The government should pay proper attention to agriculture and rural development instead of only concentrating on industrial and urban development, one expert has said.

A farmer is harvesting rice in the Mekong Delta region

Dr. Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD), made the proposal at a recent seminar “Iphone or Irice – Options for Vietnam’s sustainable development” in Hanoi.

According to him, the country’s investment in agriculture has been inefficient due to backward ideas and improper policies. Over the past years, more attention has been paid to industrialisation and urbanisation at the expense of agriculture and rural areas.

Such direction, he said, has been blamed for low agricultural labour productivity, reaching only approx USD800 per person per year in 2008, compared to nearly USD1,600 in China, USD1,800 in Indonesia, USD2,000 in the Philippines and nearly USD2,200 in Thailand.

GDP growth rate in the country’s agriculture had fallen to around 4% per year in 2012, down from nearly 7% per year in early 1990s.

He said industrialisation, urbanisation and globalisation have put people in Vietnam’s rural areas at risk, while threatening natural resources, increasing waste, worsening natural disasters as a result of climate change, soil erosion, as well as resulting in unequal competition.

Millions of workers from rural areas have migrated to urban areas to find job. Over 70% of such people work in unofficial sectors as domestic help, builders and motorbike drivers.

Such development trend has driven Vietnam to a medium-income trap. This would result in urban overcrowding, underdeveloped rural areas, inefficient industry and services, uncompetitive agriculture, social and political contradiction, natural resources losses and environmental pollution.

Future of Vietnam’s agriculture

Despite the risks and challenges, Vietnam’s agriculture has recorded magical gains as it always reports trade surpluses despite national consecutive trade deficits, especially in industrial production.

Dr. Son said that the new trend for the country’s industrialisation is to invest in agriculture and rural development as well as empower farmers from the beginning of the process.

“The process of empowering farmers in Vietnam is rather slow. It would be a good idea if we do it right now but would be too late if it takes from five to ten years more,” he assessed.

He suggested that the country learn from experience of some countries like Taiwan and South Korea that have focused on agricultural and rural investment, combining industry with agriculture, urban with rural development.

“In the future, Vietnam may not become the world’s factory like China but may become something like a kitchen, a flower garden, a vegetable garden and a herbal medicine garden of the world if it pays enough attention to agricultural and rural development,” Son emphasised.

The country should adopt measures to encourage foreign investment in agriculture as recently around 15 trans-national groups were seeking opportunities to invest in the industry.

The government should pay more attention to science and technology as well as industrial development to serve agriculture. Market research, product quality management, food safety and control over input materials should be taken into account to support farmers, he said.

He suggested that the government directly grant funding to farmers to foster their business instead of indirect support via banks and exporters as currently.

At a seminar on Vietnam’s economic 2013 and challenges in late April, several experts agreed that amid low economic growth rate, the country should pay more attention to agricultural investment as such industry may help save the national economy.

An official from the World Bank said at a seminar on potential for public-private partnership (PPP) in Vietnam’s agriculture that it’s right time for Vietnam to change the way to attract more domestic and foreign investment in agriculture.

“In order to increase labour productivity for Vietnam’s agricultural sector, PPP programmes are of great significance in all national agricultural development strategies,” he added.

Economist Pham Chi Lan said government-funded agriculture projects have proven to be inefficient as the government has acted as policymaker, law maker and conductor.

In order to attract investment in agriculture, the government should work out new and more suitable policies so as to increase agricultural export values, she added.