Institute, Vegetable and Fruit Research Institute, Plant Protection Institute, National Institute for Husbandry and Irrigation Research Institute. Those reports and posters showed that over the last few years, agricultural research institutes, universities and international organizations have cooperated closely to research a series of technical advances on upland agriculture and rural development as follows:

After listening to reports on new technological advances, participants were divided into 4 groups (North East Group, North West Group, other provinces group and international expert group) to discuss and give out some proposals as follows:

In conclusion of the conference, Prof. Dr. Ngo The Dan emphasized the importance of technological advances mentioned during the conference to the agricultural and rural development in Northern upland areas and gave some conclusions on the following issues:

After the conference, a series of follow-up activities have been implemented, including:

The Vietnam Sweden Mountain Rural Development Programme (MRDP) is a continuation of long row of forestry and rural development programmes in collaboration between Sweden and Vietnam. MRDP has focused on poverty alleviation and rural development, through increased production, capacity building at all levels and through support to development of conducive policies. MRDP is working in 5 provinces in the Northern Mountain areas of Vietnam; Phu Tho, Yen Bai, Tuyen Quang, Lao Cai and Ha Giang.

Poverty, in present Vietnam, is seen both as the growing (albeit still small) gaps between rich and poor in a community, but also as entire communities in remote and disadvantaged areas not benefiting from the present high growth rate, and thus remaining poor. The MRDP strategy for poverty alleviation, focuses on the latter situation. The main programme strategy is to support to people in remote areas. To assist them in improving their livelihood through, increased production, better organization, access to credits and markets, new and improved products.

The main programme activities

Introduction of decentralised planning

The programme is organized in 5 independent province projects. Each of these projects is headed by the provincial Director of DARD and the Vice Chairman in the Provincial People’s Committee, responsible for agriculture and rural development.

Each of the projects makes their own annual work plan, have their own budget and are responsible for implementation and reporting on the project activities. At central level there is a Programme Board (with the Vice Minister of MARD as chairman) and with members from the People’s Committees in the 5 provinces. The role of the Board is to decide on guidelines for programme implementation and to approve the annual work-plans. Within the frame set by the Board, each of the projects have a large degree of freedom to make their own priorities.

To further elaborate the decentralization, the planning and reporting structure for the programme, was changed in year 2000. A planning based on geographical areas and management levels replaced the structure of project components. In the revised planning, each province and each district made their own plans, with their own budgets. The plans contained two types of activities: for support and for capacity building. Support activities are aiming at providing backstopping to lower levels and capacity building activities to improve the province / district’s own capacity.

Introduction of the Commune and Village Development Budget

Support to planning at Village and Commune Level has been an important part of both MRDP and it’s predecessor, the Forestry Co-operation Programme (FCP). Under FCP the Participatory Rural Appraisal (PRA) was introduced as a local planning tool. A Village Management Group was appointed in each of the project villages, to be responsible for the production of the local plans.

As a part of the decentralised planning in MRDP, communes and villages in remote areas were allocated an amount of money to be used according to their priorities and decisions. Each village (around 200) and each commune (around 75), made a development plan. After the plan was approved a sum of money (between 10 – 50 million VND) was transferred to the Management Group. The funds were used for agricultural input, small-scale infrastructure investments and training.

Through the introduction of the Village Funds, people in the project area were given increased influence over the use of the programme funds and the full responsibility for their own development. All in all, 40% of the operational funds for the programme was distributed directly to local levels through the Village Development Funds..

Credit component

In the programme before MRDP, revolving funds were established in most of the programme villages. During an early stage of MRDP it was decided to formalize these into a group credit system. More than 200 Savings and Credit Groups were established. The groups received loan funds from the porgramme, but also had a compulsory contribution from members to build up their own capital. The groups gave loans to their members and handled their own accounting. The programme provided management training for the groups.

When the system with credit groups was established, it was envisaged that the groups, through training and support from the programme, would reach a level where they could be officially recognized as local credit groups. They would then return the principal loan funds to the project and continue operations with the capital they gathered through member’s contribution and accumulated interest. In reality this did not happened. Only few groups reached a stage where they were able to return the loan funds and continue on their own.

After more than half way through the project, a decision was taken to hand over the loan funds and the groups to the formal banking system. An agreement was negotiated with the Vietnam Bank for the Poor (VBP). VBP would take over all the loan funds (and contribute with an equal amount of VBP funds). These funds will be lent to farmers through the same system of Credit Groups as in MRDP. VBP will continue to provide training for the groups. In this way the method developed by MRDP will remain effective after the end of the programme, and VBP will have a possibility to try a system with group credits at a pilot scale.

Community based forest management

In the early days of the programme, support to participatory allocation of farmland was important. Later after all the agricultural land had been distributed, the allocation of forestland was supported. In the midland areas a model was developed, with allocation of a small forest area to each household for intensive use under agro-forestry practices, called home garden or forest garden.

As the programme focus shifted towards remote areas, where larger forest areas surround the villages, this method showed to be inappropriate. Instead the programme started to develop pilot scale methods where larger forests were allocated to a community or a group of households for their shared use. This model better reflects the way people normally use their forestland.

A larger scale implementation of this type of forest allocation requires changes in forests policy and legislation. The development of policies related to forestry has been supported through a sixth project for capacity building at the Ministry of Agriculture and Rural Development. This project also has it’s own work-plan and budget.

Business promotion

MRDP has worked with several types of business promotion activities. In the remote areas two groups of women from ethnic minorities have been supported to improve the quality of their products and to find a market these products. The women have also been trained in management and planning, to be able to manage their new business on their own. This has proven to be a model well suited for upland areas. In one of the villages where it has been tried, the new markets have contributed substantially to cash inflow. The status of the women in the village increases, as they become major cash earners in many of the families.

Other example of business promotion includes support to tea co-operatives and small scale processing of agricultural products, on farm. Such examples include tofu making, mushroom cultivation, soya sauce production etc. In several cases business promotion activities have been supported by credits to groups and households.

Extension and applied research

To support the extension and testing of new models for increase production, examples of different production methods have been established throughout the project area. The purpose for these models is to show an example of a high production system, and to contribute to the local extension workers knowledge and experience of different production methods.

Impact monitoring

To monitor the changes in livelihood and environment in the project areas two participatory studies of socio-economic and environment impact have been undertaken. In these studies the people in a sample of villages in the programme area have described the changes they have seen and how these have affected their daily life.

Analysis of major achievements and recommendations for future programmes:

The decentralised planning and village funds was implemented at all levels and has been seen as very interesting. The introduction of decentralised planning and village development funds were very well received both by local farmers in the villages and by staff at district and province. All in all 200 villages received funds in year 2000 and 2001. Almost all of the direct support to households in the programme is channeled through the village development funds.

The Village Development Fund could be continued and expanded into new programmes. The village funds could be linked closer to income from use of natural resources. The programme has strengthened the focus on poor and remote areas through the focus of Village funds in remote and mountain areas.

The local based management of forests and other natural resources has proven to be an alternative to large-scale management through state enterprise or commercial activities. The involvement of local groups and communities in the management provides both a strong tool for protecting the forest and at the same time a potential for improved livelihood among people in the area.