Economic experts from ADB suggested that Vietnam should identify which products are competitive and non-competitive in order to set suitable policies.

Cotton production was one area that has come under scrutiny by experts. Despite slowing of plantation growth in 2002, cotton plantations are still relatively large compared to area reserved for other kinds of crops, while profit margins are tight.

Cotton plantations increased by 144% compared to 2001 in the north, and 88% in the south. However, the average yield in the north is 810kg/ha only, while the figure is 120kg/ha in the south. The conclusion was drawn that cotton planted in the south is competitive against Australian cotton, yet northern product is not.

Rice production was cited by economists as being of very low efficiency. Thai farmers work average yield of 2.5 tonnes/ha from their winter crop, while Vietnamese high-yield rice can give 4-5 tonnes/ha. However, Thai farmers do not have such high irrigation and fertiliser costs, as they have better natural conditions. Vietnamese farmers have to pay dearly for these input materials. Production cost of Thai and Vietnamese rice is the same. However, Thai rice sells at higher prices thanks to the superior quality of the product. Thai farmers therefore obtain higher profits than Vietnamese farmers can per unit of cultivated surface.

World Bank experts asserted that in order to improve the situation, Vietnam has to resolve some basic issues, including land cultivation and immigration. The so called ‘land agglomeration’, (i.e farmers gather their small land plots into a mass to create bigger cultivated surface), according to experts, is a good tendency for Vietnam, but is not good enough. They have advised strengthening and supporting trade promotion through associations.

According to Prof. Vo Tong Xuan from Can Tho University, the State should adjust the current policies so that farmers can gather under multi-functional cooperatives, combining into large farms that would be more powerful and competitive.

While not denying the effectiveness of the current solutions aimed at easing the negative impacts on farmers, both ADB and WB have drawn the same conclusion that the measures do not bring much efficiency.

The government needs to protect farmers in the post-WTO period by laying down a suitable legal framework that can help develop animal husbandry, and create favourable conditions for the farmers to associate with each other in production to create profuse goods.

(Source: DDDN)