Vietnam mulls pooling farmland to boost productivity: official

By    September 11, 2016 | 10:31 am GMT+7

Combining small-scale farms could be the key to unlocking the sector's potential.

Vietnam's Communist Party will issue a policy to push for large scale land acquisitions as well as cooperative economy in the agricultural sector, said Nguyen Van Binh, head of the Communist Party’s Commission on Economic Affairs.

Productivity growth in Vietnam’s agriculture sector has been slower than most countries in Southeast Asia since 1990, Binh said Friday at a workshop in Hanoi. 

The sector has long relied on high intakes of labor and capital to maintain its momentum, said Binh. However, this kind of intensive farming is no longer profitable, he said.

Binh compared productivity growth in Vietnam’s agricultural sector from 2000-2013 that hit an average of 3.4 percent to the average growth rate in China and South Korea from 1980 to 1995 that hit 7.5 percent.

Under mounting pressure from foreign rivals, Vietnamese farmers will need to expand their businesses by improving production volume and capacity, which naturally requires agricultural land.

“We can no longer rely on household farming,” said Binh.

He highlighted the role of agricultural cooperatives and enterprises that can boost productivity through large-scale investments.

Vietnam’s fragmented farmland has dampened the overall efficiency of the country’s agricultural production.

Government statistics show that 75 percent of farmers in An Giang, which is one of Vietnam’s largest rice-growing provinces, cultivate less than one hectare (2.47 acres) of land.

Experts say it requires more than 3 hectares of farmland to maximize productivity and remain profitable.

“The first step that we need to take is to consolidate small lots into larger ones. By doing so, we will build investor confidence in the agricultural sector,” Binh continued.

Statistics show that farmers in the Mekong Delta utilize about 100,000 tons of pesticides and more than 2 million fertilizer each year. Scientists say that these figures can be cut by half with large-scale farming.

The Mekong Delta, also known as Vietnam’s rice bowl, accounts for nearly half of the country’s annual rice production.

Fragmented production has also caused losses during rice harvests. It is estimated that post-harvest rice losses may be as high as 25 percent per year in the Mekong Delta. To put the figure in perspective, Vietnam loses about VN25 trillion ($1.1 billion) per year due to post-harvest losses.

“Favorable government policies will certainly draw private businesses into the agriculture sector. Their investments will lead to large-scale mechanized farming,” Binh said.

Only about 1 percent of foreign direct investment is flowing into the agricultural sector, said the Institute of Policy and Strategy for Agriculture and Rural Development.

According to a report by the Agriculture Ministry, only 1 percent of enterprises in Vietnam invested in agriculture last year, and notably, 85 percent of them were private companies.

The slowdown in Vietnam’s agricultural sector took a turn for the worse this year after it was hit by a prolonged drought and saltwater intrusion. As a result, the agricultural sector recorded negative growth of 0.18 percent during the first half of this year.

Adverse weather conditions have spurred the Vietnamese government to address the situation, and this latest attempt to boost the productivity may have a chance this time.

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