VietNamNet Bridge - The current approach ignores the opportunity cost spent in maintaining rice production as well as income and benefits gained from the pursuit of current competitive advantage of Vietnam.
It should not exaggerate the political, social, economic importance of food security in Vietnam. The famine, food shortages of the 1970s and 1980s have caused impacts on multiple levels. When Vietnam was ranked among the world's poorest countries with the minimum amount of foreign exchange reserves, the food shortage that Vietnam experienced was the major factor for forming policies on food, agriculture and land use after that. Rice accounts for 90% of the food consumed, along with maize, cassava and sweet potatoes.
Currently Vietnam is not in shortage of rice because Vietnam is the world's second largest rice exporter (after Thailand,) with the export output of 5 million tons per year. This figure is equivalent to 8-10 million tons of grain and nearly one fourth of the total national output.
Vietnam has had a relatively stable total supply of rice since the 1990s. However, this fact does not help change anything about the stance on food security policy towards self-sufficiency in rice. In 1998, the Politburo noted that the country's number one goal is "to ensure food security in all circumstances" and to use all economic and administrative measures to ensure the stable area of rice land. The Prime Minister directed the national food reserves to ensure that "the Government's rice reserves to be of good quality to serve national food security, disaster recovery, security and defense objectives and other goals." The responsibility in the maintenance of rice land was assigned to the Ministry of Agriculture and Rural Development and the Ministry of Natural Resources and Environment and other ministries such as the Ministry of Transport, the Ministry of Construction, the Ministry of Industry and Trade.
Caption: Self-sufficiency in rice is not effective approach towards food security.
In 2000, the Government confirmed the policy that considers rice as the basic food to ensure food security as well as national food reserves. The Party Central Committee in 2007 determined to maintain "... sustainable rice land to ensure food security for the country."
This mission is reflected in the program approved by the Politburo in August 2009, to permanently maintain the rice land. This is one of the priorities planned by the Ministry of Agriculture and Rural Development, to "eradicate hunger by 2012."
The basic goal is "... ensuring that the rice output from 39 to 41 million tons a year to ensure food security for the predicted population of 100 million by 2020 and 130 million by 2030."
The Government announced that it would set up the National Food Security Committee, headed by a Deputy Prime Minister, to implement the above program. This committee's mission is to ensure that by 2030 "... Vietnam's rice cultivation area must be fixed at 3.8 million ha, including 3.2 million ha of rice."
Historically, Vietnam’s focus on rice self-sufficiency can be understood as the simple solution to ensure the supply of food for the nation. It is unable to deny the benefits of this policy. When Vietnam has produced a certain amount of rice, the government will not face rice shortages or problems related to food security.
However, if considering this as a public policy, the rice self-sufficiency is not effective and unfair. It is ineffective because it locks land and the already scarce resources (labor, capital and finance) on the land use form of low value. This reduces agricultural yields and slows the country’s growth. Production inputs and technology can create a lot of other products of higher production value than rice as: vegetables, corn, flowers, seafood and livestock.
In the present circumstances, the opportunity cost of rice production is very high: Vietnam can produce less rice and have higher GDP while Vietnamese farmers may have higher income and welfare. Many farmers are aware of this and within their possibility; they are gradually switching from rice to other activities.
Self-sufficiency in rice is not an effective approach towards food security. Despite the huge annual rice exports, many Vietnamese are still short of food, including rice. They are too poor to buy food even if the food supply is abundant.
Vietnam produces millions of tons of rice to sell to foreigners while many Vietnamese (including rice farmers) do not have enough to eat and lack nutrition. According to the World Bank, 37% of children under 5 years old are underweight in the 1990s. By 2000-2007 that number drops to 20%. This is a significant improvement, but if self-sufficiency in rice can really ensure food security, the rate must be nearly 0%.
Food self-sufficiency policy seems unfair. Under this approach, the Government requests a part of the population of Vietnam (mainly rice farmers) to continue to produce rice and this makes them poorer than the level they can achieve if they are allowed to use the existing resources more efficiently. This restriction has forced the poorest of Vietnam continue to support the rest of society in terms of food without any deserved compensation.
No other population groups in Vietnam, for example, defense forces, politicians, civil servants, party officials and unions, or directors of state-owned enterprises are required to sacrifice similar income and welfare. In contrast, the above groups are always paid off for the public services they provide.
Last point, self-sufficiency in rice is detrimental to national objectives in promoting the competitiveness of exports. As a member of the WTO, Vietnam committed to the principles of law in the system of trade and exchange. Self-sufficiency in rice through land use restrictions is inconsistent with those commitments. In fact, Vietnam is in a dilemma when it is sued for protection or dumping. Vietnam maintains the viewpoint of no dumping of industrial products and fisheries products.
The consequences of the pursuit of self-sufficiency in rice--is rice dumping on the world market. These problems can be handled if the Government reduces its commitment to self-sufficiency in rice. This will also include the accepting of the international definition of food security, which emphasizes the availability and access to food. The strategy of self-sufficiency in rice in Vietnam only ensures the availability of food while ignoring access it.
Many international agencies are actively researching the concept of food security and its implications. For example, FAO defines food security as a condition in which "all people at all times have access food supply adequately, safely and nutritiously enough to ensure a healthy and active life. The basic factor here is the availability and quality of food, food supply safe and adequate nutrition, access to sources of supply; economic ability to buy food; and the conditions ensuring food consumers have a healthy and effective life."
This definition has more specific requirements than just self-sufficiency in rice or food. It concerns the entire economy to ensure that all members of society have enough food, including production capacity, circulation system, the ability to re-distribute the wealth of society and policy related to warehousing, food stocks, commodities, foreign exchange and food trade. This also requires the development and implementation of policies to ensure access to food, particularly initiatives to reduce poverty and increase social welfare to enable the poor, especially women, increase their productivity and income.
Self-sufficiency in rice is only related to the supply of a commodity that even plays an essential role in Vietnam, it does not guarantee food security. Moreover, with the changing consumption patterns in Vietnam - can be seen through the increase in imports of products such as flour, milk and meat products - self-sufficiency in rice is no longer an appropriate approach to ensure national food security.
Expanding the definition of food security has two advantages. It emphasizes the availability of all types of food not only rice. This is important because as income increases, particularly in urban areas, consumers will upgrade their meal in a systematic way.
The second advantage is that it emphasizes the ability of individuals and households to access food. This directs official attention to create income and reduce poverty.
Having been discussed previously, the core issue of food security in Vietnam is the problem of poverty. Food supply is pretty full (rice and other food) but there are still large numbers of people who lack income to buy enough food. The rice farmers suffer a major cost in the food security policy of the Government. Growing rice is the most inefficient form of production for poor farmers if they want to increase their income. In some localities, income from rice is so low that farmers abandon fields if they are not allowed to convert land to other purposes. This makes negative impacts on the development of the country, land waste and does not help reduce poverty.
Considering the broader aspects of the food security strategy, it is able to give judgment: if farmers are not forced to grow rice, what is there to ensure food supply to meet demand in the future? Vietnam’s population is approaching 90 million and expected to reach 130 million by 2030. With the country's rice consumption is estimated between 38-41 million tons, and about 60,000 hectares of rice land are converted to other purposes, the rice cultivation area will be reduced.
Rice land decreases also due to the impact of climate change; in particular the sea level rise will cause flooding and reduce the quality of most of the cultivated area of the Red River Delta and Mekong Delta.
Predictions about the loss of agricultural land as mentioned above seem to help emphasize the state’s vision in the long-term plan to maintain paddy land. The problem lies in the current approach that ignores the opportunity cost spent in maintaining rice production as well as income and benefits from the pursuit of the current competitive advantage of Vietnam.
In the future, Vietnam's economic growth depends on the expansion of off-farm activities. Keeping rice land will create large opportunity costs including reduction in income in urban areas, ignoring the opportunity of industrial production, reduction of exports and standard of living of the country. Because of these costs, the pressure to convert agricultural land and paddy land into non-agricultural purposes is growing.
The government can support this pressure through prohibiting land conversion but this does not do anything to reduce the opportunity costs mentioned above.
Opening the economy creates many benefits. It allows Vietnam to increase the national income and accumulated foreign currency. This means the items that have competitive advantage (coffee, rubber, fruits, vegetables, seafood) can continue to generate the income necessary to ensure the import of food for the country (wheat flour, cooking oil, milk, meat and rice, if necessary). Use of trade policy in this way reflects the ability of autonomy in terms of food, and this is the strategy that all developed countries use.
Thus, the suggestions for land policy are very clear. Instead of keeping land rice that make farmers' income reduce but does not solve the problem of food security, the Government should ensure that agricultural land is used efficiently and to the highest efficiency possible. This will help the country have more food, higher incomes for rural areas, continue rapid economic growth and food security.
Ho Dang Hoa, Le Thi Quynh Tram, Pham Duy Nghia and Malcolm F. McPherson
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. Since we are currently changing the platform of www.yourvietnamexpert.com, you may contact us at: email@example.com, provisionally. Many thanks.