Vietnam Partnership for Human Resource Development for Rural Areas ( VietDHRRA )

Vietnam Partnership for Human Resource Development for Rural Areas ( VietDHRRA )

Report of AFTA research

Impacts of AFTA to small producers of agriculture

in Vietnam

Hanoi 2004

I. General information

II.Research results

III.Key findings

IV.Main proposal approaches

I. General information :

1. Agriculture of Vietnam :

Contribution 23% of GDP Using 70% of Laborers Exportation 2004 reached 5.4 Billons USD which

Among the world market exporters : - Rice is ranked second - Coffee is ranked second - Black pepper is ranked first

2. Vietnam to AFTA

- Signed officially the key agreement on15th.Dec.1995

- The agreement came to force 1st. Jan. 1996

- Commitments :

+ 91% of agro-product taxing-lines are cut down

+ The averaged tax of imported agro-products is 6.9% ( highest 20% )

+ From 1st.Jan.2006 onward all are cut down to 0-5%

+ Sensitive agro-products are cut down in 2010

3. Vietnam to WTO :

- In June 1994 was recognized to be GATT observer

- In April 1995 WTO received application form to be

member

- In January 1996 WTO formed the Vietnam Committee

which consists of 40 members

- In August 1996 submitted memorandum on foreign

trade

- Answered 2,600 groups of questions concerning economic-trading policies

- Bilateral and multilateral negotiations are going on

4. Research method and procedure :

- Selected crops : rice, corn, coffee and cashew-nut

- Selected Localities : Thai-Binh province in the North, Dac-lac province in the Central Highland, Dong-Nai and Binh Duong provinces in Northeast Mekong delta and An Giang province in Mekong river delta.

- Conducted 265 small farmer interviews chosen by random, 23 farmer group-focused discussions, 19 local leader interviews, 10 case studies.

- Table and field works followed SEACON guildline

- Data processing used Microshop Access

Selected localities for surveying

II. Results of study :

1. Small farmers' education level :

- most of men and women went to school for 5-6 years

- 61.3% completed primary school, 32.3% secondary school, 5.1% high school, 1.4% technician and 0.9% having university degree

- Rice and corn growers have education level higher than coffee and cashew-nut growers

- But only 51.2% was trained of technologies and only 26.5% of knowledge learnt being applied to production

2. Small farmers' living conditions :

- 91% said they have houses but 49.4% of which is simple and temporary, 9% does not have houses of their own

- 37.9% said that they use rain water, 31.3% uses shallow well water, 28.4% uses stream, river, pond or lake water, only 7.5% have drilled-well and pipe water

- Most of household-families use pit latrine, some use water-flushed or double-vault latrines. 12.3% does not have latrine any how.

3. Small farmers' production conditions :

3.1. Arable lands :

- 98% said they have lands of their own, 90% lands has been allocated to farmers for long term use, 82.6% households said land-using right belong to both husband and wife

- 32.3% lands are taken after, 30.2% are exchanged, 30.6% are bought, 23.4% are from slash-and-burnt

- Rice and corn growers have lands lesser than Coffee and cashew-nut growers ( in average : rice 1.12 ha per household, corn 1.17 ha, coffee 1.74 ha and cashew-nut 2.28 ha respectively )

- 64% said they need more lands for their production

3. Small farmers' production conditions continued :

3.2. Fertilizers :

- Only 22% said they use manures together with chemical fertilizer, 100% said they use chemical fertilizer and insecticides

- 66% said the quantitative of chemical they used for the past10 years increased.

- Fertilizer takes major part of production costs : rice 35-41%, corn 30-37%, coffee 42-48%, cashew-nut 25-33%

- 88% said that prices of fertilizers and insecticides increased 100-150% for the past 5 years

3. small farmers' production conditions continued :

3.3. Capital :

- 67.6% said they are lacking of capital for their production of which rice 69.5%,corn 69.6%, coffee 60.0% and cashew-nut 70.5%

- 93% said their own capital can meet only 30% of demand, 43% said their own capital can be considered " nothing "

- 61% said they had opportunities to borrow money for production for the past 10 years of which rice 32%, corn 88%, coffee 79.3% and cashew-nut 68% respectively

- 91% said that they can pay back in time, 9% said they can not

3. Small farmers' production conditions :

3.3. Capital continued :

- 69.3% said they borrowed one time per year of which mainly coffee growers, 30.7% said they borrowed twice per year of which rice 81% and corn 72%

- 83.9% said they borrowed from banks, 21.9% from their native, 8.2% from money lenders, 3.3% from small credit organizations, 2,7% from their friends, 1.5% from private traders and 3.6% from material suppliers

- 87% said that they hardly access to possible resource of which 41 % said they can not borrow meney from the banks.

3. Small farmers' production conditions continued :

3.4. Other requirements of production ;

- 56% said they lack of farm tools and machines

- 68% said they have to hire farm tools and machinery with high costs for 30-65% requirements, especially in the planting and harvesting periods

- 61% said they meet with difficulty in buying electricity, water and gasoline for production

- 31.2% said they hardly can get timely fertilizer and insecticide

- 51.2 said that they were trained of technologies concerning their production, but only 26.2 said that things learnt can be applied

4. Small farmers' product consumption :

- 51% said private traders are their product onsumers,19% state companies, 27% co-operatives, the rest are other farmers, material providers, money lenders

- 81.2% said their products are simply processed ( mainly dried and classified )

- 66.5 said they do not have enough storage tools for their products before sending to the market

- 67% said they sell their products for cash, 38% exchange for materials and 22% for mortgage

4. Small farmers' product consumption continued: - Only 46.2% said that they officially contract for consuming their products and supplying materials - 28.5% said they are forced to sell their products

at low prices - 43.8% said that they are substantially damaged in consuming their products for the past 10 years

- 68% said for the past 5 years prices of agro-products increased not so much while that of coffee decreased by 150-250%, prices of production materials increased 80--170% caused their losses, even some cases have given up their production.

5. Small farmers' requirement for supports :

- Rice growers : 87.6% for marketing, 64.9% for extension services, 63% for transportation, 62.9% for hydraulic construction, 66% for credit, 29% for technical training and 45% for seed

- Corn growers : 75% for marketing, 80% for extension service, 54% for transportation, 62.9% for hydraulic construction, 66% for credit, 45% for technical training, 56% for seed

5. Small farmers' requirement for supports continued :

- Coffee growers : 60% for marketing, 62% for extension services, 29% for transportation, 49% for hydraulic construction, 41% for credit, 32% for technical training, 21% for seed

- Cashew-nut growers : 85% for marketing, 84.8% for extension services, 63% for transportation, 19.6% for hydraulic construction, 93% for credit, 24.4% for technical training and 47% for seed

6. Small farmers' understanding of AFTA :

- 54% said that they know AFTA, of which 33.8% said they only saw the "AFTA" signal somewhere, 18% said AFTA may bring in market possible, 28.3% said they don' t know if AFTA bring profitability or not

- 32.4% said they know something about AFTA through radio, 47.6 % through TV, 9.4% through newspapers, 5.7% through other people and 2.5% through government agencies

- 46% said that they do not know anything about AFTA at all, among these people some are local leaders

III. Main findings

1. Most of small farmers were educated for 5-6 years of which 61.3% primary school, 32.2% secondary school. But only more than 50% was trained technologies concerned .

2. Small farmers are lacking of arable lands though

they were allocated equally lands in " Renovation" movement.

.

3. Most of small farmers lack of capital. Their own funds

can meet only 30% of demands. Their main possible

resources for borrowing are from banks but difficult to

access. 9% can not pay back in time

III main findings continued :

4. Small farmers lack of technologies. Only 51.2% were trained of techniques concerned but only

26% things learnt was applied to production. There

still 48.8% not being accessed to technologies

5. Private traders are main buyers of small farmers' products. State companies take 19% and co- operatives take 27%. In selling and buying only

half of small farmers make official contract with their

partners. They are forced to sell their products at low

prices. for the past 10 years input was increased but

output decreased

III. Main findings continued :

6. Small farmers are lacking of farm tools and machinery, they have to hire costly. They can not get production materials timely and can hardly access to electricity, water and gasoline for their production

7. Living conditions of small farmers are poor. Their

houses are simple and temporary. Drinking water and sanitation infrastructures and facilities are far from enough.

8. Most of small farmers are knowing little or not knowing AFTA. If they do it is chiefly through radio and TV. Government agencies do not pay due attention to introducing AFTA to farmers

IV. Key proposals : :

1. Focusing on crops and animals which give high yield and good quality through intensive cultivation and breeding. Priority should be given to organic-generated and secure products. Supporting policies for good quality of agro-products are necessary.

.

2. Renewal of investment policies. Priority is given to productions and products which have comparative advantages. More investments for products which are exportable.

IV Key proposals continued :

3. Speeding up and strengthening post harvest activities, developing processing industry and transferring new and appropriate technologies to production and processing of agro-products.

.

4. Fostering extension service system which have farmers'

participation, combining new technique with indigenous

and traditional knowledge and farmers' experiences.

5. Improving credit system in rural areas, helping small and poor farmers to access to possible resource of loan

IV Key proposals continued :

6. Developing off-farm activities in rural areas to help small and poor farmer increasing incomes, developing lands by reclamation and improvement of virgin and barren areas to have more lands allocating to small and poor farmers who are now landless or land-lacking, protecting and planting new forestry, safe-guarding biodiversity.

.

7. Helping farmers, especially small and poor farmers, to

thoroughly understanding AFTA, knowing exactly what

are positive or negative impacts to their lives and their

production, overcoming difficulties by their internal

forces not depending much on external assistances.

Thank you very much for your attention !