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ISSN : 1225-8504(Print)
ISSN : 2287-8165(Online)
Journal of the Korean Society of International Agricultue Vol.29 No.2 pp.103-111
DOI : https://doi.org/10.12719/KSIA.2017.29.2.103

Status of Vietnam’s Agricultural Production, Trade and Policy

Thuy-Luu Thi*,**, Seon-Yeong Im
**, Dong-Jin Lee**, Yong-Hwan Kim**
*Field Crops Research Institute, Hai Duong, Vietnam
**Department of Crop Science and Biotechnology, Dankook University, Chungnam 31116, Republic of Korea
Corresponding author : +82-41-550-3627hidragon@dankook.ac.kr
March 29, 2017 June 20, 2017 June 20, 2017

Abstract

Agricultural production is the most important sector, because it supplies human food, clothing, medicine, employment, etc. In order to promote development as well as investigation into agriculture, it is critical to master into any agricultural systems all over the world. This study is to capture comprehensive understanding on the status of Vietnam’s agricultural production, trade and policies. Vietnam is an agricultural country with a long history of Wet Paddy Civilization where agriculture sharing 35.1% of land area, employing 42% of labors and contributing up to 17% of total 196.3 - billion$ GDP in 2015. During the last 30 years of implementing Doi Moi Policy, a market orientation reform. Vietnam has achieved remarkable results for ensuring national as well as global food security, eliminating hunger, alleviating poverty. The country has transformed from one of the world’s poorest to a lower middle-income country (1,990 $/capita in 2015) with high exporting quantities of agricultural products for being the world largest exporter of cashews nut and black pepper, the second largest exporter of coffee and cassava, and the third largest exporter of rice in 2013. The nation has boosted its international economic integration with more than 100 different trading partners all around world, which has provided a further catalyst for national economic development. However, the country is still facing with many challenges in agricultural production. Hence, the country has made big efforts to restructure its agriculture. Production is oriented towards agriculture commodities with intensive cultivation and specialization to boost productivity and quality, using more machinery, agricultural materials, high technologies, and agriculture associated with industrial processing and agricultural services.


베트남 농업생산량 및 무역 정책의 현황

루 티투이*,**, 임 선영
**, 이 동진**, 김 용환**
*베트남농업과학원(VAAS) 식량작물연구소(FCRI)
**단국대학교 식량생명공학과

초록


    INTRODUCTION

    Vietnam is located in the heart of Southeast Asia at longitude of 108°16’37.92’’E and latitude of 14°3’29.97’’N with long coastline. The S-shaped country shares borders to the North with China and to the West with Laos and Cambodia. The climate varies greatly with three distinct climatic zones, including humid subtropical climate in the North, monsoon climate in the Central and tropical savanna climate in the South. The diversity of weather, soil types and location of Vietnam allows cultivating various kinds of crops, flowers, vegetables and livestock.

    Vietnam is an agricultural country with a long history of Wet Paddy Civilization. As being reported from General Statistic Office of Vietnam in Quarter 2, 2016, there are 42% of employed population are working on Agriculture, including 56.3% rural residents and 11.5% urban residents. Hence, farming continues play an important role in the lives and livelihoods of many Vietnamese. With advantages of great natural resources, Vietnam is one of the fastest developing countries getting started from agriculture.

    It was thank to Doi Moi reform which was launched in the mid-1980s has shifted Vietnam from highly centralized planned economy towards greater market orientation one. Since then, Vietnam has changed from one of the poorest countries to one of leading agricultural exporters in the world, and served as an attractive destination for foreign investment in Southeast Asia. The national GDP has increased nearly 10 times over last two decades, up to 193.6 billion US$ in 2015 in which agriculture contributed for 17%.

    Vietnam is the world’s largest exporter of cashews and black pepper, the second largest exporter of coffee and cassava, and the third largest exporter of rice (FAOSTAT, 2013; USDA, 2013). However, there have been several challenges on Vietnam agriculture as: mainly export raw products, agricultural development is fundamentally based on exploiting the natural resources and consuming high quantities of input materials but low technology, low capacity in creating new added values. Low value-added and more deeply integrating into the global market, Vietnamese agriculture increasingly brings negative socioeconomic and environmental consequences.

    To handle these problems, the country is going to restructure the economy, particularly in agricultural sector. Production is oriented towards agriculture commodities with intensive cultivation and specialization to boost productivity and quality, using more machinery, agricultural materials, high technologies, and agriculture associated with industrial processing and agricultural services.Table 1

    CURRENT STATUS OF VIETNAM

    While Vietnam is a mid-size country of 331 thousand km2, its population density is high at approximately 296 people/ km2. In 2015, the population of the country was about 91.7 million people of which roughly two-thirds living in rural areas. Although Vietnam is rich in water resources, its arable land is scare with approximately 0.071 ha per capita in 2013. Total arable land increased by 60.3 % from 1990 to 2015, because of heavy deforestation in early1990s for cultivating industrial crops like coffee, cashew nut, etc. (WB WBI, 2015).

    Despite the average GDP growth rate has recently decreased to about 6.0% (2010-2015), the average of annual GDP growth respectively increased by 7.4% and 6.7% in 1990s and 2000s, which leaded to an increase of relatively three times of GDP per capital over these two decades. After market – oriented reform, Vietnam has steady integrated into global economy, which has driven the country from one of poorest countries in the mid-1980s to one of lower middle-income countries in 2013 (USDA, 2015). The average income per capita has increased approximately 10 times from 1995 to 2015. In 2015, the national GDP is 193.6 billion (at current US$), corresponding to 6022.6 US$ per capita (WB WBI, 2016).

    VIETNAM’S AGRICULTURE PRODUCTION

    In broad term, Vietnam’s agriculture including agriculture sub-sector, forestry and fisheries. However the proportions of forestry and fisheries are small at 1% and 5%, respectively (Fig. 1). Hence, this study mainly focused on agricultural sub-sector crop and livestock production.

    The gross production value of agriculture has increased gradually from 1991-2002, before witnessing a dramatic change from 2002-2013. The value of crop production has been about two times higher than the livestock value (Fig. 2).

    The structure of Vietnam agricultural production is tending to be unchanged over two last decades (Fig. 3). The agricultural services has contributed a smallest amount to agricultural production at around 2-3%, followed by livestock production at approximately 16-22%, and finally cultivation production (76-80%). While the percentage of crop production and agricultural service had been witnessed small downward trends, the opposite is true of livestock production.

    The pie chart shows the proportion of harvested areas of several main crops in 2014 (Fig. 4). The paddy production area occupied more than half of total harvested cropland at 7816.2 thousand ha, followed by perennial industrial crops at 2133.5 thousand ha (15%). While harvested areas of root & tubers and annual industrial crops were quite similar at 5% cropland, maize and vegetables were cultivated at 7-8% of cropland, respectively.

    In 2015, total quantity of cereal production was 50.5 million tons, corresponding to 550.6 kg/capita. The cereal production included 45.2 million tons of paddy rice (occupied for 89.5%), 5.3 million tons of maize. The cultivation area of some annual industrial crops decreased, leading to lower productions in compared to the previous year. With 6.7% decrease of cultivation area, quantity of sugar cane reduced to 18.3 million tons (a decrease of 7.6% in compared to the previous year). Similarly, soybean quantity decreased by 6.5% (146.4 thousand tons) as a result of 7.9% reduction of planted area. However, production of some perennial industrial crops has increased gradually. Coffee productivity was 1445 thousand tons, increased by 2.6%; rubber 1017 thousand tons, increased by 5.2%; tea production was 1000.9 thousand tons, an increase of 1.9%; pepper production was 168.8 thousand tons, jumped up 11.3%; and grape production was 27 thousand tons, up to 13% in comparison with these productions in 2014 (GSO, 2015).

    As can be seen from Fig. 5, Vietnam has long history for paddy cultivation. The rice production has increased gradually with a slowly increased rate of cultivation area, which means that the country has applied high-yielding varieties, advanced cultivation and hi-tech in rice production. Besides the cultivation areas as well as productivity of maize, green coffee, natural rubber, tea, black pepper, and cashew nut have also risen, especially after the year 2001 (Fig. 6-12). In 2001, the national agriculture remarked by US-Vietnam Bilateral Trade Agreement.Fig. 7Fig. 8Fig. 9Fig. 10Fig. 11

    Livestock and poultry farming have changed from small farms into house farms, applied science and tech- nology to improve economic value. In 2015, there were 2.5 million heads of buffaloes (increased by 0.1%), 5.4 million heads of cattle (2.5% increased), 27.7 million heads of pigs (GSO, 2015). Among the livestock products (Fig. 13), pork meat has risen to roughly 6 times after 20 years, from 561 thousand tons in 1995 to 3,331 thousand tons in 2015. There has been slightly increase of chicken and cattle productivities, whereas a nearly unchanged amount is seen in buffalo. While the upsurge of crop production is for exporting, the livestock production is just for domestic markets. The increase of livestock production reflects the higher demand of national consumers.

    VIETNAM’S AGRICULTURAL TRADE

    The Fig. 14 shows total Vietnamese agricultural exports and imports from 1985-2013 and its integration into the global economy during the period. Vietnam has been the seventh member of the Association of Southeast Asian Nation (ASEAN) since 1995. At this time, Vietnam’s total agricultural trade was less than $1 billion. Vietnamese agricultural trade also benefited from bilateral agreement of trade with the United States in 2001. Vietnam’s agricultural trade was almost triple from 2005 to 2010. Vietnam entered into World Trade Organization (WTO) in 2007 provided a further catalyst for national growth and integration.

    From 2007 to 2011, total Vietnamese agricultural imports grew from approximately $6 billion to $10 billion, whereas the exported value doubled at approximately $13 billion. Vietnam entered into trade agreement with Korea (2009), China (2010), Australia/New Zealand (2010), and India (2010) through ASEAN, and signed bilateral agreements with Japan (2009) and Chile (in effect 2014), which led to tariff reductions. Vietnam has concluded bilateral trade agreements with more than 100 different trading partners.

    The importance of agriculture in Vietnam is measured as its value added of as percent of GDP. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. The percentage of agricultural value-added into GDP has decreased gradually after seeing a tremendous downward from 1988 to 1994. The average value for Vietnam during the period (1985-2015) was 26.52% with a minimum of 16.99% in 2015 and a maximum of 46.3% in 1988 (Fig. 15).

    As can be seen from Figure 16, Vietnam and other devel- oping Southeast Asian countries are still much depending on agriculture. Vietnam’s agricultural value-added contribution to national GDP is approximately 10 times higher than most of TPP countries.

    The Vietnam’s production of major agricultural commodities in 2013 is represented in Table 2. Rice, corn, sweet potato, cassava have been four main food crops in Vietnam. Rice is the most important one, occupied at 32.3% of total agricultural production. Since Doi Moi reform, rice production have been increasing continuously, leading Vietnam to be one of top rice-exporting countries in the world. Vietnam exports around one-fourth of its rice production to the world (Fig. 17). Rice-based agriculture has dominated Vietnam’s northern Red River Delta and the southern Mekong Delta for centuries. Because of its low labor costs and favorable weather condition, Vietnam has become one of competitive producers in the world markets since 1990s. The country has mainly cultivated long-grain rice (Indica variety). It is due to poorly milled and low quality of rice, Vietnam’s rice is more suitable for low income consumers in domestic market as well as in international ones. Vietnam has imported rice from Cambodia, Thailand, and Laos at a very small share of Vietnamese consumption.

    Corn (4.2%) is the second main food crop in Vietnam, which has grown in uplands for feeding animals. Vietnam also produces cassava (2.7%) for feed and manufacturing and sweet potato at 1%. As a tropical country, Vietnam can produce variety of vegetables, fruits and industrial crops. The industrial crops include coffee (5.8%), cashew nuts (3.2%), and pepper (2.3%), tea (0.2%). Pork and chicken meat occupied for 15.8%, 6.0% of agriculture revenue, respectively. Vietnamese farmers rely on small scale production. Due to urbanization, there has been increasing in prices of agricultural products.

    The rice export turnover keeps increasing for a long period which has rocketed since 2007, and reached a peak in 2012 (Fig.17). The export values of other main crops have also increased rapidly as reported in the Fig. 18. In 1990-2011, annual exported quantity of coffee increased 12%, nearly the same as the annual increase of total production (13%). In period 2012-2013, the export values of coffee and rubber decreased due to the low prices.

    China is the biggest importer of Vietnam’s agricultural products, occupied for 20% in the period of 2011-2013. The main agricultural products have being exported to China is (fresh and powder) cassava, rice, cashew nuts. America is the second largest consumers of Vietnam, including cashew nuts, fisheries. Japan has imported coffee, shrimp, fish and meat.Table 3

    VIETNAM’S AGRICULTURAL POLICIES

    There have been 5 periods of Vietnam’s agriculture since its reunification. Firstly, the period 1976-1986, agriculture activities were managed by state-owned enterprises (cooperatives) which provided inputs and controlled outputs. Because of low knowledge and motivation of farmers in production, the country had faced serious famine, food shortage and high inflation. The second period (1986- 1993) remarked by Doi Moi reform where the economy changed from high centralized plan to market orientation. Agricultural land was shared to households for their own production decision. Co-operatives played role in supplying inputs and services such as irrigation and drainage, plant protection, and extension. Since then, agricultural production rose sharply, fostered to overall national economic growth. The reforms opened up the market to both greater domestic and international competition. The third period (1993-2000), government focused on encouraging agricultural expansion institutional reforms such as national extension service to replace the old co-operative systems. Abrogation of tax in agriculture was passed by Council of State in 1989. Although government helped farmers to expand production, approach advanced technologies and supplied services, it was still ineffective. The period from 2008 to present, Government promulgated two Resolutions and two Decisions in Agriculture, as follow:

    The Resolution 26/2008/NQ-TW, known as Tam Nong policy, referred for agriculture, rural development and farmer livelihoods which was dated on 5 August 2008 by the Central Executive Committee. The government aimed to build up a compressive, modern and stable agriculture with large commodity production, high productivity, quality, efficiency, and competitiveness for ensuring national food security in the both short-term and long-term. Beside, Government focused on increasing intellectual level of rural human resource; transiting labor from agriculture to industry and services; protecting the ecological environment; and improving both the physical and spiritual life of rural residents.

    Resolution 63/2009/NQ-CP promulgated on 23 December 2009 by the Government. The policy is aimed to ensure adequate food supply sources for immediate- and long-term national food security, meeting nutrition needs and putting an end to food shortage and huger; improving food consumption structure and quality; promoted intensive farming of rice production, ensuring that farmers can get at minimum 30% of benefit on rice production.

    Decision number 124/2012/QD-TTG signed on 2 February 2012, approved the master plan for agricultural production development up to 2020 and a vision toward 2030. It aimed to develop a modern, sustainable agriculture, produce large-scale commodities on the basis of comparative advantage; apply science and technology to increase productivity, quality, effectiveness and competitiveness for ensuring national food security in both short-term and long-term while meeting diverse demands in both domestic and export; improve the efficiency of land, water, labor and capital use; improve incomes and living conditions for farmers, fishers, salt producers and forestry managers.

    Decision number 899/2013/QD-TTG, approved on 10 Jun 2013 in order to reconstruct agricultural sector for enhancing value added and sustainable development. The long-term objectives for agriculture will be reflected in three sustainable pillars:

    • About economy : Focus on exploiting and making use of tropical agriculture; building up and developing large scale specialized farming areas, meeting international standards on food hygiene and safety; linking agricultural production to processing industry, preservation and product consumption, to global value chain for competitive products in the international market: coffee, rubber, rice, catfish, shrimps, black pepper, cashew nut, other seafood, tropical fruits, vegetables, etc. At the same time, maintaining the scale and diverse production methods to the products with high domestic demand but low competitiveness, such as livestock products, sugar, institutional improvements for market-driven agricultural development; renovation and development of management systems and organizational systems of production and business.

    • About society : Increase income for agricultural producers, especially the poor and near poor in rural areas and people in remote areas, women’s participation in agricultural growth through poverty reduction support, sustainability of production and income. Agricultural production are priority to farmers’ and consumers’ welfare.

    • About environment : Minimizing adverse environmental impacts caused by exploiting resources for agro-forestry- fishery production; Increasing efficiency in the management and use of resources (land, water, marine resources, forests); Considering carefully the interaction in resource exploitation; Increasing methods for reduction of greenhouse gas emission; Using effectively and safety ofr chemicals, pesticides, animal waste, cultivation, processing industry and craft villages; Preserve biodiversity; Encouraging the application of environmental standards with a close monitoring mechanism to promote the development of green agribusiness supply chains.

    적 요

    농업 생산은 인간의 식량, 의복, 의약품, 고용 등을 공급하 기 때문에 가장 중요한 분야이다. 농업에 대한 연구뿐만 아니 라 개발을 촉진시키기 위해서는 전 세계의 모든 농업 시스템 을 숙달하는 것이 중요하다. 이 연구는 베트남 농업 생산, 무 역 및 정책의 현황에 대한 포괄적 인 이해를 포착하기 위한 것이다.

    • 1. 베트남은 습식 논 문명(Wet paddy Civilization)의 오랜 역사를 지닌 농업 국가로 토지 면적의 35.1%를 농경지로 이 용하며, 노동인구의 42%가 농업에 종사하고, 총 1,963 억 $ GDP의 17%를 기여한다.

    • 2. 지난 25 년간 시장 지향적인 개혁정책인 Doi Moi 정책 을 시행하면서 베트남은 빈곤을 해소하고 기아를 없애고 국가 및 세계 식량 안보를 보장하는 놀라운 성과를 달성했다.

    • 3. 이는 세계에서 가난한 나라 중 한 곳에서 중산층 국가로 성장하였다(2015년 기준 1,990 $/capita). 베트남은 농산물 수 출량이 많은 나라로 세계에서 가장 많은 양의 캐슈너트와 후 추를 수출하고 있으며, 커피 및 카사바의 수출량은 세계에서 두 번째로 크며, 2013년도 세계 쌀 수출량은 세 번째로 큰 수출국이다.

    • 4. 또한, 전 세계의 100 개 이상의 무역 파트너와의 국제 경제 통합을 촉진시켜 국가 경제 발전의 촉매제가 되었다. 그 러나 여전히 농업 생산에 많은 어려움을 겪고 있다. 따라서 베트남은 농업을 개편하기 위해 많은 노력을 기울이고 있다.

    • 5. 산업가공 및 농업서비스와 관련된 더 많은 기계류, 농자 재, 첨단농업기술을 사용하여 농산물의 생산성과 품질을 높 이기 위해 집약적인 재배와 전문성을 갖춘 농산물 생산을 지향한다.

    Figure

    KSIA-29-103_F1.gif

    Structure of Vietnam agriculture in broad term in 2013 (Source: OECD, 2015).

    KSIA-29-103_F2.gif

    Gross production value of agriculture by kind of activity, 1991-2013 (Source: GSO, 2015).

    KSIA-29-103_F3.gif

    Change in agriculture production structure, 1990-2011 (Source: GSO, 2015).

    KSIA-29-103_F4.gif

    Share of harvested area of main crops in 2014 (Source: GSO, 2016; FAOSTAT, 2016).

    KSIA-29-103_F5.gif

    Harvested area and total productivity of rice, 1985-2015.

    KSIA-29-103_F6.gif

    Harvested area and total productivity of maize, 1985-2014.

    KSIA-29-103_F7.gif

    Harvested area and total productivity of sugar cane, 1985- 2015.

    KSIA-29-103_F8.gif

    Harvested area and total productivity of green coffee, 1985- 2013.

    KSIA-29-103_F9.gif

    Harvested area and total productivity of natural rubber, 1985-2013.

    KSIA-29-103_F10.gif

    Harvested area and total productivity of tea, 1985-2014.

    KSIA-29-103_F11.gif

    Harvested area and total producivity of black pepper, 1985-2014.

    KSIA-29-103_F12.gif

    Harvested area and total producivity of cachew nut with shell, 1985-2012.

    * Source from Fig 5. through Fig 12: FAOSTAT(2015), GSO(2015)

    KSIA-29-103_F13.gif

    Production of serveral kinds of meat, 1985-2014.

    * Source : GSO(2015)

    KSIA-29-103_F14.gif

    Agricultural trade and trade agreement, 1985-2013.

    * Source : FAOSTAT(2015)

    ANZFTA = ASEAN-Autralia-New Zealand Free Trade Agreement; ASEAN = Association of Southeast Asian Nations; EPA = economic partnership agreement; WTO = World Trade Organization *Source: FAOSTAT, 2015

    KSIA-29-103_F15.gif

    Vietnamese agricultural value-added as a share of GDP, 1985-2015.

    *Source: The World Bank (WB WBI)

    KSIA-29-103_F16.gif

    Agricultural value-added ad a share of GDP in some countries, 2014

    *Source: The World Bank (WB WBI)

    KSIA-29-103_F17.gif

    Rice production and export. 1961-2013.

    Table

    Vietnam’s contextual information in 1995 and 2015.

    12013 instead of 2015
    *Source: WB WDI (2016); FAOSTAT (2016)

    Production of several selected agricultural commodities in 2013

    *Source: FAOSTAT, 2015

    Export values of some industrial crops, 1986-2013. (million. US$)

    *Source: FAOSTAT, 2015

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