Impacts of alternative policy options on the agricultural sector in Vietnam

• International Rice Research Institute, Philippines
• Hanoi Agricultural University, Vietnam

Until 1980, the agricultural sector in Vietnam was collectivised. Most land was cooperatively used, and only 5% was left for individual household use. Farm decisions were made by the central government, which set areas and targets for each of the crops produced by the cooperatives which ran the farms. There was strict control over what farmers could do.

As a consequence of this system, rice production fell short of population growth, leading to serious food shortages. Since 1981, the government has been implementing economic reforms to 'decollectivise' agriculture. These new policies have had considerable effect, and Vietnam is self-sufficient in rice and has become the world's third largest exporter.

However, the impacts of the new policies at the farm level, on factors such as household incomes, land use, credit provision and taxation, are important questions that have had little investigation.

One of the reasons is that Vietnam lacks key personnel with experience in policy design and analysis under a market-orientated economy. However, Australian agricultural economists have considerable expertise in resolving the socio-economic problems that arise during the development process.

Accordingly, this project will use Australian experience to assess the impacts of the new government polices on land use in the agricultural sector during the transformation to a market-based economy. In the process, it will deliberately provide opportunities for teaching Vietnamese staff and researchers to develop their skills in agricultural policy research, formulation and analysis.

The main aims are to assess the impacts of the Vietnamese government's new policies on agriculture and to provide economic models suitable for analysing policy reforms.

The project will start by preparing relevant documents and an overview paper for all team members to clarify current institutional structures and rules relating to land use.

The main part of the project will involve data collection via farm surveys, followed by analysis and then the development of a comprehensive model. After testing and revision, the model will be applied to policies of land consolidation, inputs and outputs, supportive policies (such as taxing and credit arrangements), and land use flexibility.

For each of the four areas analysed by the model, technical and discussion papers will be produced and will then be brought together. Throughout the project there will be training workshops, seminars and meetings. The workshops will be for the benefit of officials from the various ministries involved in agriculture and also for academics researching agricultural policy analysis.

The project outcomes can be considered in three categories:
capacity development
a variety of documented policy-oriented models
research publications with a policy focus

The following list highlights the major project outputs.
Six policy analysis training courses were held, each of approximately five daysfour funded within the ACIAR project (135 participants) and two funded by the associated CARD project (52 participants). The training provided new perspectives on quantitative policy analysis, enhanced computer skills, upgraded analytical capacities, provided new teaching materials and encouraged exchange of ideas between staff of the various institutions. Participants came from Hanoi Agricultural University (HAU), various departments within the Ministry of Agricultural and Rural Development (MARD), and other universities and institutions in northern, central and southern Vietnam.

A substantial amount of the training course material on quantitative policy analysis was translated into Vietnamese then made available as hardcopy and on CD-ROM and widely distributed. Training course material included a range of documented models suitable for teaching techniques for quantitative policy analysis.

The comprehensive household survey of 400 farm households in four provinces (Ha Tay, Yen Bai, Binh Duong and Can Tho), completed over two successive years 2001 and 2002, resulted in a large and rich database of land holdings and land use, agricultural production at the household and plot level, labour and credit use, as well as data on farm and off-farm income.

Two successful international workshops were held in conjunction with the project. The first was held at the University of Sydney in November 2002, on the topic 'Land Use in Vietnam: Policy Issues and Research'. A final project workshop, attended by a number of senior policy makers, academics and officials of non-government organisations, was held in Hanoi in February 2004, on the topic 'Land Policy and Agricultural Development in Vietnam'. Project team members presented papers on topics including land fragmentation, land consolidation, the market for land-use rights, land-use flexibility, farm incomes and farm size, price policies, supportive policies and credit use; and a number of papers were also given by external presenters.

An interview with 10 senior Vietnamese policymakers was conducted in November 2003. The specific aim of this work was to assess the attitudes of policymakers to current and further land policy changes, and their attitudes to the pace of change and the market for land use rights.

Publications from the project to date include two refereed journal articles, two consultants' reports, four project reports to ACIAR, four project discussion papers (on the topics of Land Use Flexibility, Land Consolidation and Accumulation, Tax and Credit Policies and Agricultural Land Use, and Input and Output Price Policies), nine conference papers, and numerous workshop and working papers. Further papers will be submitted for journal publication in the near future.

A set of four policy briefs was prepared for distribution at the final project workshop. Topics of the policy briefs were:
The value of agricultural land and land-use rights in Vietnam
Land fragmentation in north Vietnam
Interest rate policy changes
Taxes and agricultural land use