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Food security in the new context: Vietnam case study 1. Current situation of food security in Vietnam Food in general and rice in particular is vital for almost all countries in the world and Vietnam is not an exception because rice is the main staple food. Vietnam basically has favorable conditions for rice production with tropical weather, available land and water resources and long life experience in rice cultivation. Therefore, the supply and export of rice have been increasing since 1989. However, taking an overall standpoint of food security (World Food Summit 1996), the food security in Vietnam should receive much concerns. And we will analyze this status in details here below. a. Food Availability Vietnam has 33 million ha of land, of which 7 million ha are agricultural land and rice occupies about 4 million ha. Rice is the main food of the Vietnamese people providing 80 percent of the carbohydrate and 40 percent of the protein intake in the diet. It is the predominant crop in most of the ecological regions of the country. Most of the rice grown in Vietnam is in the Red River Delta in the north, where nearly 85 percent of the area was irrigated, and in the Mekong River Delta in the south. Upland rice is grown on about 100,000 hectares in the southeastern region, central, and northern highlands. Along with the economic reform and high economic growth, rice production has increased rapidly. Figure 1: Rice planted area and production Source: GSO (2011) While the land for rice tends to decrease, the total rice cultivated acreage has increased steadily (from 6.04 million ha to 7.6 million ha) and the total output has increased to nearly 20 million tons since 1990. Therefore, rice production not only provides enough for domestic demand which has shown a downward trend since 2008 and is predicted to continue in the near future but also surpluses for export and rice export reached the peak in 2011 of nearly 7 million tons. 1 Figure 2: Rice export increase (thousand tons) Source: GSO (2011) Figure 3: Structural Turning Point in VN’s National Rice Consumption (Million Tons) 14000 13000 12000 11000 10000 9000 8000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 7000 Source: GSO (2011) and author’s prediction 2 b. Food accessibility Income growth has contributed remarkably to the improvement of food accessibility. This, in turn, support the country to reduce poverty rate in general and in both rural and urban areas. The percentage of population living below the total poverty line has decline rather rapidly especially in urban areas. Considering the poverty rate by regions, it is clearly to see that the poverty incidence is not equal across regions. Northern mountainous area is the poorest region with poverty rate of 26.5%, followed by Central Highlands and North Central and Central Coast with rate of about 20%. South East is the region with the lowest poverty incidence. Table 1: Poverty rate1 The whole country Urban areas Rural areas By region Red River Delta Northern mountainous areas North Central and Central Coast Central Highland South East Mekong River Delta Source: GSO (2011) 2004 18.1 8.6 21.2 2006 15.5 7.7 18.0 2008 13.4 6.7 16.1 2010 14.2 6.9 17.4 2011 12.6 5.1 15.9 2010 14.2 5.1 15.9 12.7 29.4 10.0 27.5 8.6 25.1 8.3 29.4 7.1 26.7 7.1 26.7 25.3 29.2 4.6 15.3 22.2 24.0 3.1 13.0 19.2 21.0 2.5 11.4 20.4 22.2 2.3 12.6 18.5 20.3 1.7 11.6 18.5 20.3 1.7 11.6 Beside that, nutrition patterns of Vietnamese people have also been improved. Since 2000, there have been significant improvements in food consumption pattern with decreasing ratio of rice and tubers consumption and dramatic increase in consumption of meat products, fruits, eggs and milk. Figure 4: Average food consumption per head Source: General Nutrition Survey (2009-2010) 1 The rate is at household level and calculated basing on MOLISA poverty line. 3 Moreover, the proportion of undernourished population is much lower than other regional countries reflecting a big achievement in nutrition aspect. Table 2: Undernourished Situtation Indicator Measure Vietnam Thailand Philippines China Cambodia Myanmar Indonesia Proportion of Percent Undernourished Population 11 16 15 10 22 16 13 Number of Millions Undernourished 9.6 10.8 13.2 130.4 3.0 7.8 29.9 2770 2530 2520 2970 2250 2440 2540 Dietary energy supply (DES) Kcal/ person/day Source: GSO (2008) Despite improvements, there are big gaps among income quintiles in nutritional intakes. The below figure shows that the three lowest income quintile groups spend the largest proportion of their monthly expenditure for rice while meat accounts for the largest part of the two rich groups’ monthly income. Figure 5: Monthly expenditure per capita by income quintiles in Vietnam (1: poorest, 5: richest) 160 140 120 100 80 60 40 20 0 1 Meat 2 Out of Home Eating 3 4 Rice Fish 5 Fruit and Veg Source: GSO (2009) 4 In addition, there is a disconection between rice surplus and nutrition goals in Vietnam. While rice surplus has been increasing rather rapidly since 1999, the rate of stunting childen under 5 year old has went down slowly and become stagnant for the last 8 years. Figure 6: Disconnect Between Vietnam’s Rice Surplus and Nutrition-Related Goals 70 60 50 40 30 20 10 1999 2000 2001 2002 2003 <5 Child Stunting Rate (%) 2004 2005 2006 2007 2008 2009 2010 Rice Export Volume (000 Tons) Source: GSO (2010) c. Stability Vietnam has attained great achievements in ensuring food supply but there are still many factors that affect its stability. Rising food prices The recent increases in global commodity prices including food products have posed a new set of challenges to Vietnam’s ability to maintain a path of sustainable and socially equitable growth. If the world rice price remained at rather low levels in the past, food price volatility has become a major issue on international market and many domestic markets as well since 2006. In today’s globalized world, price changes in the international market are most likely to be transmitted to the domestic market sooner or later. Therefore, it is not surprising that food prices in Vietnam have fluctuated dramatically recently. Figure 7: Rice price fluctuation 14000 1000 900 800 700 600 500 400 300 200 100 0 12000 10000 8000 6000 4000 2000 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 1 5 9 05 05 05 06 06 06 07 07 07 08 08 08 09 09 09 10 10 10 FOB $ HCMC urb/kg Can Tho urb/kg . Source: Agroinfo (2012) 5 The significant rise in food prices has led to increasing vulnerability among specific groups in the population. In the first place, the higher food prices exert downward pressure on households’ purchasing power, especially in the context of high inflation rate in the economy. Households of low incomes, who spend a significant proportion of their income on foods have received big adverse impacts of high food price . In addition, the high rice price has also increased the probability of households who had just overcome the poverty line falling back below it. In this way, the sustainability of the success of Viet Nam’s poverty reduction efforts over the past 20 years could quickly be undermined. Figure 8: Rice rice Volatility Natural Hazards With its unique mix of geography, Vietnam is one of the countries in the Asia Pacific region most vulnerable to natural disasters. Its long and exposed coastline is subjected to annual beatings by typhoons, its mountainous terrain is hit alternately by flash floods and prolonged drought, while its wide river deltas are extremely prone to flooding. Viet Nam has recently affected by many types of disasters; amongst them, flood and storm are the most serious and frequent disaster events causing loss of human lives and significant damage to housing and agricultural produce. Provinces in the North- and South-Central regions are most regularly affected by disasters, but other provinces in the North and the Mekong River delta have also seen severe damage, due likely to more extreme events. Temporal trend analysis shows that there is an increasing trend in disasters recorded over the past twenty years (1989-2010) with varied impacts on human losses and damages to housing. Extreme events have occurred also in this time period. All these disasters can caused severe impacts on crops and food resources, as well as seed stock, fertilizers and other resources in vulnerable areas; this requires strategies and contingency plans for disaster risk reduction and damage control at the provincial and local levels. Here below are 2 scenarios for climate changes and under both likely circumstances, Vietnam will meet many difficulties in terms of sunk areas and the number of people affected. 6 Figure 9: Some scenarios for climate change and its effects in Vietnam Sea water: 1m Sunk area: 9.1% People affected: 15.6% Sea water: 1.5 Sunk area: 12.2% People affected: 23.9% (20mil) 2. Food security towards 2030 a. New challenges and threats Climate change is expected to lead to a temperature rise of up to 2,5 ºC by the year 2070. Changes in rainfall patterns are expected to have a large impact. Central Vietnam for example may expect an increase of 20% during the Northeast monsoon, while the river flow in the dry season may be reduced to 40%, leading to drought. Climate change is also expected to lead to more typhoon landfalls and sea level rise. Natural resources, especially land and water are becoming scarce, thus creating disputes in use and leading to conflicts of interest among countries and communities that are locating in the same river basin. The fossil fuels are also becoming scarce due to the fact that human beings have used very large amounts of them like coal and oil to accelerate the process of economic development. And the world economy is dependent largely on fossil fuels which are accounting for about 80% of primary energy supply. That means the shortage and the scarcity of them will put much pressure on the economy and our daily lives as well. The world population continues to increase and is expected to reach 9 billion in 2042. From 1950 to 2006, grain production tripled, but the world's population growth was faster than that rate. 7 Therefore, the world's food reserves became smaller to the food requirement. In the past 20 years, consumption has grown faster than the growth rate of food supply. In Asia, the main food market, the population increased by 1.5% each year while rice output increased by only 1.2%, thus the demand for rice continues to increase in the future. b. Rice balance scenarios in Vietnam towards 2030 Basing on the current situations of rice production in Vietnam, we work out some scenarios to have a clearer picture about the future of rice balance in Vietnam. Key assumption for the scenarios is that paddy land of 3.8 million ha (Land1) will be either strictly secured and remain unchanged from now on or will reduce gradually at recent reduction rate and end up with 3 million ha (Land2) by 2030. Other assumptions include assumptions and probabilities for productivity and per capita consumption as follows: Table 3: Assumptions for scenarios Post harvest losses (%) Rice yield (tons/ha) Consumption per capita (kg/year) 1 10 (100%) 7 (30%) 100 (75%) 2 3 6.3 (50%) 120 (25%) 5.8 (20%) If paddy land will be kept at the current area of 3.8 million, rice surplus will range from 5 million tons to nearly 12 million tons, which is a very large amount depending on different rice yields and consumption per capita assumptions. Table 4: Scenarios with 3.8 million ha of paddy land. Unit: Thousand tons Land1 + Yield1 + Cons1 Land1 + Yield1 + Cons2 Land1 + Yield2 + Cons1 Land1 + Yield2 + Cons2 Land1 + Yield3 + Cons1 Land1 + Yield3 + Cons2 Paddy output 47894 47894 43343 43343 40315 40315 Rice Consumption 10602 12722 10602 12722 10602 12722 Rice Export 11800 9149 8886 6765 7294 5174 In case paddy land will reduce at the rate of 5 recent consecutive years, it is estimated that paddy land area will end up with only 3 million ha by 2030. However, Vietnam can ensure food supply for domestic demand with only 3 million ha of paddy land at the “worst case” with no improvement in rice productivity and no reduction in consumption which are least likely to occur. 8 Table 5: Scenarios with 3.0 million ha of paddy land. Unit: Thousand tons Rice Paddy output Consumption Rice Export Land2 + Yield1 + Cons1 37811 10602 6579 Land2 + Yield1 + Cons2 37811 12722 3929 Land2 + Yield2 + Cons1 34218 10602 4167 Land2 + Yield2 + Cons2 34218 12722 2047 Land2 + Yield3 + Cons1 31828 10602 2911 Land2 + Yield3 + Cons2 31828 12722 790 3. Policies on Natural Resources and Infrastructure Management for Agriculture to ensure food supply. Recognizing the importance of natural resources and infrastructure for agriculture in ensuring food supply in the long term, the government of Vietnam has issued policies to protect and maintain the natural resources as well as policies on enhancing the infrastructure for agricultural production. Some of the most important policies are a. Land policies Land is the main natural resources for agricultural production. Although agricultural land in Vietnam accounts for 75% of the total land area of the country- a big proportion but paddy land comprises of but only 16% of the total agricultural land and has shown a decreasing trend recently. Paddy land lost in the last 10 years is the most fertile and suitable land for rice production. From 2005 to 2007, paddy land reduced by 34,330 ha and 79% of which is land in Red River Delta (8,000 ha) and Mekong River Delta (15,000 ha), the two biggest region for rice production2 . Therefore, the issue of agricultural land, especially paddy land has received great attention of policy makers, demonstrated in a large variety of current policies as follows: - Land Law No. 13/2003/2011 dated 26/11/03 - Resolution No. 63/NQ-CP dated 23/12/2009 on ensuring national food security - Resolution No. 17/2011/QH13 dated 22/11/2011 on land plan towards 2020 and the national 5 year land use plan for 2011-2015 - Decision No. 124/QĐ-TTg dated 2/2/2012 on master plan for the development of agricultural production towards 2020 and 2030 visioning - Decision No. 432/QĐ-TTg dated 12/4/2012 on sustainable development strategy for 20112020 - Decree No. 42/2012/NĐCP dated 11/5/2012 on paddy land use and management. All these policies focus on the below issues: - Ensuring the proper use and management of paddy land To ensure the National Food Security, the government has set the goal to keep 3.8 million ha of paddy land to ensure paddy production of 41-43 million tons that meets the domestic demand 2 Ministry of Natural Resources and Environment’s Report in 2007 9 and ensures the export volume of 4 million tons per year. The 7th Resolution of the Communist Party also sets the goal for Vietnam agriculture to maintain the current paddy land area and ensure national food security in medium and long term. The National Food Security Strategy of the Vietnam Government has stated “Paddy land is an irreplaceable, non-renewable, non-expandable resource. It is the most important factor for production development. Protective, effective and stable use of paddy land is, thus, the decisive measure to ensure the National Food Security”. - Promotion of land exchanges and accumulation Small scale production is a serious obstacle to agricultural production and a consequence of previous land allocation for farmers basing on the “near and far, good and bad, high and low” principle. To settle the issue, it is important to finish the process of land accumulation with the aim to establish large and modern commercial production areas to replace the small-scale household production. - Support policies to protect and enlarge paddy land which include support policies for regions or provinces who have favorable conditions for rice production and those for rice farmers. b. Policies on water resources for agriculture production Like land, water is an indispensable resource for rice production in Vietnam. If water was previously regarded as an abundant natural resource, water resource for agricultural production including rice production is becoming increasingly scarce. Water shortages have been becoming more severe, especially in the Red and the Mekong River Delta- the two major rice producing areas. Most importance policies are: - Decision No. 81/2006/QĐ-TTg dated 14/4/2006 on National Strategy for Water resources towards 2020. - Law on Water Resources No. 17/2012/QH13 dated 21/6/2012 - Decision No. 1590/QD-TTg dated 09/10/2009 on Irrigation Development Strategy Under this legal framework, water resources are protected by - Setting out comprehensively viewpoint, guiding principles, objectives, missions and implementation measures regarding the protection, exploitation, use and development of water resources - Working out methods for prevention and mitigation of adverse impacts caused by water - Delivery of state responsibilities for related ministries on water sector avoiding conflict, contradictions, gaps, overlaps on regulating functions, duties, power and organizational structure of the ministries. c. Policies on infrastructure for agriculture Infrastructure is considered to be a key issue for the development of agriculture. Infrastructure for agriculture includes but not limited to irrigation systems, storage systems, infrastructure for scientific researches on agriculture, and infrastructure for trading agricultural products. Some prevailing policies on agricultural infrastructure in general and those for rice production in particular are: - Ordinance No. 32/2001/PL-UBTVQH10 dated 04/04/2001 on exploitation and protection of irrigation works 10 - Law on Dykes No. 78/2006/QH11 dated 29/11/06 - Decision No. 1590/QD-TTg dated 09/10/2009 on Irrigation Development Strategy - Instruction No. 4935/VPCP-KTTH dated 07/04/12 on construction of storages for rice - Other policies to promote scientific research and technology transfer in agriculture, with particular emphasis on selected issues: plant breeding, plant protection agents and fertilizers. Thanks to the policies, investment on infrastructure for agriculture has been increasing and irrigation system receives highest attention with investment on it in 1991-1995 accounted for 75% of total capital for agriculture and since then, annual investment for irrigation has been made up from 1,350 to 1,700 billion dongs. Annually, the Government allocates a budget of about 2% GDP for science and technology and one third of the budget goes to agricultural science and technology, mostly to research projects on plant and animal breeding with the aim to achieve breakthroughs in plant yield and quality. And thanks to this, infrastruture for agriculture has been improved much with - 64% of rice land are irrigated and exempt from irrigation fee. - 95% of communes having car road., - National electric grid covers 96,4% of districts and 89% of communes - 100 % of communal office having telephones; - 72% of communes having post office; 56% having markets; - 100% of communes having clinics; 100% having primary schools; - 83% of rural inhabitants having access to clean water However, in genernal the total investment in agriculture in Vietnam is still very small (about 67% of total investment in whole country) and much lower than the contribution of the sector in national GDP. Figure 10: Investment in agriculture in total investment (bil dong, 1994 price) 450000 Investment in Agriculture, forestry and fishing 400000 Total investment 350000 300000 250000 200000 150000 100000 50000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: GSO (2011) 11 4. Policy implications Basing on the current situation of the whole economy and the rice sector, in the context of small-holding agriculture, and in accordance with the food security objectives set up by the government: - Ensure food supply by continuing to promote intensive rice production, especially in the Mekong and Red River Delta, creating stable supply sources to ensure national food security in the short and long term. - Ensure nutritional needs by improving nutritional status towards balanced nutrition and calorie consumption increase to reach the average annual of 2600-2700 Kcal/person and reduce the incidence of malnutrition in children under 5 years old to less than 5% . - Ensure food accessibility by eliminating food shortage and hunger by 2012 and ensuring that 100% of people everywhere, at all times have enough food. We here below give some policy suggestions: Regarding paddy land, we suggest to keep highest attention on keeping paddy land in the Mekong and Red River Delta and classify paddy land into 3 types: o Type 1- extremely suitable land for paddy production: This type of land which is located in favorable areas must be kept for a long term thus result in high rice quality and yield. o Type 2- suitable land for paddy production: This type of land will be kept for a certain period of time, and can be used for other crops to diversify income for farmers if necessary o Type 3- others. This type of land can be used for other crops if required. By clearly diversifying paddy land, it will be easier for land protection and management, paving the way for using land more effectively and giving opportunities for farmers to improve their income by diversifying their production. Policies for improving rice yield and rice production are also concerned issues. - Bigger investment in researches on new and better varieties, especially diseases and flood resistant varieties. - Carry out researches to find out suitable crop structures taking into account the ecological balance, ensuring production efficiency and suitability. - Develop large-scale rice production in Mekong and Red River Delta by supporting land accumulation and consolidation, expanding or removing land limits and improving agricultural services. Policies on infrastructure for agriculture should aim at: - Speed up the process of building rice storages to enhance the current storage capacity and quality. - Promoting mechanization in the production, harvesting, processing and storage of rice. - Providing more and better facilities for rice trading such as construction of Can Tho Port for rice export in the Mekong Delta. 12 - Strengthening the rice distribution system and trading network such as food retail outlets and warehouse systems. 13