Behind Vietnam’s Agriculture Productivity Growth
This is the 5th article in the Crops in Southeast Asia series.
Vietnam’s performance in its primary crops[i] production has been quite attractive, growing to become the country with the second-highest primary crops yield in the region. The question is how did Vietnam achieve this 89% growth in primary crops yield from 1961 to 2018. In today’s article, we will take a closer look at the agriculture sector in Vietnam.
Similar to other countries in the region, Vietnam has been witnessing a decline in its employment in agriculture. Its share of gross domestic product (GDP) of the value-added from agriculture, forestry and fishing has also been declining since the 1960s yet the country was still able to achieve a trade surplus of US$ 8.72 billion from the agriculture sector in 2018. The overall agro-industry will likely continue to expand, accounting for about 25% of total GDP by the early 2030s.[ii]
After the end of the Vietnam War in 1975, food shortages in the 1980s have pressured the government to develop Vietnam’s agriculture. Public expenditures were directed towards research, irrigation, infrastructure, and input production facilities.[iii] Vietnam’s agriculture sector eventually undergone a reform, allowing farmers to sell surpluses after meeting their quotas. In 1981, its collective agricultural production system became history and the state introduced a new group-oriented contract system of production. In 1986, the contracts were converted into individual contracts under the “Doi Moi” policy.[iv] The privatization of the agriculture sector boosted productivity since farmers have more incentives to produce more crops, allowing Vietnam to improve its agriculture productivity.
For most of Vietnam’s crops, their yield increase more significantly than before after the 1980s (double click the items on the legend to view the items you want to observe). Such an improvement has relieved the country’s food shortages issue and allowed Vietnam to compete in international markets. For the past 30 years, Vietnam has been actively involved in expanding its international reach via various bilateral and multilateral trade agreements. Besides rice, processed foods were also exported to the rest of the world, allowing the country to develop its agro-industry and break away from its rice monoculture.
Despite significant improvement in agriculture productivity, Vietnam still faces the issue of inefficiency and unsustainability in its agriculture. Since the development of its agriculture sector is highly dependent on exports, multinational agricultural corporations gained the most from cheap labour and lax environmental regulations.[v] Farmers and local consumers were not able to fully reap the economic welfare of agricultural growth. The issue of resource efficiency is also put into question due to unsustainable agricultural practices such as tapping wetland resources for quick money, leading towards the destruction of the delicate wetland ecosystems in the country. The breadbasket of Vietnam, the Mekong Delta, has been facing challenges like over-exploitation and salt-water intrusion.[vi]
Vietnam’s strong performance in agricultural yields and trade outshines its gain in efficiency and welfare. Most of its growth is from expanded or exploitive use of natural resources, labour and chemicals, putting its environment at risk. The government has aimed to increase agricultural efficiency and competitiveness with the 2014 Agricultural Restructuring Plan (ARP) by making its agriculture sector inclusive to all stakeholders. The monitoring of agronomic practices, resource management, waste management, and energy management will be the focus of building eco-friendly agriculture for Vietnam.
[i] Vietnam’s primary crops include Anise, badian, fennel, coriander, banana, dry beans, berries, brassicas, cashew nuts, cassava, castor oil seed, cauliflowers and broccoli, chillies and peppers, cinnamon, coconuts, green coffee, fibre crops, fresh fruit, groundnuts, jute, maize, onions, pepper, potatoes, pulses, paddy, natural rubber, cotton, sesame seed, soybeans, sugar cane, sweet potatoes, tea, tobacco, vegetables.
[ii] World Bank, “Transforming Vietnamese Agriculture: Gaining More from Less”, Vietnam Development Report, 2016, Washington, D.C. World Bank.
[iii] Nguyen Van Giap, “Vietnam’s agricultural sector at a crossroads”, East Asia Forum, 28 Nov 2019, Accessed 5 Feb 2021, URL: https://www.eastasiaforum.org/2019/11/28/vietnams-agricultural-sector-at-a-crossroads/
[iv] Jeffrey Hays, “Agriculture in Vietnam”, Facts and Details, May 2014, Accessed 5 Feb 2021, URL: http://factsanddetails.com/southeast-asia/Vietnam/sub5_9g/entry-3480.html#chapter-10
[v] Nguyen Van Giap, “Vietnam’s agricultural sector at a crossroads”, East Asia Forum, 28 Nov 2019, Accessed 5 Feb 2021, URL: https://www.eastasiaforum.org/2019/11/28/vietnams-agricultural-sector-at-a-crossroads/
[vi] Jeffrey Hays, “Agriculture in Vietnam”, Facts and Details, May 2014, Accessed 5 Feb 2021, URL: http://factsanddetails.com/southeast-asia/Vietnam/sub5_9g/entry-3480.html#chapter-10
