Vietnam has undergone significant economic growth in recent years and is expected to achieve 'middle income' country status in 2009-10. Much of the significant economic growth in agriculture (and the rest of the economy) is due to market competitiveness and demand for exports. Foreign direct investment is also growing rapidly. However, the income figure is biased by comparative wealth in Ho Chi Minh City and Hanoi and there has been little trickle-down to the rural areas, with many farmers remaining on incomes of under $1-2 a day. There has also been little mobilisation of foreign direct investment or of urban savings into the agriculture sector.

Unlike other South-East Asian countries with similar populations, Vietnam will continue to have a comparatively high percentage of rural population over the next decade, and so issues of rural poverty and structural adjustment remain at the top of the policy agenda. Productivity on a land or labour basis is still very low, and the small scale of production on individual farms, fragmented land holdings and increases in input costs are significant problems. Ethnic minority groups and groups in remote regions are particularly being left behind, and the Vietnamese Government is providing greater focus on programs to assist these groups.

Increased economic integration arising from both bilateral and multilateral trade agreements poses both threats and opportunities. There is a move from a focus on increasing production volumes of agricultural products for export to a greater emphasis on quality and marketing for both domestic and export destinations.

ACIAR's involvement in Vietnam commenced in 1993 and a significant program in forestry, land and water resources, animal sciences, crop sciences, fisheries and postharvest technology has been developed. While training remains very important, the program has evolved from a predominant emphasis on capacity building to one of practical farmer and rural development impact. Some successes include improvements to rice-shrimp farming, integration of mangrove forestry and shrimp production, improvements to inland pond and small reservoir culture fisheries, introduction and dissemination of improved pig breeds, non-chemical rodent control in rice crops, fastgrowing acacias, introduction of improved acacia forest germplasm, better irrigation management, improved soil fertility management and better control of citrus pests. Some of the technologies arising from these projects were applied and capacity developed in R&D and extension through the AusAID Capacity Building for Agriculture and Rural Development (CARD) program.

A number of ACIAR projects in Vietnam concluded during 2007-08. This enabled the program to undergo redesign for greater strategic (including geographic) focus. During 2008, reshaping of the program to address a limited number of major areas where Australia has expertise will continue. New programs addressing management of soil and water constraints for improved incomes in south-central coastal Vietnam and development of high-value agricultural products from mountainous north-western Vietnam will be developed, to address socioeconomic and marketing issues as well as specific technical constraints. Working in southcentral coastal Vietnam enables mobilisation of Australian technical expertise in managing constraints of poor soil fertility and limited water, while Australian expertise in temperate agriculture (including horticultural and livestock production) will be valuable in north-western Vietnam.

ACIAR will also continue to seek greater involvement of the private sector and NGOs in projects, linkages with other R&D activities and donors, and development of closer linkages between central Vietnamese research organisations and province-based research and extension capacity. Our program aligns with the Vietnam Government's 2006-10 Five-Year Agricultural and Rural Development Plan, particularly the first strategy (improvements of agricultural productivity, product quality and marketing) and second strategy (development of processing for agricultural and forest products).

ACIAR also aligns with the Paris Declaration and Hanoi Core Statement by integrating its work closely with Government of Vietnam programs and other donors wherever possible.