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Subsistence farming a drag on agriculture development

Update: August, 27/2012 - 08:33

Dr Nguyen Do Anh Tuan, Centre for Agricultural Policy director at the Institute of Policy and Strategy for Agriculture and Rural Development talks to Nong thon Ngay nay (Countryside Today).

What makes you think the figure of 51 per cent of rural households living on subsistence farming is accurate for the whole nation?

The figure is the result of a survey jointly conducted by the Centre for Agricultural Policy and the Central Institute for Economic Development on households in 12 provinces, with financial support from Denmark. The survey is conducted every two years to monitor changes in households.

I don't think the results of the survey are representative of the whole nation. However, the figure represents the status of between 60-70 per cent of the farming households.

In the survey, we focused on household economies, social capital, information access and risk insurance. We tried to go deep into the livelihood of each household, not only their living standards, occupations, assets, inputs and outputs, social capital and so on.

Through the survey, we know living conditions of the people surveyed have improved from the first survey in 2006 to the second survey in 2010. Yet the improvement is not across the board: about 20 per cent of the households remain poor or even went backwards.

The survey shows the saving rate of rural households is very low. Why?

That's right. Due to their low savings rate, many households cannot expand production. In addition, their access to credit is very limited. Their savings are barely sufficient to cover health care, funerals, and weddings. The monthly income per capita is about VND1 million ($47).

Rural households in Viet Nam must face risks. Are they well covered by the national social insurance?

Risks facing rural households are high, including natural calamities, diseases and market fluctuations. Yet, their ability to mitigate the risks is low, due to their low income and poor credit access and insurance cover. Their only recourse is to sell their rice paddy or their pigs or reduce spending. They are likely to go back to square one after being hit by a storm or deep fall in the market.

Another point: farmers don't save to re-invest or expand production, they just save for a rainy day.

It seems the rural household economy is not stable. Can we do something to help?

If things keep going on as at present we are unlikely to have sustainable agriculture development, which will undermine the country's competitiveness, food security and export.

We need to speed up the process of land aggregation with fewer, more professional farmers using modern machinery to improve the yields of rice and other produce. People working in agriculture now can be diverted to other industries, including supporting and processing industries, in their own localities. — VNS

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