According to Prof. Vu Trong Khai, we are facing a recession in agriculture. As earnings from agriculture are not enough for living, farmers have to abandon farming to go to the city to do anything that does not require any skill but still brings higher income than farming. However, the life of farmers living in urban areas and industrial zones is still very precarious and their living standards are poor.
As agricultural population creates less than 20% of the country’s GDP, they can benefit within that number. GDP per capita in rural areas is only $200 compared to the national average of $1,600/person.
According to a survey by the Institute of Policy and Strategy for Agriculture and Rural Development, the average income of a farmer household with four members is VND60,000/day ($3), below the poverty line.
Up to 47.4% of farmer households are not satisfied with the present life; 50% of households have debt, of which only 13% have access to bank loans and the remaining 87% have to borrow from loan sharks. The annual savings rate is only VND5-8 million/household, of which 80% of savings is for hedging.
Thus, a vicious cycle goes on. Productivity is low, then income is also low; income is low, then savings is low; savings is low, then investment in agriculture is small; investment is small, then productivity is low...
Thus, the achievements of agriculture and the tremendous role of agriculture as the "pillars" of the economy obscured the hardships of the farmers. They have had to sacrifice too much.
Mr. Khai believed that agricultural renovation is actually "liberalization" which helps promote existing potential. Like a tightly compressed spring, when it is released, it springs up and after springing up it returns to the original state.
In other words, the efficiency of Instruction 100 and Resolution 10 on agricultural renovation expired after a period of time because they could not provide the ability to grow in quality.
Going deep inside, we can see that we have to “untie" policies but we lack “promoting” policies. The "promoting" policy is totally different from the "untied" one. The promoting policy’s role is to bring the development to a new level, improve quality, increase competition to meet increasing requirements of the market.
Therefore, the "promoting" policy should be planned with a scientific and practical basis, requiring policy makers to not only have conscience and courage, but more important, wisdom.
Practices always change so policies have to change to adapt to the change in real life. In the context of international economic integration, they must understand WTO rules and international practices. Subsequently, the policy implementation capacity of the public administration and civil servants must be improved.
On the other hand, the conscience and courage of policy makers is shown through avoiding influence of interest groups so as not to sacrifice the interests of farmers.
Policy making and implementation in Vietnam are still passive.
With a small production scale, on average each farmer household has only 0.8 hectares of land. Their cultivation techniques and equipment are poor and outdated. Farming is still a “hereditary profession. The processing and trading of agricultural products have not changed much compared to the past. The economy in general and agriculture in particular are involved in the global value chain with the weak position.
With low added value, more deeply integrating into the global market, and increasing negative socio-economic and environmental consequences the country’s agriculture has brought, the poorer Vietnamese farmers have become.
Inadvertently, Vietnamese farmers are "subsidizing" in terms of price and "environmental fee" for the people of the countries importing rice and agricultural products from Vietnam. The more rice we export, the poorer our farmers are and our environment is more polluted. Our farmers and agriculture are reluctantly doing "international mission on food security" because of institutional defects and outdated technology in the era of globalization.
Why have we fallen into this situation? Mr. Khai said there are many reasons. On the macro level, after accession to the WTO, we did not take advantage of global integration. In contrast, we have been affected by the negative impact of globalization.
At the micro-level, the important "cause of all causes" is that we are missing professional agricultural administration. In other words, our institutions have not formed a team of professional farmers specialized in large-scale production.
Just imagine this to be clear. A farmer who has only several hundred square meters of land does not need cooperation with businesses to join the production chain. Because his production scale is too small, he does not need to know signs from the market. He only knows what traders tell him. Moreover, with that small piece of land, he cannot apply modern technology to production.