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: sbc.pte@gmail.com, provisionally. Many thanks.
No comments:
Post a Comment