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Policy Changes Needed to Maintain Viet Nam's Farming Transformation

02 October 2015

VIET NAM - Viet Nam has made remarkable agricultural progress, but further policy action is required to address new and emerging challenges, according to a new OECD report.

The report said that economic reforms have generated a tripling of farm production over the 1990-2013 period, lifting rural incomes, reducing poverty, combating under-nourishment and sending agro-food exports soaring.

Viet Nam should now seek to build on these achievements while addressing long-term challenges posed by slower rates of production growth, declining commodity prices, limited land for further expansion and increasing evidence of negative environmental impacts from farming, the report recommended.

The OECD Review of Agricultural Policies in Viet Nam highlights progress in the farm sector since the Doi Moi reform programme launched in the mid-1980s.

Production growth saw the proportion of undernourished people fall from 46 per cent of the population over the 1990-92 period to just 13 per cent over the 2012 14 period, one of the strongest improvements worldwide.

Parallel to this accomplishment, Viet Nam radically boosted its place in global agro-food markets, becoming 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 and fisheries.

“Viet Nam’s agricultural transformation over the past two decades has been nothing short of remarkable,” OECD trade and agriculture director Ken Ash said during a launch event in Hanoi with Vietnamese Vice Minister of Agriculture and Rural Development Le Quoc Doanh.

“Going forward, Viet Nam needs to improve its policy environment, to enable investments that will allow the farm sector to continue to adapt to the opportunities created by rising demand and the challenges of climate change and limited resources.

"Rising labour costs will open opportunities to adopt new technologies and encourage larger farms, but they may also reduce the sector’s overall competitiveness, particularly if newer labour-saving techniques are not readily accessible or adaptable to the dominant small-scale farming,” Mr Ash said.

The OECD Review also highlights other opportunities for improvement, such as changes in investment rules and land rights, further improvement in infrastructure and changes in farming subsidies so as to put less pressure on government coffers.

Further information on the OECD Review of Agricultural Policies in Viet Nam is available here.

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