Document(s) 8 of 30

To overcome the worsening socioeconomic crisis, the Sixth National Congress (December 1986) adopted as its guideline the comprehensive renovation of the country’s economic system. Since then, many institutional reforms have been carried out, of which the landmark for rural development was the Party Politburo’s Resolution 10 (April 1988) on "Renovation of management of agricultural economy" (abbreviated to Contract 10). Then came the Politburo Resolution 22 (November 1989) and Government Decision 72 (March 1990) on "Socioeconomic development in mountainous regions", "Strategy of socioeconomic development 1991-2000" (1991), the Land Law (1993), the Labour Law (1994), and several other documents of legal validity that were successively promulgated. The essential contents and effects of the above-mentioned reforms were to:

1. recognize the objective co-existence of various economic sectors as equal before the law;
2. return the decision on the use of labour and funds, and the right to long-term use of land, to peasant households, recognized as autonomous economic units;
3. manage the cooperatives or production groups that still function well by streamlining their management apparatus, and focusing on specific services, such as irrigation and pest control, that individual households cannot undertake effectively;
4. shift agriculture and rural economy from autarky to commodity production, depending on the characteristics and comparative advantages of each region;
5. free peasants from selling produce to the state at stipulated prices so that produce becomes regulated by a free market and mutually-consented prices;
6. increase state investment in major irrigation works, create credit banks to assist needy people with funds and promote agricultural extension work; and
7. give guidance and assist in expanding education, health services, communication lines, and power networks in the countryside on the basis of "joint efforts between the state and the people."

However, due to the very low starting point, worsened by decades of war and mismanagement, Viet Nam’s level of agricultural and rural development is still relatively retarded in several important respects, in comparison with other countries in the region. According to some economists’ calculations, in 1992, on the basis of 23 general socioeconomic-cultural criteria (such as per-capita GDP, ratio of agriculture in GDP, literacy rates, infant mortality rates, ratio of people with access to safe water, ratio of households using electricity, and apparent per capita daily calorie intake), the level of rural development of Viet Nam is about 30 years behind Taiwan, 25 years behind Malaysia, 20 years behind Thailand, 12 years behind China, and 8 years behind Indonesia (Quy 1996, p. 18).

The question therefore arises whether, in the near future, Viet Nam can expect to narrow the gap between itself and other countries in the region with regard to the level of economic development in general, and of agricultural and rural development in particular. Considering the requirements for a rapid, efficient, and sustainable development of agriculture and rurality, what is Viet Nam’s current situation, and what must Viet Nam do to solve the fundamental and pressing problems that are emerging? For instance, how can population pressure on the limited natural resources be reduced? How can sufficient employment be created for a labour force that already has high redundancy and is annually increasing, especially in the countryside? How can we attain high rates of economic growth using market mechanisms, and at the same time secure social equity, cultural development, and environmental integrity in the rural areas and throughout the whole country?

There are no easy answers to these questions. The analysis below of the socioeconomic impacts of renovation on some key aspects of rural development has but a modest objective.

Namely, it contributes to assessing the real state of things, to detect some of the contradictions that have emerged, to forecast development trends, and to offer some possible solutions.

Population and family planning

Over the past few decades in Viet Nam, thanks to implementation of the population-family planning program, the natural increase rate (NIR) has gradually declined, from 3.8 percent in 1955-1960, to 3.0 percent in 1970-1975, to 2.3 percent in 1985-1990, and to just over 2 percent in 1994. Compared with several countries in the region, however, Viet Nam’s NIR is still high. During 1985-1990, the NIR of South Korea was 1.0 percent, China 1.17 percent, Thailand 1.7 percent, Indonesia 1.9 percent, the Philippines 2.4 percent, and Malaysia 2.6 percent, compared to Viet Nam’s 2.3 percent (État du monde, 1994). Particularly in the countryside, where nearly 80 percent of the population lives, the NIR still is around 2.3-2.4 percent per year. Consequently, there are an additional 1.2 to 1.3 million people in the countryside every year. This has served to further reduce the per capita natural land and arable land acreage, which is already relatively small in Viet Nam.

In 1992, the total population of Viet Nam was four times that of Malaysia, although the land areas of the two countries are comparable. Viet Nam’s population was 1.2 times that of Thailand, which has a land area that is 155 percent that of Viet Nam. Even China, which has the largest population in the world, has a lower population density than Viet Nam (China had 128.8 persons/km² in 1992, compared to Viet Nam’s 208.7 persons/km²). With regard to average per capita arable land area, Viet Nam belongs to the lowest bracket in the world, with only 0.1 hectare per person in 1993.

While Vietnamese industry remains underdeveloped, agricultural labour is still mostly manual. Productivity in plant cultivation and husbandry are low, and potential rural non-agricultural occupations have not been fully identified or tapped. The low per capita acreage of arable land is a major obstacle to finding new potential for rural socioeconomic development, and is also a big challenge to the protection of the ecological environment. Therefore, if the NIR cannot be brought down reasonably quickly, the Vietnamese countryside will be locked into a vicious circle: Rapid growth of population leads to a deteriorating environment, resulting in increasingly impoverished people.

Under these circumstances, in conjunction with the strategy of socioeconomic development, 1991-2000 (and further toward 2010), the Vietnamese government advocates consolidating the apparatus for implementing the National Program on Population and Family Planning, the objective of which is to bring NIR down to 1.8 percent by 2000, and down even further, to about 1.2-1.3 percent in 2010 (Council of Ministers Ordinance, 1991).

Vietnamese demographers have offered a range of alternative feasible population forecasts, the medium alternative of which is shown in Table 1.

Table 1. Report on population and labour resources 1995 to 2010. 

	1995	2000	2005	2010
In the whole country (1 000 persons):	72 727	79 635	86 374	96 067
In the countryside:
a. Total (1 000 persons)	57 815	61 327	63 361	63 946
b. Ratio rural/total (%)	79.5	77.0	73.3	68.0

Source: Report on Population and Labour Resources. 1996.

It will still require a major effort for Viet Nam to find effective means so that actual numbers stay within at least these "medium alternative" targets. Although the Vietnamese government has had a population and family planning policy since 1961, for a long period it has not been consistently implemented. The education and propagation work on population has been limited mainly to urban areas and to some peripheral areas. In most rural areas, where a high NIR persists, the people have had little access to the necessary information, education, and contraceptive devices.

At times, discrepancies have cropped up between population policy objectives and other important socioeconomic policies, thereby nullifying the population policy. The most remarkable instance of this was the allotment of contract land to peasant households following the Politburo’s Resolution 10. Plots of land were assigned on the basis of family size, and in some places even in accordance with ancient village customs, with re-allotment possible at three- to five-year intervals. This induced young people to get married early, to set up separate households, and to have children right away to be eligible for an increased allotment of land. For example, in Ha Bac province in 1994, during preparations for giving the peasant households the right to stable and long-term use of arable land in accordance with Land Law, 30 837 children were counted who were not recorded in the official registry book.

Findings from our case studies conducted in Tuong Giang and Phong Khe communes of the Kinh ethnicity on the plains, and in Tu Ly commune covering four ethnic minorities in the mountainous region, show that the rate of reduction of NIR in the countryside remains slow and unstable. The cause of this demographic instability seems to be mainly attributable to the following factors:

• the infant mortality rate is still high, particularly in the mountainous regions;
• community caretaking for old people who have no children to rely on is not receiving enough attention;
• the level of education among rural people, especially women, is low;
• most married couples want to have both boys and girls, but above all a boy to preserve the family lineage;
• more manpower is wanted for production among some exclusively farming households;
• in the mountainous communities of some ethnic peoples, a crowded family is considered superior; and
• in the areas of Catholic religion, the prevalent belief is that the number of children is predestined by God, and thus nobody should practice family planning.

Labour and employment

In Viet Nam, during the pre-renovation period, the state and the collectives often assumed the task of providing jobs to all people of working age, with the effect that "everyone had a job, but not everyone fully worked." Thus, low labour productivity and economic inefficiency gradually led to economic stagnation and crisis. Since the start of renovation, instead of subsidizing the creation of jobs, the state has, step by step, focused on bringing in institutional reforms designed to ensure freedom to engage in production and business ventures for various economic sectors and for all strata of people. At the same time, national employment funds have been allocated to help create jobs, to offer preferential credits to needy families, and to provide vocational training and guidance to young people, so that the people may create jobs for themselves and for others. As a result, about one million new jobs were created every year under the 1991-1995 plan. Despite this achievement, unemployment in urban areas and underemployment in rural areas are still urgent and acute socioeconomic problems.

Rural underemployment has the following salient features: First, the rural work force continues to rise sharply, thus running increasingly counter to the limited availability of arable land. Despite the declining NIR in rural areas in recent years, the work force has been growing by 3-3.5 percent annually because of the explosive NIR in the preceding decades. Furthermore, 75-80 percent of the rural work force still have to find their livelihoods in farm work (or other rural employment). This is the main reason why average arable land area per rural inhabitant and per labourer keeps steadily diminishing. According to 1992 data, the average arable land area for each rural inhabitant in Viet Nam was 1 514 m², while it was approximately 9 100 m² in Malaysia, 6 100 m² in Thailand, 3 100 m² in the Philippines, and 2 800 m² in Indonesia (Rapa Publication 1994; General Statistical Office 1995a).

Second, the average number of days of full-time employment for agricultural workers is very limited. A foreign expert in agriculture considers underemployment to exist if a rural labourer has only 1 hectare of land or less. In Viet Nam, the average arable land area for each agricultural labourer in 1993 was only 3 100 m². Although with multiple cropping the land-use coefficient rose from 1.4 in 1985 to 1.58 in 1993, the average cultivated land area for each agricultural labourer was no more than 0.5 hectares. Thus, the agricultural work force is crowded onto a narrow arable land area, and faces inadequate access to economic opportunities. According to data from a 1993 investigation, only 18 percent of the agricultural work force was employed for more than 210 days per year; the remainder for less than 210 days, of which 21 percent were engaged for only 90 days of a four- to five-hour workday (Quy 1996, p. 52).

Third, while some of the rural work force has moved to urban areas and into other occupations, there is also a labour flow moving the other way into the countryside, so that labour redundancy in rural areas remains high. During lulls in farm work, it is estimated that hundreds of thousands of labourers from the countryside go to cities, particularly to Hanoi and Ho Chi Minh City, to look for jobs. Many rural young people have even gone to mining areas to "seek their fortunes" in minerals, gems, and gold mining, or to border-crossing points to work as porters for merchants. At the same time, in recent years, about 700 000 people have been laid off as a result of "production chain overhauling" and "managerial apparatus streamlining" in cities and industrial areas, and many of these have gone back to the countryside. This is in addition to demobilized soldiers, returning overseas workers, and repatriated refugees, most of whom also go back to the countryside. This has further worsened the already deplorable conditions of high population density and underemployment in rural areas. In 1994, in the whole country, the ratio of rural underemployed in the local work force was estimated to be around 30 percent, amounting to a total of around 8-9 million people. It is estimated that, by 2010, although the ratio of rural work force will gradually decline in tandem with the industrialization process, the absolute number of people of working age in rural areas will continue to rise: from 31.3 million in 1995, to 34.6 million in 2000, and to an estimated 38.8 million in 2010. The immediate task for the 1996-2000 plan is thus to solve the existing underemployment in rural areas and, at the same time, to create about 600-650 thousand new jobs each year to absorb the new entrants coming into the work force.

Findings from our surveys in the three communes, though not fully reflecting the diversity and complexity of the situation in the whole country, do reveal some possibilities for job creation and for reduction of rural work force redundancy. First, under conditions of limited arable land area, if we rely only on agricultural production, (worse still, on monoculture agriculture), the generation of new employment opportunities will reach a total impasse. Therefore, diversification of plant culture and livestock breeding in the exclusively farming households, and the multiplication of mixed economic households (such as farming combined with small industries and handicrafts, or farming combined with small industries, handicrafts, trade, and rural services), should be given priority in the search for effective solutions. In Tuong Giang commune, 45.5 percent of the redundant work force (apart from the time engaged in agricultural production) were engaged in construction work (carpentry, brick laying), and 36.4 percent in weaving occupation (towels, net cloth). In Phong Khe commune, 70.9 percent of the redundant work force (apart from the time spent in agricultural production), were engaged in paper-making (including the traditional zo paper and different kinds of recycled paper), and the rest were employed in services and trade. However, many obstacles were found to lie in the way of expansion of small industry and handicraft jobs, especially the deficiency in funds, knowledge, skills, and, above all, the uncertainty of markets.

Second, in Tu Ly commune, though it is relatively sparsely populated, the average cultivable agricultural land area per inhabitant and per labourer was the lowest by far in the whole country, while at the same time small industry, handicrafts and service activities were negligible. Therefore, underemployment in the commune was extremely serious. When farm work on the terraced rice fields and burnt-over land had been completed, most of the labourers had to go into the forest to get timber and find other products to sell to supplement family earnings. In the meantime, the policy of land- and forest-lease introduced by the state in the late 1980s, had, by 1994, been implemented in only 2 of the 14 hamlets of the commune. The inertia of the land-lease and forest-lease programs was observed not only here, but also in many other places. Only by accelerating the leasing of land, and by contracting afforestation and forest protection work to individual households - in combination with financial assistance and technical guidance envisaged in Project 327 (a project for greening bare hills and denuded land) - can we hope to help people of various ethnicities put into effect a mixed agro-forestry model, or an agro-forestry-livestock breeding model. These efforts will help to create additional employment, augment earnings, and contribute to restoring the ecological equilibrium of the mountainous regions and the whole country.

Restructuring the rural economy: diversifying agricultural production, and promoting small- and handicraft-industries

1. The intention was to diversify agricultural production and to develop husbandry into a major agricultural production sector. But the shortage of food led to an excessive concentration on rice and other staples.
2. The intention was to exploit the advantages of each region, to comprehensively develop agriculture-forestry-fishery, and to promote small- and handicraft-industries to meet the needs of the domestic market and to earn foreign exchange through exports But the government required every locality to be self-sufficient in food, and prohibited the free flow of agricultural products among regions.
3. The intention was to liberate every production factor, to enhance the potentials of labour, capital and economic opportunities for all strata of society. But priority was given to the "widespread development of the public sector, forced by collectivization, [which] denied the autonomous role of the household economy, and discriminated against private and individual economies" (Do Muoi: Continuation of the Rural Socioeconomic Renovation 1993, p. 20).

Meanwhile, the rural economic structure has also been initially transformed, though at a slower pace. A survey of the household economy conducted by the General Department of Statistics for the whole country shows that in 1994, agriculture, forestry and fishery activities accounted for 74.5 percent of total income of rural households; 9.7 percent came from small- and handicraft-industries and construction; and only 15.8 percent from trade and services (General Statistical Office 1995b). Within agriculture, the value share of cultivation (75 percent) and husbandry (25 percent) have remained the same for many years, and have only recently changed slightly, with husbandry increasing from 26 percent in 1992 to 27 percent in 1995. Output of food in paddy equivalents rose from 18.4 million tons in 1986 to 27.5 million tons in 1995, and output of vegetables, beans, industrial crops and fruits also rapidly increased (so the overall composition of agriculture has not shown any major shifts).

The above discussion offers some general comments on the transformation of Viet Nam’s rural economic structure over the last 10 years. The results of our case studies add some more detailed information. For example, in Tuong Giang and Phong Khe communes, although most households have contract land for agricultural production, they are additionally involved in small- and handicraft-industries or in service activities. In 1994, the structure of total product values of households in these two communes differed considerably from the overall country situation. Shares of output by sector in Phong Khe commune and Tuong Giang commune were found respectively to be: agriculture: 40.1 percent and 30.2 percent; handicrafts and small industries: 37.5 percent and 40.2 percent; and trade and services: 22.4 percent and 29.6 percent.

What captures our attention is that, when a handicraft or small industry becomes popular in a village, it generally leads to the development of supporting industries and services. Both paper production in Phong Khe village and textiles in Tuong Giang commune led to demands for carpenters, mechanics, electrical technicians, and several other types of craftsmen bringing forth a network of services in materials supply and product marketing. Thus it was found that "jobs create jobs."

In Tu Ly commune, 95.5 percent of households had been engaged in monocrop agriculture for many years, while many Dao families continue the tradition of shifting cultivation by burning forests to grow corn, sweet potatoes, and manioc to avoid starvation. In recent years, about 15-20 percent of the households have gradually moved from subsistence food production and monoculture to growing crops with higher economic value such as fruits, soybeans, groundnuts, and sugar cane. They also supplement their cash incomes with contracts for forest protection and replanting, in accordance with Project No. 327 and the World Food Programme (PAM) project. In a situation where rice is now increasingly produced in the deltas for the whole nation, and with improvements in transportation, a kilogram of soybeans or groundnuts sold by ethnic people can now be exchanged for 2-3 kilograms of rice - this is much more than could have been produced locally on a comparable area of land. These are the types of factors that have pushed the transformation from monoagriculture to multicropping, reduced shifting cultivation and nomadic settlements, while opening up prospects to replicate the models of agriculture-forestry, or agriculture-forestry-cattle husbandry, at the local level.

From such observations, one can see the impact of the renovation policies in transforming rural economic structures. These have been developed step by step, as follows: (a) from monocrops to multicrop agricultural production; (b) from purely agricultural to diversified occupations; (c) from the pursuit of quantitative targets to qualitative improvements; (d) from self-subsistence to cash crop and commodity production; and (e) from thinking of "economy in kind" to "economy in value-added."

The only major concern is that the process of transformation is taking place so slowly. The reasons for this are numerous, including capital constraints, limited skills and knowledge, difficulties encountered in developing new varieties (of both plants and animals), the weak rural infrastructure (particularly transportation), and the narrow market access, especially from remote and mountainous areas. Among these, two truisms might be highlighted: "the poor lack capital, while the rich lack markets" (Dao 1995).

From the above analysis of some of the main features and causes of economic restructuring in the countryside, some conclusions and recommendations can be made on how best to promote the transformation of the rural economic structure toward greater efficiency.

Management and utilization of natural resources

Through the turbulent changes of history, the utilization and management of land and water has become ever more complicated. As national statistics show, in 1993, out of a total land area of 33.1 million hectares, 7.3 million hectares were classified as agricultural land, 9.6 million hectares as forest, 1.1 million hectares as specialized land, 774 000 hectares as settlement land, and 14.2 million hectares as waste land (mainly bare hills). In the areas of agricultural and rural development in particular, the utilization of land and water raise the following urgent issues.

Utilization and management of forest land

There are many causes for this situation, among which the following can be regarded as major. First, fierce wars were waged over 30 years and had their effect. During the second Indochina war, the US dropped 11.4 million tons of bombs and bullets and 100 000 tons of chemicals on both North and South Viet Nam, destroying about 2 million hectares of tropical forests.

Second, there has been an explosion of population in recent decades, in which the NIR of minority peoples in the highland and mountain regions has been much higher than the national average. Moreover, about 3 to 4 million people have moved from the deltas to the mountain provinces to set up new economic zones. These high rates of population growth (both natural and through migration) have intensified pressure on forest lands. Shifting cultivation and shifting settlements of some ethnic peoples have also been important factors in reducing forest cover.

Third, the mistakes and shortcomings of some macroeconomic management policies prior to the renovation period, and especially the requirement of local self-sufficiency of food in the mountainous regions, gave people a green light to destroy forests to obtain land for food production.

Fourth, the exploitation of timber production by the state farms to meet high annual timber export targets also contributed to forest destruction, as did the cutting of wood for domestic cooking and for house building by local people. There are also periodic forest fires which burn down several thousand hectares of forest land every year.

From 1943 to 1990, Viet Nam lost about 250 000-260 000 hectares of forests annually due to the above causes. The destruction of forests also had serious environmental impacts relating to land and water resources. In recent years, during the rainy season, the level of rivers has often been higher than previously recorded, the volume of water has been greater, and its flow has been faster, creating terrible "sweeping floods" in many mountainous regions, and serious deluges in the deltas. Without adequate forest cover, the hills have steadily eroded, leaving barren stone and gravel in many mountainous regions. Land and sand have been swept away, hollowing the rivers and silting up the reservoirs. During the dry season, many streams dry up altogether, or else the surface of rivers is lowered to levels insufficient to supply water requirements for agriculture, industrial centres, and the basic needs of people in the upper and middle basins. In other instances, salt water intrudes into lower basins, especially in the Mekong and Red River Deltas.

To offset, and hopefully to reverse, these dangerous trends, since 1968 the Government of Viet Nam (Resolution 38/CP, 1968) has launched a campaign of settlement of minority peoples in the North, to reduce the cutting of forest for cultivated land. It has also implemented a policy of land forest transfer to the cooperatives, with the aim of protecting and developing forest resources. However, these policies have only been slowly introduced and have only partially been accepted into the people’s way of life. By 1990, only 324 500 families (with 1 902 800 people) had been permanently settled, and 4.3 million hectares of forest land (of which only 1.5 million hectares remained as forest) had been transferred to the cooperatives, and not yet to individual households (Government of Viet Nam 1991). Thus, in practice, a clear responsibility for local stewardship of forest land has yet to be established. Only in recent years has the situation been gradually improved with the announcement of the Law for Forest Protection and Development (1991), the government decision prohibiting raw timber exports (1991), the implementation of Program No. 327 for bare hills and denuded land greening (1992),^[3] and the Law on Environmental Protection passed by the National Assembly (1993).

The outcome of all these efforts has been that, each year during 1991-1995, about 150 000 hectares of concentrated forests, and 400 million hectares of scattered trees, have been cultivated to supply firewood for local people. The decision to prohibit exports of raw timber has also been partly effective in reducing commercial exploitation under the last five-year plan. The growth rate of new forest cover, however, is thus still below the rate of forest destruction, due mainly to the constraints of capital resources provided under Program No. 327, inadequate settlement funds, the scattered implementation of projects, and the complicated procedures involved in accessing capital resources.

Our survey in Tu Ly Commune shows a situation similar to that in other regions of the country. The transfer of land and the contracting of reforestation to the peasants has proceeded too slowly. By the end of 1994, 53 percent of interviewed families had not yet received land and forest management rights (among which the percentage of the Kinh was 68.7 percent, the Muong 52 percent, the Dao 51 percent, and the Tay 100 percent). Only very recently have two of the 14 hamlets of the commune received land and been issued contracts to protect or grow forests according to Program No. 327, involving an average of 8 000m² per household. In just over a year, these households have planted 200 hectares of high-value trees, including cinnamon, fruits, and other species. However, while new forests are grown in one place, they are being destroyed in others, because the majority of households still have not yet been allocated land for forest management.

Utilization of land and water in agricultural production.

During the first 14-15 years after reunification of the country, due to food shortages, about 90 percent of the agricultural land was used for grain crops, primarily rice. From 1989 to the present, under the open-market economy, agricultural production has been increasingly oriented toward intensive and multiple crops as well as increased diversification of plants resulting in an increasing food supply to meet both domestic and export requirements. There has been a step-by-step effort to expand the area under vegetables, beans, fruits, and short- and long-term industrial crops.

Over the centuries of development in Viet Nam’s agriculture, many measures have been carried out to find ways to expand and improve the irrigation system, combining infrastructure for water supply and drainage, anti-flood measures in the rainy season, and anti-drought and anti-saltwater intrusion measures in the dry season. The experience of these thousands of years in developing Viet Nam’s traditional water-rice civilization have been captured in the following words: "First water, second fertilizer, third hard work, and fourth seed varieties."

The irrigation system includes over 3 000 kilometres of dikes along the river systems in the North, which have been continually built, managed, and improved every year to protect the Ma and the Ca River Basins from floods in the Red River Delta. Over 2 000 kilometres of sea dikes have been built along the coastal strip of central Viet Nam to protect the land from saltwater intrusion, especially in the typhoon seasons. As for the Mekong River Delta, because of the typically low level of land, the people are compelled either to be adaptive or to take measures to avoid the consequences of this situation. "To be adaptive" means to take advantage of the high water season to collect silt in order to enrich the soil and wash off salinity from some areas. "To avoid" means to find ways to change the crop time, build low dikes to protect crops in some areas from flood or drought, and reclaim the mangroves to avoid land erosion in areas of new land formation. New water supply and drainage facilities have also been constructed in recent decades. Instead of relying mainly on "Heaven’s water," as in the past, as of 1994, 41.3 percent of the water supply to, and 30.3 percent of water drainage from, the country’s total cultivated areas (first of all the rice fields) have been provided by constructing irrigation facilities (General Statistical Office 1994).

Along with irrigation, high yield and improved quality crops have also become widespread in many areas. However, the widespread development of new high-yield rice varieties has often led to excessive use of chemical fertilizers and insecticides, with negative impacts on land and water resources. Chemical fertilizers and insecticides from both domestic production and imports have been increasingly utilized in agriculture in recent years (see Table 2).

Table 2. Chemical fertilizer and insecticide use, 1990-1993, by source. 

	1990	1991	1992	1993
1. Chemical fertilizer
a. Domestic production (1 000 tonnes)	354	450	530	714
b. Imports (1 000 tonnes)	2 122	2 662	2 455	3 028
2. Insecticide
a. Domestic production (1 000 tonnes)	9	12	11	14
b. Imports (1 000 tonnes)	9	22	24.5	36.4

Source: General Statistical Office, 1995a.

Compared to other countries in the region, the average use of chemical fertilizer per cultivated hectare in Viet Nam is around the median level. It is higher than Thailand and the Philippines, and lower than Indonesia and Malaysia. But the use of insecticides in Viet Nam is relatively high. According to figures issued by Food and Agriculture Organization (FAO), the average payment for insecticide per hectare of land in 1990-1991 was: China US $25.60, India US $24.90, the Philippines US $26.00, northern Viet Nam US $22.30, and southern Viet Nam US $39.30 (FAO 1992).

Heavy use of chemical fertilizers can dramatically increase rice yields in the short and intermediate term, but it mineralizes cultivated land and reduces the fertility of the soil over the long term. The insecticides that are used extensively in Viet Nam are often the organophosphorous compounds, many of which leave high toxic residues with harmful ecological effects.^[4] These include killing natural predators, as well as fish and shrimp in the paddy fields, and they also adversely affect local people who inhale the chemicals or consume the polluted agricultural products. There can be no hope of attaining sustainable agricultural development from such intensive practices.

Recently, the use of micro-biofertilizer and integrated pest management (IPM) have shown better results, but such methods are being used in only a few localities. Survey findings in the Tuong Giang commune indicate that most households still use composted animal manure and green manure based on traditional practices. This approach does not adversely reduce soil fertility, while assuring relatively high yields from 150 to 180 kilograms per "sao" (360 m²), or 4.5 to 5 tons of rice per hectare. By contrast, in the Phong Khe commune, land, water and air have been alarmingly polluted. The problem is not so much the excessive use of insecticides in agriculture, but rather the dozens of paper-recycling factories (concentrated in Duong O village) which release all their waste water contaminated with chemicals into nearby canals and rivers, damaging rice, other crops, fish stocks, and the quality of people’s lives. Thus, without ensuring that small industrial estates in rural areas are based on proper ecological and environmental protection standards, there will also be no prospect of achieving sustainable development along these lines in rural areas.

Social stratification, hunger eradication, and poverty alleviation

In Viet Nam, before renovation, the dogmatic cognizance of "class differentiation" which would necessarily take place in the countryside after land reform, precipitated a campaign for agricultural collectivization, accompanied by the imposition of a "centralized, bureaucratic managerial mechanism" and "an egalitarian distribution principle" on the cooperatives. All this stagnated production, and thus rendered social stratification in the countryside almost negligible. But, since Viet Nam has shifted to a market-oriented economy, rich-poor polarization and social stratification have become clearly prevalent in both urban and rural areas.

"Rich" and "poor" are relative concepts, indicating the difference in income and living standards between various strata of people in a country during a given period of time, and it is difficult to offer a uniform criteria of rich and poor to apply to all countries and to different periods of development. According to concepts used by the World Bank and the Environment and Social Commission for Asia and the Pacific (ESCAP) since the 1980s, the poverty line of the developing countries has been determined by the cost of foodstuffs essential to preserve life at an average level of calorie intake around 2 100-2 300 calories per day, per person. Thus, Indonesia, in the early 1980s, managed 2 100 calories, and in 1990, China managed 2 150 calories.

In 1993, the Viet Nam General Department of Statistics (VGDS) set a calorie intake of 2 100 calories per day per person as the poverty line. Considering costs in different regions for the consumption of basic food and foodstuffs, monthly per capita income to meet this standard should be 50 000 VND in rural areas and 70 000 VND in urban areas. In this way, rural households were classified by VGDS by average monthly per capita income as follows:

1. under 50 000 VND for "poor" households (and under 30 000 VND for "very poor");
2. 50 000-70 000 VND for "lower middle";
3. 70 000-125 000 VND for "middle";
4. 125 000-250 000 VND for "upper middle"; and
5. from 250 000 VND upwards for "getting rich."

Table 3. The results of a rich-poor investigation in Viet Nam, 1993. 

Classification	Average income (VND 000)	Percentage of households
Getting rich households	429 800	2.29
Upper-middle households	173 530	13.69
Middle households	96 310	38.67
Lower-middle households	61 410	23.21
Poor households	39 280	22.14
- of which, very poor households	(25 210)	(4.58)
All households	94 440	100.0

Thus, in the whole country, "getting rich" households made up only 2.3 percent; "upper middle and middle" households 52.4 percent; and "absolutely poor" households 22.1 percent, of which "very poor" (food deficient) households represented 4.6 percent. If lower-middle households were taken to be "relatively poor households," poor households, including both absolutely and relatively poor in the Vietnamese countryside, would account for 45.4 percent. Comparing the average incomes of the "getting rich" (top 20%) to the "poor" (bottom 20%) in rural areas, the ratio was 5.5 percent.

Obviously, social stratification in terms of both household incomes and living standards is an inevitable outcome of the process of shifting to a market economy. In Viet Nam today, land is still regarded as being under "all-people ownership," and the peasants enjoy the right to stable, long-term use of land (not exceeding the ceiling set for each region). Moreover, the market economy is still under state management and regulation, so that social stratification is basically not due to the "expropriation and pauperization of the majority" of poor people to concentrate wealth in the hands of a minority of rich people. The present social stratification is essentially due to the renovation policies, under which a portion of the population (thanks to favourable conditions regarding funds, labour skills, knowledge, and experience) is able to work harder and create new production and business activities. They can, therefore, generate higher incomes and enjoy higher living standards, while the socioeconomic situation of many other people is slow to improve, has stagnated, or is even going backward.

Compared to other countries in the region, the ratio of absolutely poor households in Viet Nam is fairly high. In 1990, it was 10 percent in China, 15 percent in Indonesia, 16 percent in Thailand, 21 percent in the Philippines; while in Viet Nam in 1993 it was over 22 percent. However, from 1987 to 1993, the ratio of absolutely poor households declined from 35 percent to 22 percent, and that of relatively poor households from 60 percent to 45.4 percent. On the other hand, in remote, out-of-the-way regions and localities, or those afflicted by natural disasters, the ratio of absolutely poor households went up to 40-50 percent, of which 5-8 percent were very poor (i.e. faced chronic food deficiency for three to six months a year), and these households had to regularly depend on state assistance to meet their basic needs.

The results of our investigation into the causes of poverty among rural households suggest the following main conclusions: (a) 70-90 percent (of all investigated households) said they were poor due to "lack of funds"; (b) 50-60 percent for "having too many children"; (c) 40-50 percent for "lack of knowledge"; (d) 10-30 percent for "lack of land and employment"; (e) 10-15 percent for "accidents or illness"; (f) 5-6 percent for "laziness and being spendthrift"; and (g) 2-3 percent for "social vices" (Center for Population and Labour Resource Studies 1993, p. 17). Thus lack of funds, large family size, and poor knowledge were among the main causes reported for persistent poverty.

Since the start of renovation, particularly during the 1991-1995 plan period, the public authorities at various levels, communities, and mass organizations have sought to implement two tasks to ensure adequate economic growth closely linked with equity and social progress: (a) to stimulate and create favourable conditions for all economic sectors and families to "get rich" in a legitimate manner, as this is considered a necessity for the process of economic growth; and (b) to make the best efforts to eradicate hunger and alleviate poverty, to reduce the gap between rich and poor, and to create social harmony, unity, and stability for development.

Along with a wide range of nationwide measures, such as the programs for population and family planning, and support for job creation, sedentary farming and settlement in mountainous regions, the government has, since 1991, also promulgated several policies directed to hunger eradication and poverty alleviation in rural areas. These include Ordinance 14/CP (1992) on the founding of agricultural banks to give loans to peasant households for agro-forest-fishery development; Decision 72/CP on the free supply of four essential items (lamp oil, medicine, school paper, and iodized salt) to the mountain people, and Decision 525/TTg (1995) on the founding of banks in the service of poor people, with preferential interest rates and no demand for mortgage collateral. Campaigns to build what were known as "sympathy" school classes, and "loyalty" houses, and to establish credit funds to make loans to poor women at zero interest, have also been initiated by the mass organizations in numerous localities.

The effectiveness of these measures, however is handicapped by a lack of trained working staff, a shortage of funds, cumbersome lending formalities, and rigid debt terms incompatible with the productive cycles of crops and livestock breeding. Above all, the self-interest of the staff of the agricultural banks and banks in the service of poor people are often in contravention of the declared objectives of these banks. That is, the more loans that are given to the poor, the lower the rate of profits obtained by the banks, and thus the smaller the bonuses received by bank staff. Loan disbursements to peasant households have thus increasingly been sidetracked to a lower priority at a number of localities than was originally intended. This is a real obstacle which must be removed as soon as possible in the organizational mechanism for policy implementation.

The results of our case studies point to several common traits in the general situation in rural areas, and, at the same time, also reveal particular attributes in certain localities. In Tuong Giang and Phong Khe communes, for example, thanks to the vigorous development of several small- and handicraft-industries and trade and service activities alongside farming, the average monthly income per capita for most categories of household in these two communes was generally higher than for corresponding households in the country as a whole. A number of households were far advanced, possessing working capital of hundreds of millions of VND, and earning monthly incomes of 2-3 million VND per capita. These include some owners of limited liability contracting companies in Tuong Giang, employing over 300 workers, and about 20 owners of workshops for recycling paper in Phong Khe, each involving 15-20 workers. The average monthly wage for workers in these economic units was about 300 000 VND. The living standards of households in these communes, in terms of accommodation and household appliances, was also notably higher than in many other localities. The main reasons deduced from survey responses for the emergence of so many well-off households in these two communes were as follows: (a) 46-63 percent cited "ingenuity" (engaged in small- and handicraft-industries, trade and services other than farming); (b) 54-56 percent suggested access to "adequate funds"; and (c) 15-29 percent responded that they had an "abundant work force."

In Tu Ly commune, in contrast to the two communes in the plains region, social stratification was almost negligible. There were almost no "getting rich" households; the upper-middle households with average monthly per-capita income of 145 000 VND made up 17.3 percent of the total; 27.3 percent were middle households with 95 000 VND; 25.3 percent were lower-middle households with 57 000 VND; and absolutely poor households with 40 500 VND represented quite a high ratio of 30.1 percent (of which 6.7 percent were food-deficient households). The reasons given as explanations by the poor households were mainly: (a) lack of funds, (b) lack of employment, and (c) lack of skill or information in their occupation, or knowledge other sources of livelihood.

From the above summary of our surveys and analysis, we can suggest some possible solutions whereby government policy and the efforts of other agencies might seek to reduce or remove the main causes leading to poverty. It is to be hoped that through such efforts, Viet Nam can achieve the objectives of eradicating hunger and of reducing the present poor households by 50 percent by the turn of the century, as envisaged in the 1996-2000 socioeconomic development plan.
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[1]  Indonesians also refer to their country as "land and water” because the sea envelops its 17 000 islands.  < BACK >

[2]  According to other estimates, the forest cover in 1943 was 57.5 percent of the total area of Viet Nam, equal to around 19 million hectares.  < BACK >

[3]  Government of Viet Nam, Decision 327/CP (Sept. 1992), implemented from 1993.  < BACK >

[4]  Examples of insecticides include organophosphates, organochlorines, pyrethoids copper sulfate, zinc, and phosphate.  < BACK >

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