2005 is the 17th year since Vietnam first exported rice, total volume of contracted export rice until April 2005 reached nearly 3 million tons and actual shipment reached 1.2 million tons. Average price stood at 245 USD/tonne (FOB), 49 USD/tonne up against the same period last year.

Winter - Spring (W-S) rice crop has been harvested with good news. Cultivated area increased more than 10,000 ha to 1,497,000 ha, average productivity increased more than 8 quintal/ha (60.4 quintals/ha), yield up 250,000 tonnes to 8.8 million tonne/ha compare to the last W-S with higher quality. Vinafood 2 continues to be the leading company when signed export contract up to 1.5 million tonnes of rice, accounts for 50% of the total signed rice volume of the whole country.

In quarter I, Vinafood 2 shipped 591,000 tonnes, accounted for close to 58% total rice volume of the country and it is estimated that at the end of April, 2005, the company will ship about 900,000 tonnes of rice. This success is thanks to the great contribution of 3 enterprise members: Vinh Long Food and Foodstuff Company (82,039 tonnes of exported rice), Tien Giang Food Company (71,186 tonnes of exported rice), Kien Giang Import-Export Company (47,883 tonnes of exported rice). Will drought cause deficit supply of rice? According to the Ministry of Agriculture and Rural Development and Southern Food Incorporation, rice supply is not going to be affected by drought. There are more than 500,000 tonnes of rice in stocks, 400,000 ha have been sowed in the Summer-Autumn rice crop and will be harvested in September.

Unlike years before, rice prices still benefit to farmers when stood at 2,300 - 2,350 VND/kg. At the harvest time (December, 2004), normal rice price stood at 2,400 VND/kg; fragrant rice price: 2,700 - 2,800 VND/kg; ST1, ST3 and ST5 rice: 3,200 VND/kg; KD rice of 8 tonnes/ha productivity: 3,700 - 3,800 VND/kg (this brought about a profit up to VND12 million/ha for farmers growing KD rice).

After 16 years being an exporter of rice (1989-2004), Vietnam shipped more than 45.14 million tonnes with the revenue up to USD 10.77 billion. Vietnam in 13 years was the second largest rice supplier in the world as regards to exported rice volume (3 years at the third grade after Thailand and India).

Thanks to the remarkable advantages and the diversification as well as the flexibility, rural trade have existed and developed for decades, makes up the symbolic characteristics of many rural areas, contributes to the reservation and development of cultural identity of Vietnam. The specific characteristic of rural trade is the establishment of trade villages all over the country. But the development of various kinds of rural trade in a long time carried with it the unstableness and at this time has to face the difficulties of market mechanism which results in the abolition of many trade villages.

Being aware of the preeminence, the important role as well as the disadvantages of this special economic sector in the national economy, in recent years, the Government have promulgated many policies with aims to guide and create favorable conditions for the continuous development of rural trade in the new context with proper scale, help rural trade sector in Vietnam develop in the integration process to the economy in the region and all over the world.

Following are policies on the development of rural trade:

Decision No 132/2000/QÐ-TTg dated November 24, 2000 of the Prime Minister on some policies which encourage the development of rural trade (abbreviated as Decision 132/2000) is one of the first Decisions of the State promulgated with specific priority regulations for rural trade including home craft production (small scale industry), handmade products, construction and transportation at commune level, inter-commune level and other services that serve the production and the living of habitants in rural areas.

Following are specific policies in the Decision:

Land: The State allows transfer parts of agro-forestry land area for rural trade development. Thanks to this policy, some provinces and cities belong directly to the Central have set up schemes for the development of rural trade until 2010. Many industrial and small scale industrial zones have been established or are planned in the local development plans. The Decision also creates favorable legal basis for households to rent land for their rural trade business.

Material for production: The State encourages the development of industry, small scale industry, material production or preliminary processing for rural trade business.. The State asks province and city authorities to set up development plans for material area of agro-forestry and fishery for stable and available material sources.

As for forest products which are not counted in the export forbidden list, when export, the exporters do not have to inform to authorities the material source and they are not restricted by the export quota.

Credit investment: The State allows rural trade units who cannot borrow money by mortgage to borrow money according to the regulations on the guarantee action of the third party. Also due to the Decision, The State Bank of Vietnam gave out instructions for credit organizations, in which credit organizations help rural trade units to get money with simple procedures, inform in public ways to borrow money with simple procedures, set up proper forms of lending money and pave favorable conditions for rural trade units to borrow capital for their business.

Tax and fees: The State stated that rural trade units may enjoy the preferential tax promulgated in the Decree No 51/1999/NÐ-CP dated July 8, 1999 of the Government. The State also defined by regulations the detailed conduction of domestic investment encouragement Law (Adjusted edition). According to the State, rural trade units only pay fees with regards to the Decree No 04/1999/ NÐ-CP dated January 30, 1999 of the Government, abolition and forbiddance of illegal fee and charge collection.

Information and product consumption: Rural trade units may enjoy a 50% reduction in renting costs when taking part in domestic trade fairs and exhibitions. Rural trade units may enjoy favorable conditions in the immigration process and will be financed part of the costs when going abroad for sightseeing, training, taking part in trade fairs and exhibitions, product introduction programmes and market survey.

Science, technology and environment: Ministry of Science, Technology and Environment controls and sets aside essential expenses for the annual plan for the technology study and renovation, style improvement and study for the domestic material usage. Ministry of Science, Technology and Environment studies and transfers waste treatment technology, resolves the environment pollution in the rural trade sector.

Product quality: The State encourages rural trade units continuously improve the quality, diversify the products, make them more and more sophisticated, make them represent well the national identity, the national tradition, improve the competitiveness in domestic and global market. Besides, the State requires households, individuals and organization specialized in rural trade activities register the product quality standards, packaging patterns, industrial designs to local authorities.

Labour force and training: The State gives priority to the training and employment of the labour force from those households whose land are requested to develop the rural trade sector, tax exemption for the handing over the rural trade of old craftsmen to the next generations. State - owned vocational schools give priority to rural trade units.

The State acknowledges and sets up policies that respect craftsmen, skillful workers who are instrumental in preserving and handing over craft works. As requested by the Government, MARD, Ministry of Culture and Information, Ministry of Labour, Invalids and Social Affair promulgated Joint Circular Letter No 41/2002/TTLT/BNN-BLÐTBXH-BVHTT dated May 30, 2002. The Circular Letter defines standards and procedures of appellation and some policies for craftsmen.

On November 26, 2003, the Vietnamese National Assembly approved the Emulation and Reward Law (No 15/2003/QH11), in which appellations namely "People's artist" and "Excellent artist" were donated to many individuals of seniority that succeed, preserve, create and develop the traditional handicrafts.

One year after the promulgation of Decision 132/2000, the Prime Minister published Decision No 132/2001/QÐ-TTG dated September 7, 2001; and Ministry of Finance published Circular Letter No 79/2001/TR-BTC dated September 28, 2001 on the finance mechanism for the conduction of the regional development programme on rural transportation, fishery raising units and infrastructure for rural trade development.

Circular Letter No 84/2002/n-BTC of Ministry of Finance dated September 26, 2002 defines financial target with aims to encourage the rural trade development. It also defines that the State supports capital for the construction of infrastructure (roads, electric, water, environment, stocks) for regions where rural trade activities are acknowledged. The State also support the trade promotion training costs for rural trade units with aims to maintain and develop trade villages, rural trade, create jobs and increase the income for workers.

The Development Support Fund enforced the official letter No 991/HRPT-TDÐP dated June 28, 2001 known as the guidance for the conduction of the Decision No 132/2000 QÐ-TTG on the credit mechanism of capital lending of the State for rural trade projects. Until June 30, 2002, the Development Support Fund lent money to about 117 projects with the total committed capital up to VND135 billion. These above policies helped pave the way for grassroots authorities access to preferential credit sources for the construction of traffic-ways, infrastructure and for the development of trade villages.

Co-operatives Law (No 18/2003/QH11) was approved by the XI National Assembly on November 26, 2003. The Law create legal basis and collaborating chances for rural trade units. This corresponds to the characteristics of Vietnamese economy when integrating into the global market.

After the new land Law took effect on July 1, 2004, the system of land law has met the requests of State control as well as the benefit of land users. This surely will create a new motivation for the development of rural trade.

On November 23, 2001, the Government enforced Decree No 90/2001/NÐ-CP on the support for the development of small and medium sized enterprises, in which the Government supports finance, credit in a certain time for small and medium sized enterprises, helps them invest in some rural trades including traditional rural trade and in regions which are needed to be encouraged. The conduction of the Decree will create more chance for rural trade units to improve the production capacity and competitiveness on the market. These are 2 main factors that cannot be ignored in the integration process.

On June 9, 2004, the Government promulgated Decree No 134/2004/NÐ-CP to encourage the development of rural industry. The objectives are to support, pave the way for individuals and organisations of every economic sector to invest and develop a stable rural trade production, improve their competitiveness and conduct well the integration process, create favorable conditions for the development of rural trade.

Above are present policies that support the rural trade. However, there are still some problems that needs to be taken care of for the accomplishment of policy system for the development of rural trade such as general scheme establishment for the long-term development of rural trade all over the country. The transformation of land-used objective is still very complicated, tax imposed for rural trade units is still at a high level and low quality of rural trade products are shortcomings of the rural trade sector in Vietnam. This results in the limited development of rural trade. Also, the environment pollution is one of the biggest shortcomings for the development of rural trade. Training in rural trade sector still have to bear the influence of the diversification and family-succeeded custom in rural trade.

From April 11-12, 2005, the Coordinate Assessment Group between the Government and donors for rural fresh water supply and health in Vietnam organised the second and the last conference. Delegations of the conference comprise representatives from various Departments of the Ministry of Agriculture and Rural Development (MARD), other concerning ministries and departments namely Ministry of Health, Ministry of Education and Training, Ministry of Construction and many Centres for rural fresh water and Environment Hygiene of many provinces.

At the 2-day conference, the delegations comment and contribute ideas for the report of the present condition of rural water supply and hygiene and for 11 recommendations of the Assessment Group for the rural fresh water and environment hygiene industry in the time to come. The conference also acknowledge suggestion of the Group on the establishment of a partner with aims to support and regulate the management and conduction of the rural fresh water and environment hygiene activities of the Government and donors.

Vietnam located in the most important area of tropical fruit production in the world. After nearly 20 years of agricultural reform, in which household economy played an important role, fruit crop area and output increased rapidly. Until 2003, the total fruit crop area in the whole country reached to 692,000ha with total output of 5,695,000 tonnes. This contributed much to the domestic consumption as well as to the export turnover.

However, in the integration process with fierce competition, fruit crop industry reveals some basic shortcomings. A huge volume of fruits generated by households fails to satisfy the market demand, although the domestic and international demand is very high. The major reason here is due to the unplanned, dispersed production, insufficient or incorrect implementation of advanced technology in the production process, harvest technique and post-harvest technique (processing, reservation,…). That results in the demand and supply disparity.

Global economic integration and WTO participation as well as the FTA commitment of Vietnam in the coming time require a strict reform in agriculture in general and fruit crop production in particular. Only by that can the agriculture and fruit crop production satisfy the market demand and can the difficulties in distribution process be solved. Reorganizing the fruit crop production process is the compulsory trend which corresponds to the development strategy of the agriculture today because of the greatest potential and competitive advantage of the industry thanks to the available output and market.

Being awarded of that, on March 21, 2005, at the Southern Fruit Tree Study Institute (Tien Giang Province), Steering Committee of Fruits and Vegetables Development Programme (Ministry of Agriculture and Rural Development), Vietnam Fruit Association (Vinafruit), Agro-Forestry Product Processing and Salt Production Department and a huge number of managers from central to grassroot level, researchers, enterprises and fruit production farmers from most of Mekong River Delta provinces participated in "Song Tien GAP Association".

The State also agreed with the establishment of "Song Tien GAP Association". Decision No 4146 QD/BNN-TCCB dated November 18, 2004 promulgating by the Ministry of Agriculture and Rural Development established Steering Committee of associated safe fruit production and distribution in Tien River region.

GAP process (Good Agriculture Practices) is a model that goes well with market mechanism and is increasingly applied all over the world, especially in the third world. For years, the development of agriculture in Vietnam tended to focus on agricultural technology, the role of market was ignored, farmers applied cultivation technology well for the highest productivity and yield. While the most important factors of the market requirement such as sanitary, quality, quantity, the equality of fruits in batches were ignored or disregarded by the producers. In order to improve the competitiveness of Vietnamese fruits, it is necessary to guarantee the smooth link of the value chain from the production to the distribution process.

However, this is a new linking type between production and distribution in Vietnam, and there would be numerous obstacles in the process because of the characteristic of fruit production in Vietnam. Unlike other countries in the world and in the region, the characteristic of fruit production in Vietnam is the dependence on small production, farmers grow fruit trees in Vietnam hardly approach to the knowledge and experience of fruit production for trading activities as well as the strict requirement of markets, Song Tien GAP Association solve the above mentioned problem.

It could be said that, this model is an experiment for the preparation of Vietnamese fruits to overcome challenges and integrate the global market.

If the operation of Song Tien GAP succeed, the model in which production is linked well to distribution will be the potential example for other agricultural production industries, and it will help guarantee a stability of agriculture and rural economy.