Tuesday, December 12, 2006

Trade Liberalisation, Export-Oriented Agriculture, Gender and Poverty: The Record in Vietnam

Macro Policy Analysis on Trade Liberalization,
Agriculture and Gender in Vietnam



By Pham, Tuong Vi and Michael Karadjis
With contribution from Han, Tuyet Mai
Center for Natural Resources and Environmental Studies, Vietnam National University, Hanoi
March 2003


Report for Gender and Trade Workshop
Phnom Penh, June 23-30 2003
Womens Agenda for Change/Oxfam Hong Kong, Cambodia
Funded by Oxfam America

Originally published: http://www.focusweb.org/node/130


Contents

Introduction ……………………………………………………….. 5
Introduction to gender aspect of the study …………………………… 5
Chapter 1: International driving forces of the trade
liberalisation push ……………………………………………………… 6
1.1 World Bank and IMF policy conditionality in the PRSP
process …………………………………………………………….. 6
1.1A Country-owned? ………………………………………… 7
1.1B Consultation with the poor – what do the poor say? ……….. 8
1.1C World Bank recommendations on agriculture …………….. 9
1.2 Asia Free Trade Area (AFTA) ……………………………….10
1.3 World Trade Organisation (WTO) ………………………….11
` 1.4 Bilateral Trade Agreement (BTA) …………………………..12
Chapter 2: Vietnamese Government Policy ………………………….. 13
2.1 Poverty Alleviation ………………………………………….. 13
2.2 Trade and Economic Liberalisation ……………………….. 13
2.2 Gender ……………………………………………………….. 16
2.3 NGO comments on the strategy ……………………………. 17
Chapter 3: Rationale for trade and economic liberalisation ………... 18
3.1 Agriculture …………………………………………………... 18
3.2 Gender ……………………………………………………….. 19
Chapter 4: Problems with the Rationale ……………………………… 20
4.1 Agriculture …………………………………………………… 20
4.2 Gender ………………………………………………………... 22
Chapter 5: Review of major issues of trade liberalisation
in agriculture …………………………………………………………... 25
5.1 Food Security, export cash crops and diversification ……. 25
5.2 Export crop price crashes ………………………………….. 27
5.2A Coffee price crash ……………………………………… 27
5.2B Price crashes of other export crops ……………………… 28
5.3 Import surges destroying local agriculture ……………….. 29
5.3A Maize and Soybeans …………………………………… 29
5.3B Cotton ………………………………………………… 30
5.3C Other challenges ………………………………………. 31
5.4 Fruit: Price crashes threaten export value
and import surge ……………………………………………….. 32
5.5 Rich country protectionism – the case of aquaculture …... 34
5.6 Removing export quotas and licensing restrictions ……… 36
5.6A Rice export quota ……………………………………… 36
5.6B Rice export licensing restrictions ………………………. 38
5.6C Coffee and rice export deregulation and price crashing …. 39
5.6D Better ways of helping marginal rice farmers …………… 40
5.7 Removing import quotas and licensing restrictions
- fertiliser …………………………………………………….... 41
5.8 Export intensification, environmental degradation and
erosion of traditional practices ……………………………….. 42
5.8A Seeds, TRIPS and Women’s Knowledge ……………….. 42
5.8B High tech fixes versus traditional methods in agriculture ... 44
5.8C Environmental degradation and aquaculture …………... 45
5.9 Gender and food security, cash crops and diversification .. 49
5.9A Women and cash crops …………………………………. 49
5.9B Women and rice export deregulation ……………………. 50
Chapter 6: Trade Liberalisation and Economic Structure …………. 51
6.1 ‘Level Playing Field’ ………………………………………... 51
6.1A Gender and ‘level playing fields’ ………………………... 53
6.2 Cooperatives and ‘land markets’……………………………54
6.2A Gender, cooperatives and land markets …………………. 55
6.3 Agricultural Planning ………………………………………. 55
Chapter 7: Globalisation, Privatisation and Services ……………….. 56
7.1 Services in general ……………………………………………56
7.2 Credit ………………………………………………………… 58
Chapter 8: Agriculture, Industry and Globalisation ………………… 60
8.1 Textiles/garments …………………………………….……… 62

Annex 1: International Implementation of Neo-Liberal
Policy Prescriptions ……………………………………………….…… 64

References ………………………………………………………………. 68



















Macro Policy Analysis on Trade Liberalization,
Agriculture and Gender in Vietnam

By Pham, TuongVi and Michael Karadjis
With contribution from Han,Tuyet Mai
Center for Natural Resources and Environmental Studies, Vietnam National University, Hanoi


Introduction
Vietnam’s economic liberalisation process began in 1986, opening the economy to private and foreign capital, liberalising most domestic prices, and making the farmer household the basic unit of production. However, the Government continued to stress the dominant role of the state sector, that cooperatives would regain a significant role, and global trade liberalisation proceeded slowly.
Vietnam’s cautious reform led to economic growth of 7-8 per cent per annum in the 1990’s, and poverty crashed from 58 percent in 1993 to 29 percent today. Education and health indicators, already high for a country at Vietnam’s economic level, have improved. However, inequality has risen; in many poor regions, social indicators are far below the national average, particularly in mountainous areas, among ethnic minorities[1] and among the vast number of war disabled and Agent Orange victims.
Vietnam’s current program of deeper economic and foreign trade liberalisation results from the push by the International Monetary Fund (IMF) and the World Bank (WB) to ‘restructure’ economies of developing countries as “conditionalities” for development loans, and the dropping of national controls on trade to enter the World Trade Organisation (WTO).
Developing countries dropping trade barriers and “restructuring” their economies have rarely benefited; many have suffered disastrous failures. Can Vietnam can acquire the perceived benefits of while avoiding the negative impacts?
This research on foreign trade liberalisation focuses on agriculture, how this will impact on poverty, and how increasing or decreasing poverty, and other effects of trade liberalisation, affect gender inequality. However, agriculture is not isolated from trade liberalisation in industrial goods, ‘equitisation’ of SOE’s, private sector deregulation, new export industries, developing ‘land markets’, privatisation of basic services and other aspects of the liberalisation ‘package’.

Introduction to gender aspect of the study
Societies with greater gender discrimination tend to experience more poverty, slower economic growth and inferior living standards than societies with greater gender equality.[2] Hence, Vietnam must consider the impacts of trade liberalisation on women, particularly female farmers.
There are different groups of women affected in different ways:
§ Women who are the heads of households, accounting for 17 percent of rural households, who “are more vulnerable to the shocks that lead to a decline in living standards.”[3]
§ Women in male-headed households.
§ Female children, who are more likely to be withdrawn from school early due to poverty.
In assessing the impacts on gender, a number of aspects need to be taken into account.
Firstly, if trade liberalisation results in increased rural poverty, does this have a greater impact on women?
Secondly, do women stand to gain from the perceived ‘opportunities’ of trade liberalisation?
Thirdly, does the Vietnamese Government’s program specifically aim at alleviating the impact of these changes on women or promoting equality of opportunity regarding the perceived gains?
Women constitute approximately 54 per cent of the labour force in agriculture.[4] Agriculture is highly important to women as it produces food for their families who they are responsible for feeding, and is the principle source of formal and informal employment for rural women. Women participate in all agricultural activities, playing the main role in rice production, husbandry, processing and marketing.[5] Statistics of women’s participation underestimate the true amount of work carried out by women, because their work in the informal sector, especially that involving food production and processing for household and community consumption, is often not classified as ‘work’ and is disregarded in official statistics.
Most women work in the informal economy, undertaking household activities, subsistence agriculture, growing vegetables in home gardens, setting up tiny household businesses, and small-scale trading in local markets. Being the traditional food providers, increasing poverty drives women to intensify such activities to keep food on the table and children in school.
Families driven into poverty lose the ability to pay for basic services such as health and education, which IMF/WB policies have put ‘on the market’ in lending programs the last 20 years. This further expands women’s traditional caring role, reducing time to engage in income earning activities.
Hence increased poverty will drastically affect women. Despite the official equality of women in Vietnam’s constitution, poor rural areas are still influenced by traditional patriarchal culture emphasising women’s domestic and household economy burden. This limits their ability to escape poverty or take advantage of alleged ‘opportunities’, by attending classes to learn new skills, applying new farming technology, growing ‘high value’ crops or setting up ‘small and medium’ agricultural businesses that trade over wider areas or export.

Chapter 1: International driving forces of the trade liberalisation push

The push for greater trade and economic liberalisation stems from a number of sources:
§ Firstly, the WB and IMF have played a core role in setting Vietnam’s economic policy in the transition to trade liberalisation. The WB put forward policy proposals in 1998, called its Country Assistance Strategy (CAS), adoption of which was necessary for Vietnam to receive loans from the WB Poverty Reduction Support Credit (PRSC) and the IMF Poverty Reduction and Growth Facility (PRGF). Vietnam prepared an Interim Poverty Reduction Strategy Paper (I-PRSP), followed by consultation inside the country. The final PRSP, known as the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) was accepted by the WB/IMF in 2002 as a basis for lending as part of a poverty alleviation strategy.
§ Secondly, Vietnam is required to drop a host of trade barriers to goods from other Asian countries to attain full membership in the Asia Free Trade Area (AFTA) in 2006.
§ Third, the Bilateral Trade Agreement between Vietnam and the US mandates trade and investment liberalisation in relation to US companies and goods, based on WTO standards.
§ Finally, trade barriers to goods from around the world are to be progressively eliminated, and other deregulatory measures introduced, to join the WTO. Government leaders are now talking of rapid WTO entry, possibly as early as 2005.
1.1 World Bank and IMF policy conditionality in the PRSP process
In late 1998, the WB released a memorandum on Vietnam which stated that certain types of loans would be conditional on Vietnam carrying out policy changes. This conditionality was endorsed by the sixth meeting of the “international donor community” (ie large creditors such as IMF, WB, ADB) in December 1998. Some $US500 million in assistance was made contingent on Vietnam adopting a three point program for 1999, involving a state enterprise “reform” program with timetables and targets for SOE’s to be restructured, equitised, or sold, a banking reform program and a 3-year trade liberalisation plan, with clear targets for each year.
However, the WB/IMF claim their current lending strategy is different from previous programs in that:
§ It gives clearer emphasis to poverty reduction within the overall economic package
§ It is ‘country-owned’ because the PRSP is prepared by the country’s government – the CPRGS is based on the Communist Party’s 5-year and 10-year Socio-Economic Development Strategy papers at the 9th National Congress of April 2001
§ They involve consultation with the poor, who in a series of meetings are encouraged to give their opinions on the strategy and on their perceived needs

1.1A Country-owned?
However, according to the IMF, PRGF conditionality remains, but is “limited to measures that have a direct and critical impact on the program's macroeconomic objectives.”[6] Hence, the Government may draft any policies they like on poverty reduction, but the macro-economic framework is set by the lenders and must be accepted if the funds are to be made available. Regarding establishing “an environment conducive to private sector growth, trade liberalization, and financial sector development” responsibility would be shared between the IMF and the WB.[7]
The WB’s Country Assistance Strategy (CAS) is not “owned” by the country, its fundamentals must be agreed to. Its 1998 CAS for Vietnam 1999-2002[8] lays out “triggers” for Vietnam to be eligible for ‘high case’ lending. In 2001, the WB noted that the triggers “have not been met on trade policy. Specifically the initial trigger requiring that all qualitative restrictions (QR’s) should be converted to tariffs, and that the maximum tariff should be lowered to 40 percent have not been met. QR removal and tariff reduction are included as conditions in this proposed operation.”[9]
Other CAS triggers include equitation of 1000 SOE’s by 2000, with 100 having assets in excess of VND 15 billion, closure of unviable/insolvent banks and complete restructuring of viable ones by 1999,[10] stopping bank funding of ‘delinquent SOEs’, allowing all firms to register as importers in 1998, encouragement of Private Provision of Infrastructure (PPI), private sector entry and “self-financing” in energy and water, deregulating foreign equity investments in domestic enterprises[11], eliminating interest rate caps, allowing mortgages to be taken by foreign banks, and “a road map for trade reform for joining the WTO.”
It is thus clear that Vietnam’s policies on poverty may be “country-owned”, but the entire macro-economic framework has been unambiguously set as “conditions”.

1.1B Consultation with the poor – what do the poor say?
Vietnam undertook far more consultation with the poor than is the norm with IMF/WB programs, though still only involving consultation with six poor communes in a country of 80 million.
The Ministry of Planning and Investment (MPI) undertook consultations with poor communities in Tra Vinh, Vinh Long, Ho Chi Minh City, Ha Tinh, Quang Tri and Lao Cai, with teams from Oxfam GB, Catholic Relief Services, Save the Children UK, ActionAid, International Plan and the WB.
ActionAid carried out a consultation in four poor villages in Ha Tinh in 2001,[12] with 299 people (101 women and 198 men). The poor believed that poverty has declined due to “effective government policies” (credit, health support, irrigation and road construction, land allocation), agriculture extension services (crop and fruit production and protection, veterinary services, flexible credit services for inputs), improved technology (through which farmers increased rice production by 50 percent), support from organisations such as Bank for the Poor, KfW, and ActionAid which helped create jobs, increasing involvement in off-farm activities (opening shops, trading and working as labourers), reduction of population growth rate (to 1.04% in 2000) allowing more time for productive activities, and increasing export of seafood.”
Their priorities centred on rural development so that farmers could produce more, development of off-farm activities, better infrastructure, improved access to education and health, people’s participation in planning and managing development and help in coping with natural disasters.
Villagers have problems entering into cash crop and commodity production due to lack of funds for mechanized implements, good seed and livestock, dependence on outside sources for seed, and unstable markets with low prices. The poor are forced to sell at unfavorable times (straight after harvest when prices are low) to pay loans, fees, contributions or for any urgent expenditure.
While much diversification has taken place (aquaculture, fruit-growing, industrial crops) as well as increasing off-farm employment (trading, small scale processing, carpentry, forestry), none are considered stable income sources. Villagers were advised to grow sugarcane and garlic but later could find no market, a typical case of overproduction for unstable export markets for cash crops.
Villagers requested Government agricultural land mapping for suitable crop selection, state assistance in identification of species of crop or livestock which are suitable for local economic and natural conditions, increased agricultural prices, price support policies, and provision of long and short term credit, including continuation of current preferential interest rates for poor households – all policies directly counter to WB advice.[13] They also advocated reduction of agricultural tax, fees and contributions, and health and social insurance and crop/livestock insurance for farmers.
Since 1999, they claim loan sizes have increased, credit is more accessible and procedures simplified, sources for credit have expanded (women’s credit fund, job creation fund, hunger eradication and poverty reduction fund), and monthly interest has been reduced from 1.2% to 0.5%. They advocated special provision for loan extension or cancellation for poor households who could not repay loans in time. One group proposed a credit scheme with no interest for poor households, connected to the existing well run self rotating credit units.
Women had less opportunity to take part in social activities and decision-making, and said that the mother and child care programme, gender training and awareness raising, and putting women’s names on documents such as the Land Tenure Certificate, were ways to ensure that women benefit. Many women believed commercial interest rates were still high, loan amounts low and the lending cycle short. They said more women should participate in training in using loans for production.
Villagers suggested that disabled students’ educational contributions should be reduced or exempted. They claimed that incorrect classification of poor households occurs, and called for better mobilisation of funds for education, and better pay for teachers. They also complained that only the head of the certified poor household gets a card, and the procedures for using cards are complicated. Getting treatment on time means paying extra. Poor facilities, low budget, lack of sufficient commune staff and the distance to the district health center were other problems. They asked for equipment and medicine for remote areas and free medicine for elderly people and children.
They also called for reduction of all contributions and fees for the poor, adjustment of land allocation in favour of poor households, and vocational training for children of poor households. They claimed that families falling into poverty did receive Government assistance, but to make this more effective they wanted cooperation between the responsible persons and the target group, close participatory monitoring, and evaluation. Construction projects should employ labour from the local area.
Clearly, there was zero in the discussion re global trade and economic liberalisation policies which are going to have a massive impact on the poor and which are fundamental to the IMF/WB lending strategy. Most of what was recommended by the poor can be described as state interventionist, subsidy-based and redistributive, rather than ‘market fundamentalist’.
Similarly, in Tra Vinh and Vinh Long, the poor want direct links to exporters rather than going through private middlemen, subsidised prices and guaranteed markets, subsidised credit and loans without collateral, and want the country to import less of what can be produced at home. These are all anti-liberalisation views. Unfortunately, some NGO’s felt obliged to add inherited neo-liberal wisdom. Regarding subsidised credit, Oxfam added “though this is unsustainable”, and regarding subsidised crop prices, CRS added “however, international best practice shows this is not effective.”[14] This seems inappropriate for NGO’s to add to reports on the views of the poor.

1.1C World Bank recommendations on agriculture
Policy directions for Vietnamese agriculture, consistent with the trade liberalisation framework, were advanced by the World Bank in 1998.[15] The major recommendations were as follows:
§ The state should not try to plan production, such as setting aside land for staples. “Agricultural production and marketing controls, including restrictions on alternative uses of paddy land, which inhibit diversification into higher valued crops” should be removed; “diversification should proceed as farmers freely responded to changes in market prices.”
§ There should be no import or export quotas even on strategic products, and state trading bodies should also have no more rights than private companies or foreign multinationals in import and export of any product. The export quota on rice and import restrictions on sugar, fertilizers, and seeds should be removed, and import/export of these products should be opened further to private businesses. The quantitative and licensing restrictions allegedly result in lower prices and higher costs for farmers.
§ Development through the private sector is preferred, because private firms, whose aim is profit, produce more efficiently. A “level playing-field” for state, domestic private and foreign enterprises, “irrespective of type of ownership, size, area of industrial activity, or location”, disallowing the state preference in any area it believes necessary to temper the “market” or to build national industries. “Only enterprises able to earn profits should survive”.
§ The competitive spirit of poor people developing tiny household businesses will lift them out of poverty; the more successful will become ‘small and medium enterprises’ which will generate employment for those who fail. However, even these small local private firms should not be protected against multinationals
§ Ceilings on land holdings should be removed, as they prevent ‘efficient’ farmers gaining more land; such farmers will invest in ‘small and medium’ businesses, providing jobs to the poor. The period of land-use rights should be lengthened to 50 years. “A functioning market in land-use rights” would allow banks “to have use-rights to mortgaged land so that they can transfer these rights at market value;” at present, “even where land use rights are used as collateral, creditors are not allowed to exchange, transfer, or lease them.” “Those few who may lose all means of livelihood”, should “receive the full value of their land,” and be covered by “social safety nets.”
§ Cooperatives should not be given preference over other forms of agricultural organisation; “the Government should not discriminate in favor of them.”
§ Trade protection and credit policy favours capital intensive state industries which do not create employment; if such industries go under when unprotected, the country can more cheaply import such goods, leaving more credit available for labour–intensive export industries and agriculture.
§ Moreover, such protection raises the cost of “plant, machinery, and other purchased inputs,” so if they collapse it will mean cheaper import prices for inputs into new ‘competitive’ industries, and poverty will be directly reduced if the country imports more consumer goods, as the poor will pay lower prices than for locally produced goods
§ Services like water, electricity, telecommunications, health and education should be open to the private sector (ie multinationals), bringing ‘more efficient services’ to the poor. “Private sector investment in energy” should be encouraged, and irrigation, water supply and other infrastructure should be provided “on the basis of full or partial cost recovery.”
§ Foreign banks should have the same rights as local ones in all fields, and local and foreign investors should have the right to mortgage land to foreign banks. There should be no caps on interest rates, rural credit to be supplied at market interest rates, and subsidised credit (which is “unfair competition to microfinance programs based on market interest rates”) should be abolished. This would lead to greater credit supplies and hence more access for the poor.
1.2 Asia Free Trade Area (AFTA)
Membership of the Asia Free Trade Area (AFTA) requires tariffs on Asian products to be reduced to a maximum of 0-5 per cent by 2005 (brought ahead from the original 2006 deadline). Vietnam has so far put 5,500 out of its 6,400 import tariffs on the AFTA inclusion list (85%), and pledged to move 760 items off the temporary exclusion as of January 2003, meaning tariffs on 96 per cent of all goods would be reduced by early 2003, though this has now been extended to July 2003.
Products like vegetable oil, chemicals, fertiliser, rubber, pulp and paper, wood and rattan products, with tariff rates of over 20 percent will have them reduced to 0-5 percent by 2003; for those with rates already under 20 percent, the rate was already reduced to 0-5 percent as of January 2001. For products such as cement, building materials, machinery, equipment, iron and steel, rates over 20 per cent (some around 40-50 percent) will be reduced to 20 per cent by 2003 and 0-5 percent by 2005; those with tariffs below 20 percent will have them reduced to 0-5 percent in 2003.
For most goods, tariffs must be reduced to zero by 2013, 60 per cent of them by 2006, and for information and communication technology products by 2008. All quantitative restrictions must be lifted by 2003, and all other non-tariff barriers (foreign exchange restraints etc) by 2006.
There is also a “sensitive list” covering unprocessed agricultural products under 51 tariffs. They must undergo full tariff reduction by 2013. However, if Vietnam enters the WTO earlier than this, it may have to bring this date forward. A “temporary exclusion list” of 139 products will not have protection reduced for the foreseeable future, though this is currently under discussion.[16]
1.3 World Trade Organisation (WTO)
Vietnam now aims to attain membership of the WTO by 2005-07. The impacts of this will be far greater than AFTA membership. While there are richer and poorer countries within AFTA, the economic distance between them does not compare with that between poor countries and the richest developed countries in the WTO.
The purported benefits of this are that, with the future dropping of trade barriers in rich countries to Vietnamese products, the latter, with their cheaper cost of production, will acquire large new markets. But the dropping of Vietnam’s trade barriers to rich country products will mean these products, produced with the latest technology and usually heavily subsidised, will also massively enter the Vietnamese market and compete with local products.
The main agricultural/trade policy changes Vietnam will need to implement are the following, contained in the WTO Agreement on Agriculture (AoA):
Firstly, removal of “distortions” to imports. This means firstly removing all non-tariff barriers (eg quotas and qualitative restrictions) and replacing them with tariffs, and then the radical lowering of these tariffs. Under ‘minimum market access’ provisions, all countries must allow at least 4 per cent access to any agricultural product, even those in which it is self-sufficient.
Secondly, “distortions” to exports, such as export subsidies, quotas and restrictions, must be removed. While Vietnam has no agricultural export subsidies, there are export quotas, and sometimes small duties on successful exports to finance the Agricultural Price Stabilisation Fund (APSF), to support producer prices when they are too low.
Thirdly, Vietnam will have to remove “distortions” to domestic production, which may give an “unfair” advantage to local producers. These may include the APSF,[17] or the subsidised prices of many essential goods (eg seeds, fertilisers) offered to poor farmers by agricultural SOE’s.[18]
Next, some farm products are or have been subject to import licenses (seeds, fertilisers, animal feed, livestock, farm chemicals, veterinary medicines). These “will need to be administered in a far more transparent and rules-driven manner.”[19] The state will be unable to control such imports via SOE’s or restrictions on private sector or FIE importers.
Finally, the state would not be allowed to offer any preferences to State Trading Enterprises (STE’s), removing the ability of the state to have any control over quantities or prices of imports or exports. “Reform could take the form of privatisation (or at least corporatisation) and de-monopolisation of STE’s to make them compete with the private sector.” Likewise, the General and Special Corporations set up in the 1990’s, in which large numbers of SOE’s are joined in a corporate structure and cover many aspects of the market, “may be viewed as barriers to entry by would-be importers to (or foreign investors in) Vietnam of competing products.[20] In particular, several large agricultural SOE’s (eg the Northern and Southern Food Corporations) which may cover inputs, production, processing, distribution and export, may be considered “barriers”.
WTO membership also includes other policies which will impact greatly on Vietnam’s economy:
According to the WTO TRIPS agreement, intellectual property rights must be extended to genetic resources for food and agriculture, specifically micro-organisms, including genetically engineered organisms. TRIPS, which protects the patents of private companies and individuals, also discriminates against indigenous and traditional farmers and communities for whom knowledge is collective and intergenerational. “Intellectual property rights are against the very nature of this kind of knowledge,” according to Dr. Sothi Rachagan, regional director of Consumers International Regional Office for Asia and the Pacific. “Patent holders or companies expropriate such knowledge from the true innovators and transfer it to themselves by ‘treating’ it in a laboratory. Centuries of tending and selection of seed by communities are not acknowledged and someone who builds on this inherited knowledge is allowed IPR to become the legal owner of all this community knowledge.”[21] This has led to the unfair patenting of their agricultural biodiversity by corporations, examples of which have been documented by Action Aid.[22]
Secondly, according to the WTO TRIMS agreement, many devices which developing countries have long used to make foreign investment work better for recipient countries will now be banned, as they constitute a “barrier”. This includes localisation rates (setting a percentage of locally produced components which must be used in assembly) and conditioning investment on technology transfer.[23]
Thirdly, full trade liberalisation under the WTO opens all services to ‘competition’ without any barriers to the private sector or foreign TNC’s. ‘Services’ range from health and education to water, electricity and communications to banking, insurance and tourism (see Chapter 7).
1.4 Bilateral Trade Agreement (BTA)
The Bilateral Trade Agreement (BTA) with the US is based on WTO rules, so along with AFTA, it is a ‘mini-WTO’. All the TRIPS, TRIMS, equal ‘national treatment’ of US enterprises and services privatisation required by the WTO are in the BTA. US enterprises will be able to enter joint ventures with Vietnamese partners in all products, including majority ownership after 3 years; after 7 years, 100 percent US-owned companies will be able to to engage in trading activities in all products.
Some TRIPS provisions have been dubbed ‘TRIPS Plus’ because they strengthen WTO provisions. The BTA states that Vietnam “shall promptly make every effort to accede to” UPOV, while there is no explicit reference to UPOV in the WTO. UPOV (International Convention for the Protection of New Varieties of Plants) is a special kind of patent system crafted in Europe for commercial plant breeders, to which mostly industrialised countries subscribe.[24] UPOV does not allow farmers to store, replant or develop new plants from protected varieties, they must buy new seeds every year.
The BTA also mandates Vietnam to provide patent protection on all forms of plants and animals that are not varieties, as well as inventions that encompass more than one variety, whereas TRIPS allows the exclusion of plants and animals from patent protection. It also stresses that, while “essentially biological processes for the production of plants or animals” may be excluded from patentability, this does not include “microbiological processes”.
Following is a summary of some of the main changes in relation to trade under the BTA:
Within 3 years of the BTA, tariffs have to be cut by 25-50 per cent on most agricultural products.
All quantitative restrictions will have to be removed on imports of meat, milk, citrus, corn, soybeans, oils, vegetables, fruits, nuts, fruit juices, wines, instant coffee, coffee products and shrimp food within 3-5 years, and on sugar within 10 years. On industrial products, they must be removed on many products. Those most relevant to rural areas include fertilisers, ceramic products, paper and paper products and silk fabrics in 3-5 years.
The only export quantitative restrictions are those Vietnam from time to time imposes on rice; in the BTA, the Government has insisted on an “unbound” situation for rice exports, meaning that Vietnam is not bound to phase them out such restrictions.
A number of imports currently subject to state trading, such as fertilisers, must go within 5 years; the few exports subject to state trading (including rice) have remained in the “unbound” category.
Next are the various restrictions on import trading and distribution rights. Such restrictions will have to be phased out for meat, milk, oils, maize, soybeans, animal feed, vegetables, fruits, nuts, fruit juices in 3-5 years. Restrictions of import trading rights will have to be phased out for wheat and sugar must go within 5-6 years, but restrictions on distribution rights are “unbound.” Restrictions on both import and distribution rights on rice remain “unbound”. On industrial, those most relevant to agriculture are paper and paper products, cotton and silk fabrics and ceramic products within 5 years; import rights restrictions on sugar, salt and antibiotics in 3 years, and on fertilisers and insecticides in 5 years, while distribution rights restriction on all these products remain “unbound.”
The few restrictions on export trading rights will have to be phased out in 7 years for coffee and rubber, while such restrictions will remain “unbound” for rice.

Chapter 2: Vietnamese Government Policy
2.1 Poverty Alleviation
Vietnam’s national poverty alleviation program has spent 21 trillion Dong ($1.4 billion) from 1992 to 2002 (9.6 trillion in 1999-2000 alone), plus various other programs and the Bank of the Poor.
The CPRGS aims to double GDP and reduce poverty by two fifths (and food poverty by three quarters) by 2010. Targets include raising to 90 percent the number of communes connected to the electricity grid, and to 85 percent the number of rural households with clean water supply, universalising secondary education, markedly cutting infant and maternal mortality and child malnutrition, ensuring that 100 percent of communes have clinics, that 80 percent of communes have doctors and 100 percent of villages have at least primary health-care staff.
This involves markedly expanding the budgets for agricultural development, education, health and targeted poverty programs, especially in mountainous and ethnic minority areas. However, apart from education, these increases merely reflect an expanded overall budget, based on growth targets.
The strategy aims to increase the access of the poor to basic health and education through reductions and exemptions of fees, extension of free health insurance, exempting ethnic minorities and children under 6 from health charges, allowing the poor to pay later, and extending the boarding school system for remote regions. It also calls for maintaining subsidies on prices and transport of essential goods in disadvantaged areas, loans with zero interest for poor communes to develop ‘self-supplying’ electricity systems, and exempting poor and ethnic minority households from various trade and production taxes.[25]
2.2 Trade and Economic Liberalisation
Much of the poverty program looks good, but to gain ‘donor’ finance to carry it out, the country has to accept a trade and economic liberalisation program. Integral to the philosophy behind the CPRGS is that rapid trade liberalisation will bring about rapid economic growth, enabling Vietnam to amass the resources to carry out poverty alleviation. However, there are certain problems with this:
Firstly, whether or not these economic measures lead to economic growth depends as much on the world economy as on the intentions of the program.
Secondly, whether this economic growth actually leads to poverty reduction depends on how well targeted the anti-poverty measures are.
Thirdly, if trade liberalisation actively creates poverty, it may reverse or at best neutralise the effects of the anti-poverty measures.
Finally, trade liberalisation may reduce government revenue for fighting poverty. Drastic cuts to import and export taxes represent an immediate cut – they account for 20 percent of government revenues.[26] The collapse of SOE’s with protection loss could also be significant - they account for 50 per cent of revenues.[27] Only 10.9 percent comes from the non-state sector, there has been no revenue growth from the private SME boom, and even these SME’s are under threat from trade liberalisation.
The major aspects of Vietnamese economic policy in relation to ‘donor’ conditionalities (meaning they had to be undertaken prior to IMF/WB acceptance of the CPRGS in 2002) or mere ‘recommendations’, are as follows:
Private sector development, a conditionality. Vietnam passed the Enterprise Law in 2000 to facilitate the growth of private SME’s, leading to a quadrupling of the number of registered private firms in the last three years, and a doubling of employment by this sector from 400,000 to 800,000. This has clearly had a beneficial effect on poverty reduction. It also revised the Foreign Investment Law to permit automatic registration of export oriented investments, also a conditionality.
SOE equitisation, also a conditionality. By 2002, 450 SOE’s had been equitised, including around 290 ‘major’ equitisations (i.e. selling more than 65 percent shares to non-state shareholders with the state maintaining dominant or special shares) over 4 years. However, the SOE’s equitised were mostly tiny, accounting for some 2 per cent of SOE capital. It further adopted a 5-year SOE reform program with annual targets, covering a third of all SOEs, though again accounting for a small percentage of SOE capital. However, before the WB releases the ‘second tranche’ money, the Government must carry out a great deal more SOE ‘reform’, including lifting ceilings of private and foreign shareholdings and deregulating private entry into certain SOE sectors.
Thus the government is emphasising private sector growth in areas outside the interest of the dominant state companies, rather than privatisation. The ‘slowness’ of SOE equitisation (even in the agreed sectors) decried by the Bank reflects the Government’s real concern about avoiding mass lay-offs. The SOE redundancy package is overall generous, but workers appear to prefer to stay put at this stage; thankfully, the Government seems unwilling to argue with them. Moreover, the stress on ‘equitisation’ rather than outright privatisation, and the Government’s stress on maintaining dominant state shares, or ruling out any equitisation, in most strategic areas, indicates resistance to extreme neo-liberal plans when compared to many other country’s PRSP’s and SAP’s. However, this will be challenged by BTA and WTO regulations in the future.
‘Real land market’ and lifting the ceilings on land holdings to allow land concentration, a WB ‘recommendation’. There is a clear change from the CPV’s ‘Five Year Plan for Socio-Economic Development’ at the 8th National Congress in 1996 (“to control the accumulation of arable land, promoting commodity production while preventing farmers’ landlessness) and the 9th National Congress in 2001 (“to develop real estate markets, including land use rights ones. To facilitate transfer of land use rights … to facilitate accumulation and concentration of farm land in advantaged regions”) Yet in the CPRGS, while generally pledging to “continue to revise and amend land laws to ensure security and better implementation of land use rights (long term tenure, transfer, inheritance, collateral), there are still no clear changes such as removing land ceilings, extending lease periods or fully privatising land.
The Government still officially imposes ceilings on land accumulation, though there are indications the Party is moving to “permit larger land holdings.”[28] However, the CPRGS also pledges to “provide integrated support in the form of credit, seeds and knowledge to help the poor avoid selling or mortgaging their land,” to “allocate unused land to rural dwellers” and to “ensure the entitlement of individual and collective land use rights of ethnic minorities and mountainous people.” Media reports indicate land is being distributed among landless households, particularly in the two regions most afflicted by landlessness, the Central Highlands and the Mekong Delta.[29]
Given this, the continued stress on the “farm economy” may refer mostly to larger plots gained by farmers who take initiative to clear “wasteland” rather than by seizing the land of others, or to normal sized farms engaging in more commercial activity. However, some farms are very large, making the official land ceiling irrelevant; reports on farmers with 600 hectare farms are not uncommon;[30] and land concentration is taking place to due seizure of land of indebted farmers.[31]
No “preference” for cooperatives, a WB ‘recommendation’. Thankfully, this has been ignored. Like the 8th Congress, the 9th National Congress continues to call for “encouraging the development of the collective economic sector. To complete the restructuring of cooperatives and revise the Law on Cooperatives and make it more suitable to the new situation. To develop various forms of cooperatives. To work out guidelines for training cooperative personnel.”
The CPRGS also has a strong orientation towards encouraging cooperatives. Relevant aspects include “continue to strengthen the collective economy with different types and diverse forms and sizes, on the principles of voluntary membership, democracy, transparency, and efficiency and empowerment of participants of cooperatives … encourage the development of formal and informal forms of assistance among farmers. Strengthen the position of farmers in cooperatives to improve their access to bank credit, insurance, extension services and marketing. (p72).
Further, to resolve “outstanding debts of old cooperatives … dissolve cooperatives whose existence is only nominal and which have no economic basis to develop, and whose members’ participation is not on a voluntary basis (p51). These measures seem in response to criticisms that some of the new cooperatives were making some of the same mistakes as the old cooperatives.[32] In more detail, a recent “Government Action Plan” calls for “completing project for amending and supplementing the Co-ops law to perfect new co-op models; simplifying administrative procedures for co-ops; allowing a wider range of capital contribution models; defining transparent management of people’s committees at all levels; and defining the responsibility of the director board.[33]
This plan also incorporates other elements such as “refunding co-ops their investment in infrastructure”, “income tax breaks for agricultural, forestry and fishery co-ops,” “studying co-ops needs for training”, “providing social insurance to employees of co-ops,” and “drafting instructions for a vocational training policy for the co-op sector.”
CARE International is working on cooperative development together with MARD and the Farmers’ Federation, but rather than simply pushing the current model, they are putting resources into actual spontaneous forms of cooperation being carried out by farmers, then later encouraging them to formally register as cooperatives.[34] MARD is to launch a full review of cooperatives, to be complete by October.
The Vietnamese media has also been continually reporting on preferential policies for cooperatives, including subsidising loan interest, investing in coops, paying the salaries of managers and accountants and now a decree is to be passed by the National Assembly “allotting land free of charge and granting certificates of land use to agricultural cooperatives.”[35]
A series of trade liberalisation measures adopted by the Government were also conditionalities, including adopting the AFTA road map, implementing the BTA, working towards WTO entry, liberalising export trading rights for all domestic enterprises and expanding those rights of foreign enterprises, and removing Qualitative Restrictions from 8 imports (including fertilisers and ceramics). Before the World Bank releases the ‘second tranche’ money, Vietnam also had to remove QRs on another 6 products by early 2003 (cement, steel, glass, paper, vegetable oil, tiles).
The policy of liberalising import/export for private enterprises in all products had been was agreed to by the CPV’s 9th Congress (“to encourage enterprises of all economic sectors to engage in importing and exporting items permitted by law”), whereas the 8th Congress allowed private sector involvement in import/export “under the control and guidance of the State” but defined certain items “the trading of which is conducted by the state only, or is regulated by quotas.” However, despite this, most agricultural exports are still controlled by the state in practice due to “stringent regulatory requirements”[36] and lack of large scale capacity by many private enterprises.
2.2 Gender
The Communist Party of Vietnam has had a long commitment to women’s equality, enshrined in highly progressive legislation. Its four months’ paid maternity leave leaves many developed countries behind. Twenty seven percent of national Assembly members are women, the highest in Asia and 9th highest in the world, though women’s representation at commune, district and provincial levels is lower (14-20 percent). Vietnam has the highest female participation in the labour force in the region, at 80 per cent, and has preferential policies for women’s employment.[37]
The initial I-PRSP had little to say on gender, and as noted below (3.2), neither did the World Bank’s CAS, which claimed that special programs aimed at women were unnecessary. However, a National Plan of Action was worked on by a number of Vietnamese gender activists in the Women's Union and the National Committee for the Advancement of Women (NCAW), and their agenda approved by the government in 1997, including training 16,700 women candidates for commune, district and provincial People’s Committee elections.
The NCAW put out a new National Plan, approved by the Government in January 2002,[38] and its recommendations have been partially incorporated into the CPRGS. The WB has given support to the Government’s Plan, providing “a fund of $50,000 for organizing training courses for local officers in order to incorporate gender issues effectively in the implementation of the CPRGS.”[39] The new Marriage and Family Law in 2000 stipulates than the names of both husband and wife must be on land-use certificates, a major NCAW recommendation.
The major gender-related aspects of the CPRGS include ensuring the names of both husband and wife are on land-use certificates by 2005, increasing the participation of women in “all agencies, sectors and enterprises by 3-5 percent by 2010, and establishing a Learning Promotion Fund and set targets for women at different levels in training and disciplines. The CPRGS aims to reduce women’s overburden in domestic work through investing in small-scale technologies to serve family needs in clean water and energy, by greatly expanding the kindergarten and nursery school system, and by “launching campaigns to propagate and educate about family responsibility sharing.” All “prototype prejudice against women” is to be removed from textbooks.
More generally, there are many statements about improving women’s access to education, education, reproductive and family planning services, credit and fighting domestic violence, though strategies and targets are unclear in the document.
However, organisations in charge of implementing the plan like NCFAW and MARD have limited capacity to develop gender-mainstreamed plans due to lack of resources, limited gender mainstreaming technical expertise and the limited linkages with key MARD departments, institutions and provincial DARDs.[40] A further problem is that even the national poverty reduction program reveals gender bias in implementation. Nearly 70% of its resources have been invested in infrastructure, where most expenditure for construction was paid for male labour. Although women are a target group, there is a lack of specific goals, objectives, methodologies and mechanisms to help women access the program.[41]
2.3 NGO comments on the strategy
Three NGO’s, Oxfam GB, Save the Children UK and the World Population Foundation, put out the following major concerns about ‘donor’ strategies and the Government strategies embodied in the CPRGS[42]:
Pace of trade liberalisation. The social impacts of the programme have not been carried out. Pace and sequencing is needed to ensure that poor and vulnerable equally benefit. Currently a fast pace is being encouraged, including rapid WTO entry. Improved market access could aid poverty reduction if linked to strategies for extending opportunities to the poor and over-coming gender-based barriers to market access. Donors need to develop the skills of Vietnamese Government to make appropriate and informed choices about pace and sequencing of liberalisation. The NGO’s advocate Vietnam protecting its market, subsidising agriculture and maintaining high tariffs. Rapid import liberalisation has a weak record on poverty reduction.
Export led growth. The poorest and most vulnerable are being left behind as scarce resources are being channelled towards export led growth, which the poor are excluded from due to not being able to access techniques and support services, which they are required to contribute to. So they are becoming landless and natural resource bases are being exploited unsustainably.
‘Socialisation’ (cost recovery for services through local ‘mobilisation’ of funds) policies for health and education are inconsistent with pro-poor service delivery. Whatever the intention, it is interpreted at grass-roots level almost exclusively as charging fees for service. The poor are not consistently excluded from this policy. One of the most common complaints from poor people during the grass-roots consultation was the burden of health charges (cost of medicines, payments to health staff, travel costs) and education charges (tuition fees and non-tuition costs such as construction fees, cleaning fees, maintenance fees) on household incomes. Exemptions are not working.
A WHO research found that cost recovery in the health sector in Vietnam has pushed a further 4% of the population (or approximately 3,000,000 people) into poverty[43]. The new decree on setting up a health fund for the poor is likely to face the same kinds of operational difficulties experienced by other social funds: transparency, accountability, stigma/discrimination, eligibility.
In education, while government policy is to increase the proportion of the state budget for education from 15% to 20% (2010), it is also to increase the proportion of the education budget funded by socialisation 35% in 2010[44]
Decree 10 authorises public service institutions including schools and health centres to raise revenues and manage expenditure locally, which has the potential to encourage even greater demands by these services on the pockets of the poor
Resource allocation. Regions where 64% of the poor live will receive 36% of the Public Investment Program budget, and only 11.5% goes to investment in health and education, whereas 56% goes to industry, transport and telecommunications.
Public Private Partnerships (PPPs). Donor enthusiasm for in the service sector, and the path to WTO entry and the GATS, raises concerns about how pro-poor will future services be if PPPs are extended beyond banking, insurance, etc to health, education and water.
Implementation. There are many concerns about the capacity of government to implement the CPRGS. These concerns are raised by the poor themselves during the grass-roots consultations.
Decentralisation. Some of the concerns about implementation stem from the decentralisation of resource allocation. This assumes a high level of capacity at the grassroots level. In reality, what communes really need does not always match what they receive from provinces, and central agencies use only provincial requests when allocating resources. In addition, it is making provinces and districts make up deficits of recurrent expenditure, forcing the poor to pay more for services.
Targeting problems. The poorest are often not in practice able to access target poverty programs so they are excluded from opportunities for vocational training. Access to programs is not consistent, eg, unregistered households cannot benefit. In the poverty consultations, the poor often pointed to incorrect targeting of the poor.
Administrative reform is being implemented without assessment of needs resulting in less resources at local level. Good governance is not only about improving public administration. Donors focus of resources and capacity building at national level will not deliver positive outcomes, more effort needs to be made to place resources and training at provincial, district and commune levels where the need is greatest.
Special concerns. Much remains to be done for people living with HIV/AIDS in the area of access to care, especially to drugs and treatment, and it is necessary to dissipate stigma and discrimination, and provide affordable and accessible drugs to all PLWA. Care and support for people living with disabilities is still weak. Progressive Government laws and policies, such as inclusive education for disabled children, employment of people with disabilities, and accessibility to buildings and transportation services, must be adhered to in the implementation of economic development and poverty reduction loans and grants.

Chapter 3: Rationale for trade and economic liberalisation
3.1 Agriculture
The major assumption is that these measures will promote economic growth, which will lift people out of poverty. The World Bank claims that the ‘more globalised’ economies around the world have grown the fastest and been most successful in reducing poverty, while those which have been slow in ‘globalising’ have remained behind.
While therefore Vietnam is included as a ‘globaliser’, the Bank believes Vietnam is not doing it fast enough, as it still has a partly protected and state-controlled economy, and has been slow with trade liberalisation. By freeing the ‘market’ of all ‘distortions’, economic growth will be more rapid and people will set up ‘small and medium’ enterprises, lifting themselves out of poverty.
‘Trade liberalisation’ covers a number of different yet related policy prescriptions. The two fundamental aspects are:
§ Abolition of all restrictions on ‘free trade’ between countries, including tariffs, quotas and quantitative restrictions on the import and export of goods, and of all investment restrictions - foreign companies and goods should have exactly the same rights as local counterparts, with ‘no discrimination’; this is called ‘national treatment’. If goods and investment flow ‘freely’ around the world, countries will only produce what they can most cheaply, and increased world trade will boost economic activity and employment
§ “Export-oriented growth” is promoted involving countries exploiting their “comparative advantage” by exporting what they can produce “efficiently” and cheaply, such as cash crops, and these export earnings can pay for imports of other goods which are more cheaply produced in other countries. ‘Food security’ therefore should not be sought through self-sufficiency in staples, but through having enough cash from export earnings to buy food.
With respect to agriculture, major policy directions for Vietnam consistent with this framework, advanced by the World Bank in 1998,[45] give further rationale in more detail (see above 1.1C).
3.2 Gender
There is little in the literature justifying trade liberalisation which specifically claims to be beneficial to women. A recent evaluation by the World Bank itself found that of over 3000 of its loan agreements, only seven per cent contained references to gender, while another review showed that gender has been little analysed or targeted at any project stage. Bank and IMF staff “merely include a paragraph or two on gender issues.”[46]
This may be due to the WB view, pushed in its Women In Development Programme, that 'free markets' broadly support the 'empowerment of women' and gender equality', as women's rights allegedly promote high value and 'efficiency' in production.[47]
Poor women should have the same rights as men to participate in small business development or to switch to ‘higher value crops’ for export to lift themselves out of poverty. If women’s special difficulties in entering such fields are recognised, it is asserted that they can be addressed by ensuring equal access to credit schemes or classes, without it being clear how this can be done.
The World Bank specifically denied women needed special targeting. While the Bank’s Country Assistance Scheme (CAS) imposed conditions on Vietnam regarding macro-economic policy, the only clear reference to gender is the following:
“The Bank will seek to implement (the Government’s National Plan of Action for the Advancement of Women) through its projects and by mainstreaming gender issues in our work. While women and girls in Vietnam may be disadvantaged in a variety of ways, programs targeted to women do not appear to be warranted. Social indicators for women and girls are relatively good and do not show wide gaps in the access of males and females to social services. Hence, our strategy for attaining gender equity will be to try and ensure that women and men benefit equally from all our work rather than to have special projects and programs targeted to women and girls.”[48]
If failure in various inherently risky business schemes falls more heavily on women, leading to massive debt or landlessness, then women, like other ‘losers’, will be able to find employment in ‘small and medium’ businesses set up by those more successful at playing “the laws of the market.”
Newer export oriented industries like garment and footwear employ a high percentage of women, including rural migrants, so this is seen to be particularly beneficial for women. Women losing their land or driven into debt can migrate to cities to find better paying jobs and achieve a greater measure of independence. If more women than men lost their jobs during the state enterprise ‘restructuring’ around 1990, this time men will be more affected as they make up a greater proportion of the workers in state heavy industry which may be affected by the loss of protection.
In addition, women use services more than men, being responsible for children’s education and health care, for bringing water to the household, for cooking and therefore household heating and power, so they will benefit from ‘more efficient’ services which trade liberalisation and foreign investment into the service sector will allegedly bring. Finally, as the main family purchasers, women will allegedly benefit from the cheaper prices of many imported manufactured goods replacing expensive locally-produced goods.

Chapter 4: Problems with the Rationale
4.1 Agriculture
The World Bank claim that the fastest ‘globalisers’ have also been those which have grown most rapidly and reduced poverty most markedly could not be further from the truth. Argentina, for example, was hailed in the 1990’s as a leading free market ‘liberaliser’; now while it produces enough food to feed twice its population, over half the population lives in dire poverty.[49] Across Latin America, 20 years of complete ‘globalisation’ has led to an average of one per cent growth in GDP per capita over the entire period, and this figure masks the enormous growth in inequality over that period. According to a US intelligence agency, “poverty is higher today than it was a decade ago in both absolute and percentage terms, and region-wide unemployment is at its highest levels in 20 years.”[50]
The fact that Africa as a whole has been left far behind is widely known, and most African countries have been the world’s fastest trade liberalisers.[51] The Bank’s assertion is in fact based not on trade liberalisation policy but on the volume of world trade a country engages in - many east Asian nations engage in a high volume of trade and many of them have sharply reduced poverty. Yet those countries that have reduced poverty most successfully – China, Thailand and Vietnam – have not been rapid import liberalisers at all, but quite the opposite.[52] And in the case of Thailand and other east Asian nations (eg Indonesia), it was precisely the level of ‘openness’ to the world economy that produced the 1997 crash, resulting in dramatic increases in poverty, further accentuated by the IMF programs which imposed even more of this ‘openness’.
According to noted activist Walden Bello, “the United Nations Development Program estimates that under the WTO regime, in the period 1995 to 2004, the 48 least developed countries will actually be worse off by $600 million a year, with sub-Saharan Africa actually worse off by $1.2 billion!”[53] A recent UNCTAD study covering 124 countries showed that during a period of greater global trade liberalization from 1965 to 1990, the income share of the richest 20 per cent of the world's population rose from 69 to 83 per cent of total global income.
The fundamental problem with the rationale is that developing countries tend to have ‘comparative advantage’ in agricultural products or in some low-wage, low-skilled sections of industry, which sell for low prices on the world market; developed countries sell more expensive industrial and high tech goods at high prices. Therefore if a developing country cannot protect what industries it does have, it has to import a greater volume of expensive goods with less money earned from agricultural exports.
Further, the more exports of these agricultural goods are pumped out onto the world market, in competition with other developing countries, the more the world market is flooded and hence prices collapse, further reducing the ability of the country to buy imports, while also impoverishing those farmers who had been producing that crop.
Vietnam is about to make major cuts in protection of its industries (and agricultural products), but its trade deficit last year, before the AFTA deadline, reached US$2.77 billion, the highest figure in recent years.[54]
Apart from this immense power difference between developed and developing countries, another problem with the rationale for trade liberalisation is the fact that the Agreement on Agriculture (AoA) is stacked against developing countries. By first banning any quantitative restrictions and state controls, and then slashing tariffs, the weapons that poor countries can afford to use are banned; meanwhile, only rich countries can afford to take advantage of the main area of protection allowed, that is, the various categories of state subsidies to producers. Under the AoA, only 25 WTO members can subsidise exports. This exclusive club is made up of those countries which had subsidised their exports prior to the agreement, which not surprisingly are those who could afford it, the US, Japan, the EU, Canada, and Australia. Theoretically, these subsidies must be progressively reduced.
Only those measures with “serious trade distorting effects” — those in the “amber box” in WTO language — are banned by the WTO. Measures with “minimal trade distorting effects” — those in the “green and blue boxes” — are free from WTO control. However, the dividing line between these “boxes” is simply fudged by the economically powerful countries. Even if some poor countries did give some minor subsidies, and these were not challenged by the rich countries in WTO courts, such small subsidies would have little chance of competing with the massive subsidies afforded by the rich.
Forcing governments to first convert all import quantitative and licensing restrictions to tariffs, even when allowing them some time to reduce tariff levels, emphasises this bias; the false prices of many subsidised US and EU goods are so low that even high poor country tariffs can be overridden; quantitative restrictions would be more effective.
The US Farm Bill (2001) provides $190 billion in subsidies to US farmers over ten years. Two-thirds of subsidies go to just 3 per cent of US farmers. Ninety per cent of farm subsidies have gone to just five crops — corn, wheat, cotton, rice and soybeans — while 60 per cent of US farmers, who produce most of the vegetables, nuts, poultry and cattle, are not even eligible for such welfare.[55]
In the EU, subsidies account for 126-129 per cent of cereal and bovine farmers’ net income, but the 40 per cent of farms considered to be ‘small farms’ receive only 8 per cent of the subsidies. This ‘Common Agricultural Policy’ eats up nearly half this year’s annual EU budget of 95 billion Euros.[56] The recent French-German agreement on agriculture (October 2002) allows EU subsidies to continue until 2013. This and the US Farm Bill both make clear that the world which poor countries are entering is not one characterised by some abstract ideal of free trade, but one massively distorted in favour of the rich countries.
Despite corn self-sufficiency, millions of Filipino corn farmers are now exposed to US corn imports selling at half the real cost of production. According to the Belgian prime minister, Guy Verhofstadt, “sugar produced in Europe costs twice as much as sugar produced in South Africa, but it is European sugar that is pushing out local sugar in that country. Imported European powdered milk has led to a one third drop in milk production in Jamaica over the past five years.”[57]
The Agreement on Agriculture (AoA) requires all WTO members to reduce protection from imports. Regarding tariffs, rich countries have been slow to bring them down; in the Uruguay round, they engaged in “dirty tariffication”, meaning they distorted their “real tariffication” rates and thereby converted them to relatively high tariffs. By contrast, “the (Vietnamese) government will be under pressure not to follow the example of GATT contracting parties who indulged in ‘dirty’ tariffication.”[58]
The EU overstated its original protection levels by 61 per cent and the US by 44 per cent, which has resulted in their projected levels in 2000 actually being 63 per cent and 77 per cent higher than originally! Such subsidies were estimated to be more than US$190 billion a year in the handful of industrial countries in the late 1980s and US$27 billion in the entire developing world. The former figure has increased to US$350 billion a year.[59]
Regarding the import restrictions that are allowed under the Sanitary and Phytosanitary Agreement (SPSA) to protect human, animal and plant life and health, “a case would need to be made for each item so claimed. Members will scrutinise those cases carefully, and again are likely to apply stricter standards than currently apply to present WTO members.”[60] Thus it will be extremely difficult and costly for a developing country like Vietnam to invoke this clause, particularly against the US push for countries to open up to untested genetically engineered (GM) foods and seeds. According to the BTA, the Parties shall “ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient evidence.” This is open to interpretation, with decisions going to WTO litigation; the US does not regard international concerns about GM foods to be based on “scientific principles” or “sufficient evidence”.
In contrast, SPSA has emerged as a major protectionist weapon for rich countries. For example, the EU invokes these standards to ban import of milk not from cows which have been mechanically milked. Most developing country smallholders milk cows by hand.[61]
The final weapon of the rich are the WTO’s “anti-dumping laws”. Of course, poor countries can use them in theory as well, but as always, are in a far weaker position to win. Notably, the US launched 79 WTO-allowed “anti-dumping” investigations in 2001, more than any other WTO member.[62]
4.2 Gender
The fact that the World Bank’s CAS saw little difference in men’s and women’s social indicators and access to social services does reflect the fact that the position of Vietnamese women is relatively good compared to many other developing countries. This is largely a legacy of its socialist past with its strong ideological commitment to women’s equality.[63]
It is therefore assumed that women are in a relatively good position to withstand the more competitive environment of trade liberalisation, in the context of the view that falsely assumes free and fair market competition between men and women. In reality they start from different socio-economic and cultural positions,[64] and a degree of women’s inequality at many levels has lingered, despite the Government’s efforts. As noted in a critique of World Bank policies, “treating communities and households as single units can overestimate women’s well-being, since community and household distribution often favours men. It is important to disaggregate poverty effects by gender.”[65]
Further, this view also ignores the fact that women’s position has in certain respects declined since the onset of the Doi Moi economic liberalisation program in the late 1980’s. The market economy generates and sharpens problems of male-female and gender inequality, further widening the gap between the rich and the poor, between men and women.[66]
Under doi moi, constraints to women’s production and reproduction capacity have been caused by many socio-economic and cultural factors, resulting in the (a) change in access to resources and employment opportunities, (b) change in access to public services and (c) change in women’s position in the occupation structure.[67]
The initial erosion of women’s social position coincides with the shift from a state-cooperative sponsored to a household-based productive and reproductive strategy under the household contract system.[68] Women were the main bearers of burdens that the shift of the policy transfers onto their families, entrenched with the collapse of the cooperatives from 1989. Their work became more intense and invisible and old patterns of patriarchal control over women’s labour re-emerged. Female labour in agriculture rose from 75.6 percent of all female labour in 1989 to 79.9 percent in 1992, while the male equivalent changed little.[69] Such intensification is also due to the growing rate of male migration to find paid city employment.
Some of the clearest post-Doi Moi differences include[70]:
§ Average female-operated farms cultivate only half the land area of male-operated farms, and farm profits are only 62 percent.
§ Female-operated non-farm rural enterprises are on average much smaller, about one-eighth as likely to employ wage workers than male businesses
§ Women’s waged employment increased by 4 percent between 1993 and 1998, but the increase was 9 percent for men
§ The average hourly wage for women is 78 percent that of men, with the biggest differences among those with lowest educational levels (this however should be seen in the context that in most developed countries, the male/female wage gap is considerably wider)
§ The number of girls dropping out of lower secondary school is 6 percentage points more than boys, and 11 points more in upper secondary school
§ While there is no gender gap for people with no more than primary education among 22-34 year olds (ie those attending primary school in the 1970’s and 1980’s), this gap has widened markedly since the onset of Doi Moi
§ Child malnutrition rates are significantly higher among girls than boys
§ Only 65 percent of girls who are ill accessed health care professionals, when the mother had no education, but this jumps to 88 percent when she had 4 years of education (the father’s educational level has little impact on either female or male children)
§ The percentage of women giving birth without skilled medical professionals is about 12 percent overall, but around 30 percent for the poorest women, women with no education and ethnic minority women
§ Paid maternity leave for state sector workers was cut from 6 months to 4 months, and in rural areas most creches collapsed with the end of the cooperatives
§ Women’s representation in the National Assembly collapsed from 32 percent in 1975 to 17-18 percent over 1987-97, but increased again to 26-27 percent since then. Women’s representation at Province/District/Commune levels fell from 28/19/19 percent in the 1980’s to 12/12/13 percent in the early 1990’s, rising again to 20/18/14 percent in the late 1990’s[71]
Women’s largely unrecognised and unremunerated reproductive and domestic responsibilities, along with intensified informal household production, greatly limit their mobility. The perception that this is their primary function, due to the prevalence of traditionalist ideology in rural areas, reinforces structural barriers to women’s full participation in social, political and cultural life.[72]
These limitations strongly impede their ability to compete with men in the market, when every individual competes with every other on a non-level ‘level playing field’, unless they find labour substitutes for housework and child care. When they do, such substitutes involve other women and female children – perhaps taking them out of school early. This problem of women’s role in maintenance of the labour force is overlooked by macro-economic policy.[73]
As a result, with everything now on the market, women are denied access to land, resources, credit, and the ability to mobilise labour.[74] Women in rural areas face more significant barriers, including low levels of education and work skills, heavy domestic responsibilities, inferior legal status, and entrenched sex discrimination both formally and informally. Most policy formulation and enforcement have neglected the gender aspect, particularly in areas such as land allocation, land use rights, investment, loans, extension services and techno-transfer.[75] This both results from and intensifies the lesser representation of women in decision making process.[76]
That women’s position has weakened due to domestic economic liberalisation suggests that it is likely to weaken even further as the scale of this ‘free market’ competition is widened to the whole world rather than mainly the domestic market – the same factors will be at play on a far higher level. Moreover, the fact that we are entering this new period with women already in an inferior position means they are at a lower starting point, relative to men, compared to their position when Doi Moi began in the late 1980’s.
The gender-differentiated division of labour in agricultural activities also means that numerous opportunities for enhancing production capacity (eg small business development or switching to ‘higher value crops’) are limited for women.[77] Their farms are smaller, their businesses are smaller-scale and more bound to petty trading activities in local markets,[78] involving drastically long hours with no social benefits.
To rise to the level of registered ‘small and medium enterprises’ or large-scale cash cropping in the ‘farm economy’, and larger scale trade over a wider area, particularly for export, one needs more land, greater capital, specialised training, higher educational levels and greater mobility, all of which favour men.[79]
It is unlikely that even the petty business sector where women predominate will grow – the huge growth of this sector in the 1990’s was one-off, and it is now glutted. With global trade liberalisation, larger scale will be even more necessary to apply better technology, ensure required quality standards and export with significant volume, favouring more the bigger ‘medium’ than the smaller ‘small’enterprises. Such concentration may have the opposite effect to the huge expansion of the household sector of the early 1990s.
In fact, modernisation of agriculture through technological inputs, required to maximize their capacity in production, and compete to the agricultural imports in quality and price, will drastically affect employment opportunities for women farm workers. Women are far more likely to work as seasonal farm labourers, with unstable earnings, than are men.[80] Therefore, new cash cropping businesses replacing farmers’ traditional self sufficient employment generally does not make up for job losses or provide the levels of rural employment needed. Continued reallocation of resources away from informal agriculture in favor of international trading activity is likely to have a devastating impact on women.
Current training is not aimed at the needs of women. Extension services tend to reach men and are often used to introduce new technological developments, which are often not viable for poor farmers and particular for female headed households, who are disadvantaged regarding affordability of extensive inputs.[81] Agricultural extension officials in Tra Vinh have also expressed the fear that public administrative reform will mean fewer services at the grassroots level rather than more.[82]
Women’s farms thus will be at a disadvantage to compete on the export market, or on the domestic market without protection from cheap agricultural imports, as subsidies are cut under trade liberalisation, and capital, credit, land, labour, education and access to information and technology go more to certain groups of men. Therefore, poor and female farmers, especially in mountainous and remote areas less favourable for food production, permanently threatened by hunger, will face many more difficulties.[83]
This forces women to migrate to find employment where they compete with other women for low paid, exploitative positions in urban areas on a temporary, seasonal or permanent basis (see 8.1). The predominance of women in these export industries like garment, and the fact that men will be more affected by lay-offs in state heavy industry affected by loss of protection, has even been put forward as a net ‘gain’ for women from trade liberalisation.
However, women’s domestic role often means that only young unmarried women can migrate; if mothers migrate, their role needs to be filled by a girl child leaving school. The exploitative and unstable wages and conditions often do not allow women any real independence.
Further, such attempts to treat men and women as different social classes, ignoring the macro-economic framework driving both into poverty, is just as misplaced as the opposite view noted above that women do not need any special targeting. In fact, men often react to unemployment not by taking on women’s domestic chores, but by domestic violence, alcoholism, gambling etc, putting huge pressure on women.[84] This group of displaced men are the most likely to engage in high risk activities leading to the current rapid spread of HIV infection, which naturally their families as well.
The assertion that through import liberalisation will benefit women with low import prices for agricultural inputs or consumer goods, is dealt with below (see 5.9 and 8). In any case, they will not receive much benefit if the same import liberalisation also lowers the prices of their crops.
Finally, women use services more than men, so it is often therefore stated that they will benefit from ‘more efficient’ services which trade liberalisation and the entry of foreign investors into the service sector will allegedly bring (see Chapter 7). Such services may benefit middle and upper class women, but the poor will have less access as the cost of services goes to market.

Chapter 5: Review of major issues of trade liberalisation in agriculture
5.1 Food Security, export cash crops and diversification
The philosophy of “export-oriented growth” has been promoted as the route for developing countries to develop and escape from poverty. This is supposed to involve countries exploiting their “comparative advantage” by exporting what they can produce “efficiently” and cheaply and importing other things. This tends to stress reliance on developing cash crops for export, even at the expense of food crops and the local market, as food can then be bought locally or imported using the cash gained from exports.
While the rhetoric of “agricultural diversification” is often used, in practice this does not mean supplementing rice monocultures with more diverse food crops, but substituting cash-crop, including non-food, monocultures for both rice monocultures and traditional, more diverse agricultural practices of many farmers, especially ethnic minorities.
As the WB puts it, “restrictions on alternative uses of paddy land” should be removed, as they “inhibit diversification into higher valued crops.” Instead, “agricultural diversification should be allowed to proceed as farmers freely responded to changes in market prices and unbiased incentives … a better approach to food security is to allow openness in consumption, production, stock holding, and trade and investment regimes, thereby allowing full expression of comparative advantage to generate the economic wealth that can lead to true self-sufficiency.”[85]
This downplays the emphasis Vietnam has laid on staple food self-sufficiency. In the past the government has imposed restrictions on alternative uses for paddy land for this reason. Sometimes local governments are still unwilling to turn over paddy land to other uses if they believe it will threaten the food security. There may be times when the assessment is mistaken, but the intention is sound.
The implication that the government wants to grow nothing but rice is absurd. The ‘Garden-Pond-Pigsty’ (VAC) model of sustainable diverse agriculture has been pushed in Vietnam since the 1960’s. The ‘Five Year Plan for Socio-Economic Development at the VCP 8th National Congress in 1996 calls for “ensuring national food security for any contingency, increasing rapidly supplies of food (ie rice), vegetables and fruit … expanding areas under industrial crops and fruit trees, increasing rapidly the cattle and poultry stock, to develop marine and aquatic production.”[86]
Does such diversification necessitate abandoning a commitment to food security? For the government, the stipulation is “to promulgate concrete regulations allowing the change of land use purposes on the basis of respecting planning and ensuring food security.”[87]
In fact, most Vietnamese experts agree with the government on this. Doctor Luong Thi Minh Sam, Deputy Director of the Institute of Social Sciences in HCM City, claims that “Vietnamese farmers will be the most vulnerable people during the economic integration process. The small-scale production of Vietnam’s farms will have to compete with large-scale agricultural industries in the US, EU and Canada. However, if farming becomes unprofitable, Vietnamese farmers might quit the paddy fields to seek other jobs with better pay, thus endangering world food security.”[88]
Similarly, eminent Professor Nguyen Van Luat noted that “apart from being the country’s biggest rice granary, the (Mekong) delta also produces about 60 per cent of Viet Nam’s seafood. Farmers also grow other crops such as white sesame seeds, soybean, maize, sugarcane, cotton, fruit and raise livestock such as ducks. It is also the source of traditional medicinal herbs that are used to treat serious illnesses such as cancer, heart disease and asthma. Of course, rice is still the delta’s strong point and ensures food security and sustainable development.”[89]
The issue thus is that the World Bank and the trade liberalisation agenda oppose the government’s right to impose any restrictions in order to guarantee basic security in staple foods; the rhetoric about farmers “freely responding to market changes” and allowing “full expression of comparative advantage” clearly oppose the right of the state to in any way interfere with individual farmers blindly acting in response to “market forces”. In other words, if farmers can get a better price for coffee or shrimp, for example, they should respond to this “market incentive” and then they can buy food with the money they make. In any case, trade liberalisation makes this inevitable – with the need for ‘efficiency’ in production to earn fast export dollars to pay for rapidly expanding imports, concerns such as ‘food security’ merely get in the way of a good cash crop.
In reality, over-reliance on cash crops has been conclusively proven to be catastrophic for food security. The major problems include crashing world prices for virtually all export products (especially with bumper crops), fake ‘dumping’ challenges from rich countries, challenges to domestic-oriented crops from dumped imports from rich countries, and environmental degradation due to intensification and mono-cropping. The country thus will thus not be able to pay for hugely increased manufactured and agricultural imports expected under trade liberalisation, even if export cropping is intensified to truly unsustainable proportions. Crashing prices means small farmers giving over their fields to cash crops end up with neither food nor money to buy it with. The need for technology for post-harvest and for quality improvement demanded by rich country markets, as well as the ‘economies of scale’ requirements of most cash crops, further excludes or drives into debt and landlessness small operators, resulting in further land concentration.
5.2 Export crop price crashes

5.2A Coffee price crash
According to the MARD report on coffee, “trade liberalisation has created a “great shock” in the Central Highlands in economic, cultural and environmental terms. Foreign companies purchasing coffee from Viet Nam and then selling to international markets reap the greatest benefit, while poor farmers and other groups such as women and ethnic minorities reap the lowest.”[90]
As the report points out, the huge response of hundreds of thousands of peasants, both indigenous to the Central Highlands and the free immigrants from elsewhere, was a mass response to “market signals,” that is, the big rise in the world coffee price in the early 1990s. This great success of the “market” and of Vietnam’s new export cash crop was heralded by everyone from the World Bank to many of its critics.[91]
This great expansion of so-called ‘diversification’ into coffee monocrop was often at the expense of far more diverse traditional agricultural systems among the local ethnic minorities of the Central Highlands; moreover, it clearly benefited those with the resources to put into larger plantations, with many ethnic minority people cheated into selling their land for what they thought were good prices, ending up with no means of livelihood and having to work on the largely Kinh-owned plantations.
Inevitably, the world price crashed, due both to oversupply on the world market caused directly by this “export-oriented” globalisation in all the coffee producing countries, and the enormous monopoly of the international TNC coffee marketing cartel. For countless thousands of small farmers, who put all their land into coffee production, the result is hunger “for many months of the year” according to MARD, only slightly mitigated by patchy government welfare.
Not surprisingly, the report notes that “diversified households in favourable coffee-growing areas with sufficient capital and Government support have suffered serious losses but have passed through the crisis,” where “having sufficient capital” to be able to diversity, or having sufficient land to have maintained some diversity as insurance, in a word, being rich, is the key point.
By contrast, “small coffee monoculture households in less favourable coffee-growing areas have been disadvantaged and cannot return to their former self-sufficient production patterns; many are heavily indebted, and some do not even have enough food … In the past they were sufficient of rice, but they now lack rice or have to eat cassava. Local residents have had to grow cassava since 2000”.
While rich households actively destroy their coffee trees, middle-off and poor households “struggle in hopeless conditions and passively abandon their coffee crops.” Unlike the rich households, they do not even have the money to destroy their coffee crops to plant food. It goes without saying that when the “world market” price is below the cost of production, farmers cannot buy food, from the local or the world market, and the essence of trade liberalisation ideology collapses like a house of sand.
Does not the disaster call into question the view that the government should not in any circumstances set aside land for food security or in other ways tamper with “free market” uses of land?
The Lam Ha district committee in Lam Dong Province certainly thought so. District secretary Nguyen Quoc Trieu claims that “if the district had not planted the seeds of economic diversification earlier, it would now be harvesting despair like the rest of the highlands.” The district had set aside 35,000ha for coffee plantations, but also reserved 2,600ha for mulberries, 500ha for tea and a large area for rice and other subsidiary crops.
This meant every household in the district could diversify their crops and plant any combination of coffee, tea, mulberries and rice. “Lam Ha continues to persuade every household to set aside a stable area of land for the cultivation of coffee, tea and mulberries, so they are less affected when coffee prices fall,” said Van Thao, chairman of the district People’s Committee. Last year, the district harvested 18,543 tons of rice and 6,333 tons of corn, which ensured the locals had food security.[92]

5.2B Price crashes of other export crops
Reliance on earnings from cash crop exports are further undermined by the fact that virtually every crop has suffered recent price falls on the ‘world market’.
Pepper has seen annual growth of 25 per cent over last five years, exports rising from 7000 tons in 1996 to 71,000 in first 10 months of 2002. Vietnam is now the world’s largest exporter of black pepper, and the second largest producer after India. However, world pepper supply rose to 250,000-300,000 tons a year, while import demand is 180-200,000 tons, resulting in a sharp drop in world pepper prices from $3000 to $2000 a ton in 2002[93] and now down to $1235 per ton. In 2000, pepper earned $120 million from sale of 35,000 tons, while in 2001, exports of 53,000 tons earned only $89 million.
Cashews - Vietnam is the third largest cashew exporter in the world. Ninety percent of cashew produced is for export. However, “revenues are likely to fall 20 per cent to US$120 million while tonnage increases by a marginal 2.4 per cent,” MARD reports. “Plunging demand on world markets” meant that by September 2002, prices had crashed from $5,700 per tonne to $3,700, costing cashew exporters an estimated $30 million last year.[94]
Silk - In recent years, Vietnam has earmarked 25,000ha for mulberry zones, with direct state contracts with farmers and high levels of input subsidies creating thousands of jobs in rural and mountainous areas, in farming and craft villages. However, world silk prices fell 40 per cent in 2001-2, and have been falling since 1994, and Vietnamese productivity is 30-40 percent lower than Chinese varieties, leading to enterprises undercutting each other.[95] The jobs affected by these price crashes and potential import surge with trade liberalisation are above all women’s jobs.
Tea – Vietnam has 100,000 hectares of tea plants, producing 93,000 tons of tea, 0f which 80 percent is exported. Tea prices dropped from $1536 per ton in 1995 to $1100 in 2001.[96]
Shrimp - Fierce competition, reduced purchasing power due to the international recession and “increased supply from European countries have reduced world shrimp prices by between 20 and 30 per cent”[97]. While the country’s shrimp exports rose by 10.7 per cent in the first half of 2002, the value of these exports rose only 4.4 per cent. More than two thirds of shrimp farms in Tuy Phong district in Binh Thuan province have stopped operating, “due to a decline in shrimp prices and shortage of breeding shrimp.”[98]
Fruit - Litchi farmers Bac Giang are now selling their fruit for 4,000 dong per kilo – down from 20,000 in 1995. Average-quality longans now sell for between 800 and 1,300 dong per kg, three or four times lower than they were last year (see 5.7)
5.3 Import surges destroying local agriculture

5.3A Maize and Soybeans
Maize and soybeans are two crops which can be seen as both food crops and cash crops and which have experienced considerable growth in recent years. The animal feed industry is particularly dependent on maize and soybeans, so developing such crops can be seen as having strong economic linkages, to this industry and to the livestock industry itself, while also providing back-up food security if their prices collapse or if rice is short.
At this stage, Vietnam’s animal feed industry still imports 60 per cent of its raw materials, mostly maize and soybeans. Vietnam grows 120,000 tons of soybeans, but needs 800,000 tons annually. The cattle-feed industry currently imports between 300,000 and 600,000 tons of maize per annum. Average freight costs are $200 a tonne.
MARD has decided to enlarge the country’s area of maize to 1.2 million ha by 2005, from the current level of about 700,000ha, half of which is in the northern mountains region, alongside the Red River Delta, the north central coast and the southeast. It is hoped the plan will double the annual maize harvest to between 4 million and 4.8 million tons by 2005. The plan also includes 7,400ha of maize nurseries, producing hybrid seeds for 85 per cent of all maize-growing areas.[99] In some regions, expanding maize crops have had a pronounced poverty-reducing effect.[100]
The question is, what happens to these thousands of small farmers under trade liberalisation? According to noted Professor Vo Tong Xuan from An Giang University, they will be wiped out. “When US maize and soybean arrive in Viet Nam under the Bilateral Trade Agreement, locals will no longer sell their commodities at such high prices because they will be too high in comparison with US prices.[101]
He pointed out that “the US is the world’s biggest soybean exporter, commanding 54 per cent of the international market in 2000. Its soybean output has increased from 55 million tons per year since 1995, to 70 million tons per year in 2001, according to the US Department of Agriculture. The increase in volume has driven down its price.” Moreover, due to massive US export subsidies, “US soybean exports cost VND3,060 per kg compared to Vietnam’s VND6,000-7,000 per kilogram.”
The US is also the world’s largest maize exporter, the 2000-01 crop making up about 41 per cent of the total world output. US maize costs “VND1,450 per kg compared with Vietnamese maize at VND1,800 per kg.” He also noted that “US Government subsidies mean that American agricultural products such as meat, eggs, and dairy products are also cheaper than local items.”
Under the BTA, import tariffs on soybeans would drop from 10 to 5 per cent. While tariffs on maize would remain at 10 per cent for the first three years, even this will not nearly cover for the price difference due to US subsidies. No other means of protection are allowed, with all qualitative restrictions and import and distribution licensing restrictions also to be scrapped within 3-5 years. This not only means the subsidised imports would be cheaper, but that US TNC’s could set up their own import and distribution networks for their products in Vietnam, with no restriction on the amount imported.
5.3B Cotton
A similar disaster, due to the “world market price’, threatens Vietnam’s cotton farmers. MARD has drawn up a plan to develop the nation’s cotton industry, to enable the domestic cotton industry to meet about 70 per cent of domestic textile and garment enterprises’ raw cotton needs instead of just 12 per cent at present. Currently, the industry imports $100 million worth of materials each year, reducing its competitiveness. The plan’s annual target is 180,000 tons of raw cotton on an estimated 230,000ha by 2010, creating employment for 400,000 local farmers.[102] The country’s last cotton crop produced 32,530 tons of cotton seed, a 60 per cent increase over the previous crop’s levels.
The plan also involves the construction of 10 more cotton processing factories, each producing 20,000 tons of cotton a year, and another five to extract oil from cotton seeds, located in Vietnam’s four main cotton growing regions. The main regions are the Mekong Delta, the Central Highlands, the north and south central coast and the northern mountains.
While a “cash crop”, cotton is not being grown as an export crop. As it feeds into the domestic textile and garment industries, which sell on the domestic market and account for a very large share of exports, cotton growing can be considered a crop with strong linkages into national economic strategy. “Cotton growing has played an important role in poverty eradication in remote areas, as the current cotton purchasing price is VND5,500 per kg.”[103]
However, this poverty reduction strategy has suddenly began unraveling as “world cotton prices have abruptly fallen to their lowest level in 26 years. Raw cotton is presently fetching about US$0.85-0.90 on the world market, compared to about $1.30-1.50 in June last year. On the domestic market, locally grown cotton is selling for about VND16,500 ($1.10) per kg, or VND3,000 more than imports.”[104] The Viet Nam Cotton Company (VNCC) warned that falling global prices will have drastic effects on domestic cotton farms and the entire garment industry, with cheap imports flooding the Vietnamese market, making it difficult for local growers to sell their cotton.
It is first of all important to note the cause of this magical “drop in the world market price.” In fact, the glut is due to the US subsidy program, which means many US cotton farmers “will receive half of their income from the government this year.” Although a relatively small share of the farm population – just 25,000 of America’s 2 million farmers actually raise cotton – their affluence and influence is legendary in Washington. The average net worth of a full-time American cotton-farming household, including land and non-farm assets, is about $800,000, according to the US department of Agriculture.”[105]
Last year, with $3.4 billion in subsidies, US cotton farmers aggravated the cotton glut by harvesting a record 9.74 billion pounds of cotton, “pushing prices far below the break-even point of most growers around the world.”
The garment sector “has already taken advantage of these low prices, importing 115,000 tons of raw cotton for just $113 million.” However, Nguyen Huu Binh, general director of VNCC and deputy general director of the Viet Nam Garment and Textile Corporation (Vinatex), said “the company has promised to protect cotton farmers from losses and will honour all of its contracts. The company had signed contracts with farmers in order to boost the area of stable cotton cultivation around the country.”[106]
These two statements from the same article seem contradictory. Most likely, VNCC, being a state company, has to fulfil its social obligations to the farmers, while the private garment companies, whose sole motivation is profit, naturally import cheaper cotton from overseas. Hence private enterprises can then be called “more efficient” and state enterprises can be called “a costly burden”, to dredge up classic neo-liberal speech.
Which then raises an important question about the role of state and private companies in poverty alleviation. If the ‘world market’ rules, many thousands of cotton farmers, and workers in processing plants, lose their livelihoods.
However, an article a month or so later seemed to indicate that the (also state) garment company had itself reneged on an agreement with the state cotton company: “The Viet Nam Textile and Garment Company (Vinatex), for instance, planned to buy 8,000 tons of cotton from the Viet Nam Cotton Company (VNCC). However, it changed its mind, citing cheaper import prices.”[107] This thus indicates the impact of the ‘world market’ on SOE social obligations, if left at that.
“VNCC officials said it has only sold 3,000 tons of its 8,000 tonne target, and now has a 7,000 tonne stockpile.” Present methods are only enough to preserve the cotton stockpile for three months. The company “has attempted to move the stockpile by reducing prices to VND15,150 per kg, creating huge losses for itself.”
VNCC is calling for more state intervention to help shift this stockpile, and “asked the Government to provide 30 per cent of its working capital to ensure it remains operational,” as well as establishing “a long-term bail-out fund for the cotton industry, a high-risk crop, to help it weather the price crisis.”[108] They have also urged the government to subsidise cotton farmers and, “under the development strategy, they want a closer control over investments, especially into SOEs, to avoid overlapping.”[109]
It should be emphasised that all these measures, eminently logical from the point of view both of helping the cotton farmers pull through this crisis and prevent them falling into poverty and debt, and of the long-term promotion of an industry with linkages throughout the economy, are all illegal from the point of view of full-scale trade and economic liberalisation. According to the September 13 Viet Nam News, the government is now fulfilling its social obligations and subsidising farmers’ selling prices to keep them at a floor price of VND15,500 per kg.”[110]
The U.S. is second in world cotton production only to China and the largestsubsidizer of cotton. After China and the U.S., India, Pakistan and Uzbekistanround out the list of top world cotton producers in 2002.
5.3C Other challenges
Sugar. The sugar industry underwent a huge expansion in the 1990’s when prices were high. While there are certainly many criticisms that can be made of the way this occurred (which there is no room for here), the problem now is the crash of world prices brought about by massive EU export subsidies. Prices crashed from 25 c to 15 c a kilo in 1997-99. Sensibly, Vietnam currently bans imports, as an import surge would destroy large numbers of livelihoods of workers and farmers, but this ban has to be lifted in several years in accordance with trade liberalisation schedules. The sugar industry directly employs 17,000 rural workers plus several thousand labourers involved in transporting sugar.[111]
Salt. In 2002, the price of salt dropped to below 150 Dong per kilo, from 350 Dong in previous years, due to a lack of regulations on imports, according to Viet Nam Salt Corporation (VSC) Director Nguyen Gia Hung. The Government maintained a floor price of 330 Dong.[112] Salt farming keeps 70,000 of Vietnam’s poorest people employed.
5.4 Fruit: Price crashes threaten export value and import surge
Fruit producers in Vietnam fall into three main categories – small scale farmers without trade registration who produce for nearby markets, large scale private fruit producers who transport their fruit across the country and to foreign markets, and state owned companies that concentrate on fruit and vegetable processing.
Total exports of Vietnamese fruits was $300 million last year, up from $50 million in 1995. Important fruits include litchi, longan, pineapple, watermelons, oranges, mangos, dragon fruit and grapefruit. There are 335,000ha of orchards in the Mekong Delta, providing more than 4 million tons of fruit per year.
While some are gaining from growing fruit instead of or as well as staples, and while increasing fruit and vegetable growth certainly boosts the nutritional levels of Vietnamese, the pressures of globalisation, export orientation and large scale fruit monoculture gardens are causing a number of problems for this strategy.
Global prices are not stable, and prices for many fruits have been falling. On the other hand, the dropping of tariff barriers in early 2003 due to AFTA will confront Vietnamese fruit growers with a flood of lower priced fruit from neighbouring countries. According to Nguyen Ngoc Lieu, the deputy director of the Southern Fruit Trees Institute, Mekong fruit such as mangoes, grapefruit, dragon fruit, mangosteens, and longans will face stiff competition from the same fruit grown in regional countries. If fruit farming is not “modernised and streamlined”, Vietnamese fruit exports “will flop” when the country joins AFTA, according to experts from the Institute.
While much is made of the “quality” of fruit, Nguyen Van Ky, general secretary of the Vietnamese Fruit Farmers Association, claims that Vietnamese fruit is better than the same fruit grown in Thailand. However, to be successful, Vietnamese fruit needs to be free of bugs and scratches, tasty, clear of insecticide and fertiliser residues and cheaper than Thai fruit, Ky said. To be eligible for export, fruit must meet “stringent requirements on appearance, flavour, cost and stability of supply.”
The lower prices of imported fruit is due to their greater productivity. Vietnam’s average fruit productivity is 9 tons per hectare, compared to the world average of 30-35 tons. Mangoes and bananas, for example, sell for $300 and $100 per ton in Vietnam, compared with $65 and $50 a ton in Thailand. The other main problem is lack of good post-harvest storage technology – the post-harvest spoilage rate is about 30 per cent. As for processing, while there are 40 processing plants with a total capacity of 100,000 tons annually, their technology remains at low levels. The use of what are considered to be “unidentified and sub-standard fruit trees” is a further reason “for poor fruit harvests and low-quality produce that falls short of market demands, particularly overseas.”
To be both free of ‘bugs and scratches’ and free of insecticide residue can be a big ask for poor farmers with limited farm technology. The pressure to boost productivity and for fruit to “look good” to foreign consumers leads to the use of more ‘high-tech’ growing methods and intensification, and therefore the greater use of chemical fertilisers and pesticides, with serious consequences for human health and the environment. However, this leads to further barriers from richer countries who will not buy fruit that has been chemically damaged.
Yet to afford the investment capital to both shift to fruit trees and intensify production while having the technology to do with without large chemical inputs, and the knowledge regarding correct levels of inputs, with falling world prices, tends to restrict the winners in this business to a smaller circle. In order to try to stay afloat, smaller farmers may be tempted to use even more chemicals in the hope of boosting yields.
This suggests that fruit farming for export is unlikely to be a way out for many poor farmers, unless organised into cooperatives, through which they could pool resources, improve harvest and post-harvest technology, collectively bargain for better prices, maintain some areas for food security and avoid all competing against each other and driving down prices. The government should “reduce taxes on fruit cooperatives, or they will not be able to save capital to keep a firm foothold in this market-oriented economy’” according to Tran Minh Tan, Chairman of Tan Truong Cooperative in Binh Duong.[113]
The examples of longan and litchi are instructive. Both have had bumper crops, as individual farmers ‘intensify’ production due to ‘market signals’, and in both cases the prices have crashed. Litchi farmers of Luc Ngan district in Bac Giang, a major litchi centre, are now selling their fruit for 4,000 dong per kilo – down from 20,000 in 1995. They are becoming increasingly bogged down in debts, owing banks about 240 billion dong. About 30 per cent of the litchi crop is exported. Northern Vietnam’s litchi competes with the south’s longan and Thai-grown longan which enter Vietnam on the way to export in China.
There are 43,000ha of longan farms in the Mekong Delta provinces of Vinh Long, Dong Thap, Tien Giang and Can Tho. The highest price the farmers can fetch for their best-quality longan is 1,700 dong per kg, while average-quality longans sell for between 800 and 1,300 dong per kg, three or four times lower than they were last year. “Longan is the mainstay of our commune, and accounts for 80 per cent of our cultivated land,” said Ho Ngoc Phuoc, deputy chairman of An Binh Commune’s People’s Committee in Dong Thap. “The falling price of the fruit will push thousands of people into difficulty and about 25 billion dong worth of loans will become bad debts,” he said.
Despite the rhetoric about the ‘free market’, about poor individual farmers escaping poverty by entering the fruit business, and about them getting good prices due to free competition among private traders, all this ideology falls far short of reality. An element of state planning and cooperative development appear to be far better instruments.
Bumper harvests always cause crashing prices, but with every individual farmer competing with each other to produce the most for the current demand in the market, such overproduction is inevitable. Moreover, the smaller the farms and the smaller the processing units, the lower is the ability to improve technology, let alone safe technology, and the more likely they are to use widely available banned or bogus chemicals to improve their yield because they are cheap. “Poor infrastructure, and small-scale production lines and farms have been blamed for this stagnation, causing an unwillingness among owners to invest more capital or upgrade to more advanced technology.”
Preserving fresh litchi using traditional methods causes a loss of 20 to 30 per cent of the fruit, and while the Institute for Preservation Technology, Institute for Vegetable and Fruit Research and the University of Agriculture have developed a number of methods to better preserve fruit and vegetables, “the new technologies have not been yet applied as farmers have not been able to purchase the necessary equipment.”
For these reasons large orchard growers benefit more from converting to fruit, while small farmers attempting to “escape poverty” are just as likely to end up in debt, unable to invest in better technology or to afford to market’s violent price swings. However, they may be able to develop their own ‘economies of scale’ and buy better equipment if they form co-operatives. Luc Ngan’s Kim Bien Fruit Processing Co-operative is now the only drying facility to feature solar power, and has also entered the world–wide market, having established itself on-line. Working cooperatively would also help farmers better plan together so that competition between too many small players does not drive down prices as rapidly. They may also save farmers from relying on private traders driving a hard bargain.
The price of litchi at the height of the harvesting season is always one - third of the price at the start and end of the season. Nevertheless, this is when most poor farmers have to sell to traders, to repay debts and pay for other necessities. ‘Free competition’ among private traders might sound good for farmers, but in reality it does not mean such traders are silly enough to buy when they have to pay a higher price to farmers, so they of course buy at the height of the season. There are no State-run trading enterprises in Luc Ngan.
Price instability is also a feature of longan farming in the Mekong, as longan, like other Mekong fruit is “mainly exported to China by small traders in a haphazard way” and “who pick up the fruit at rock-bottom prices from the farmers.” In fact, this competition between so many traders carrying bumper crops means China can drive a hard bargain with them. The longan prices at the border gates in northern Viet Nam are not much higher than the price on the farms in the Mekong, between 1,700 and 2,200 dong per kg. So traders now are not even turning up to buy the fruit, which means the prices are falling even further while the longans are still on the trees. The falling price has led some farmers into planting other fruit trees – but their prices are falling too.
However, a new MARD trade centre for litchi is planned in Luc Ngan. The centre will distribute thousands of tons of litchi for growers and “is expected to help limit the downward pressure on prices caused by distribution through too many middlemen.” In addition, MARD “plans this year to stagger litchi planting with about 30 per cent planted early, 60 per cent at the usual time, and the remainder planted late” in an effort to protect farmers from violent price swings.[114]
5.5 Rich country protectionism – the case of aquaculture
Vietnam’s booming aquaculture industry is now seen as a key area for poor farmers to diversify into, especially in the Mekong Delta. Exports in the first eleven months of 2002 earned US$1.87 billion, an increase of 13%, making them the fifth biggest export earner.
Vietnam has long developed fish ponds as part of its pre-Doi Moi food strategy called VAC (Garden-Pond-Pigsty). However, the massive development of export aquaculture is a product of the expansion of global trade in the 1990’s. Output from aquaculture doubled between 1998 and 2001. Seafood farms covered over a million hectares in 2001, of which 446,000 hectares were for shrimp. A sustainable growth of seafood production may aid poverty reduction and nutritional levels, but the current massive growth, particularly if at the expense of food security, may pose even greater risks than coffee due to its environmental impact (see 5.8C)
Another aspect is that where local farmers may be able to make some cash from exports, they are already coming up against the many faces of rich country protectionism. The challenge to Vietnamese catfish exports launched by the Catfish Farmers of America is a clear case of how the rich can continue to pay lawyers to launch spurious court cases which cause huge losses to poor country farmers.
They first launched an unsuccessful SPS case against Vietnamese catfish; in reality, even the US embassy in Hanoi has substantiated the fact that growing conditions for catfish are hygienic. Catfish farmers follow traditional methods, believing that fish that grow healthy make better profits. They then disallowed Vietnamese farmers to use the term ‘catfish’ for exports to the US, forcing them to re-label it as Tra and Basa. Finally, they launched an anti-dumping suit, which is absurd – there are absolutely no government subsidies on fish, and the farmers, unlike US farmers, are too poor to sell below cost price to break into a market. They earn an average of 550-700,000 dong a month, or a million dong in the processing plants. The cost of production in Vietnam is 13-14,000 dong (80-90 cents) per kilo, and it sells in the US for $1.15-1.50 per kilo. In any case, Vietnamese catfish only accounts for less than 2 per cent of the US market.
In November the US Department of Commerce (DoC) made the decision that Vietnam is a non-market economy. This decision means that, although the DoC acknowledged that there are no subsidies to Vietnamese catfish production, and hence no real ‘dumping’ case, just the fact that Vietnam does not yet conform to a total ‘free market’ model means the actual price of the catfish may be low due to ‘distortions’ in the overall Vietnamese economy. This could lead to punitive tariffs of 190 per cent against Vietnam’s frozen fish imports.
Action Aid Vietnam led a research and protest campaign against this US protectionism, involving also Oxfam Hong Kong, the Vietnam Fishery Society, the Vietnam Farmers Federation and on-line news VASC Orient. The research team found that catfish farming was the traditional means of livelihood of large numbers of catfish farmers in An Giang and Vinh Long provinces, and even for those new to the industry, “they do not have land to farm and they do not have other skills to take up a new profession.” They estimated that the livelihoods of 400,000 farmers would be negatively impacted by the success of US dumping charges, and in addition, “thousands of others in the processing factories, trade and input services will be out of work as well.” Farmers who have taken out large loans to invest in catfish farming will “incur heavy debt, which they will be unable to pay back. Most farmers will go bankrupt.” The report also found that some families were already in heavy debt as a result of the decline in export volumes following the US directive to change the name of the catfish, and “due to the sharp fall in fish prices last year.”[115] The price of Vietnamese catfish has dropped from 13-14,000 Dong/kilo in 2002 to 9000 Dong now.
The seriousness of the situation is underlined by the 1997 success of a similar US anti-dumping suit against Chinese crawfish, after which “almost the entire sector collapsed and thousands of fish farmers suffered from the loss.”[116]
While catfish is a traditional occupation in the delta, it should be noted that after beginning export to the US, the quantity rose exponentially from 2000 tons in 1998 to 60,000 tons in 2001. If there have been large numbers of new entrants into the industry since 1998, and the US action succeeds, this does raise further question marks about the wisdom of unbridled export orientation. Is selling up farmland to enter the fish export industry something that should be encouraged under the banner of ‘escaping poverty’ by moving to ‘higher value’ occupations? US animal feed corporations like Cargill have been major pushers of this expansion, organising the credit for many of the fish cages in the Mekong, not surprisingly as intensive aquaculture relies on huge inputs of animal feed.[117] Yet it is other US companies launching the dumping suits. For the likes of Cargill it’s a no-risk strategy – if the US fish and shrimp farmers win, Cargill will be able to sell more to them instead of Vietnamese, but the ruined Vietnamese farmers will still owe their debts. Western actors are thus involved at both ends.
Exactly the same is now occurring with shrimp. In October, the ‘Shrimp Importation Financing Fairness Act’ was introduced into the US Congress, accusing Vietnam and six other developing countries (Thailand, China, Indonesia, India, Mexico and Ecuador) of dumping shrimp, and demanding these countries reduce their shrimp exports to the US to 3 million pounds per month, compared to the more than 20 million pounds exported by these countries to the US in the first six months of 2002.
Meanwhile, the EU has also used SPS legislation against shrimp imports from Vietnam, China, Thailand, Myanmar and Indonesia, having found chemical residue in some batches of shrimp. On the one hand, the Vietnam Association of Seafood exporters and Processors (VASEP) joined participants of a new global alliance of shrimp exporters, the Global Aquaculture Alliance, in claiming the EU’s ‘zero tolerance’ policy towards some kinds of antibiotics was unreasonable, because they are only harmful to humans in certain doses.[118] However, whether that is so or not, the EU’s policy must be placed in the context of the well-known problems of massive use of chemicals in the industry. Thus the expected short-term gains in export dollars resulting from intensification of shrimp production needs to be balanced with the fact that increasingly discerning rich country markets are simply not going to buy chemically affected food.
Therefore, a great deal of government control and regulation are needed. The Ministry of Fisheries has issued guidelines for state agencies to inspect all stages of production, processing and transportation to maintain standards and prevent the use of toxic chemicals. The Ministry is also setting up 15 marine protection areas along the coast in an effort to preserve bio-diversity.

5.6 Removing export quotas and licensing restrictions
5.6A Rice export quota
Ironically, while the stress on cash crops downplays staple crops, which earn less money, trade liberalisation advocates think it can help rice farmers as well. They argue that by removing the government’s quota on rice exports, and opening rice exports to private companies, more rice could be exported, and farmers could get better prices because world market prices were higher than domestic prices – in other words, if Vietnamese people want to buy rice, they would have to compete on the ‘free market’ with wealthier consumers abroad, and hence pay higher prices to the farmers. Farmers would also get better prices from competing private exporters than from the SOE export monopoly. Hence “farm incomes, including those of the poor, who are most dependent on rice production, would rise,”[119] as the “vast majority” of the poor are rice sellers rather than rice buyers.[120] Only “urban dwellers”, who were better off than rural dwellers, would pay higher prices.
The low incomes of rice-producing farmers is an issue that needs addressing –especially by those who disagree with the World Bank’s downplaying of food security. However, this approach of tying domestic prices to world market prices is flawed in all its assumptions.
Firstly, the majority of rural dwellers are net rice buyers, not net rice sellers.[121] The minority of net rice sellers include many of the rural rich, particularly large farmers in the Mekong. The rural net rice buyers - who grow rice but not enough, or grow other crops - comprise the great bulk of the rural poor (including women-operated farms, ethnic minorities and war disabled), while rural absolute rice buyers are virtually all poor, including the landless. The urban poor are also often former rural dwellers, living on slums on city outskirts and often engaging in high risk activity. The four poorest regions (Northern Mountains, Central Highlands, North and South Central Coast) are rice deficit regions, while the two rice surplus regions (the two Deltas) are the second and third wealthiest.[122] Rice accounts for 51 percent of total expenditure by the poor.[123]
The bulk of the rural poor would be negatively affected by having to pay very high rice prices, if they were determined only by world prices when they happen to be sky high, as in 1998-99 when the above advice was given.
Secondly, there is also a significant number of poor rice sellers, who only have a marginal surplus to sell. If rice prices are too low, these farmers will be threatened with landlessness, or forced to convert to some risky cash crop venture. But these farmers benefit little from high export prices. They usually have to sell straight after harvest, when prices are lowest, to pay debts and buy essentials, and they have no capacity for storage. Hence they have to sell to private traders who have transport and storage, who can drive a hard bargain and reap the rewards of higher export prices. Even net rice buyers often sell rice for needed cash after harvest, when prices are low. Both groups have to buy rice later, when prices are high. So for poor sellers and buyers, a stable rice price is most desirable.[124]
Thirdly, these price highs are temporary. In 1998, the high world price was caused by factors such as the collapse of the Indonesian economy.[125] This encouraged increased production and exports, leading to a rice glut and hence ‘world market’ prices crashed. So even if WB advice had brought benefits for a couple of years, farmers then suffered from the collapsing world rice prices in 2000-01. Large farmers would have gained the most in 1998-99, and would have been in the best position to cope in 2000-2001; any small gains possibly made by marginal rice sellers in 1998-99 would have been wiped out.
Hence pegging rice prices to world market prices is not the best strategy to help farmers, as it simply pegs rice producers and consumers to world market volatility.
The government had already expanded the rice quota and loosened licensing rules to allow some private exporters.[126] This was aimed at aiding rice sellers in the context of high world prices, while still able to use these tools to protect poor consumers; the call for the abolition of these tools outright removes this ability.
Yet the same opposition to non-market intervention advocated by the WB and the WTO prevents governments from protecting poor producers, as when the world price crashed in 2000-01. The government’s buy up of large quantities of buffer stock rice in 2001, to boost farm producers’ prices, and its ‘floor price’ of 1300 dong per kilo (assuring farmers a minimum profit of 20 percent over production costs), may also be considered export “distortions” or “subsidies”.
The government’s formal abolition of the rice quota and private sector export restrictions took place at this time of depressed prices, so these measures aimed to benefit rice sellers did not hurt poor consumers. In late 2001, rice prices began to rise again slightly. However, in October 2002, they were still 30 per cent lower than in 1997, which was considerably below those in 1998.[127]
The current price level appears reasonable for both net buyers and sellers, encouraging the latter to boost production. However, exports to October had decreased by 9.4 per cent in quantity over the same period last year.[128] This indicates that the absence of the rice quota is not yet causing difficulty for consumers – farmers are not exporting their higher production levels as the price is still affordable at home.
It is unlikely that rice prices will remain at this reasonable level. The market may be flooded again, as India “is forecast to keep reducing rice prices in remaining months of this year to secure more market shares from Thailand and Vietnam ... a tonne of Vietnam 25 per cent broken rice is traded at US$173 compared with US$138 offered by India.”[129] Hence ‘export at all cost’ strategies will continually depress prices.
Further, WTO ‘minimum access’ rules mean even countries self-sufficient in a product must be open to at least 5 percent imports of that product. In big cities, Thai rice is making inroads,[130] while US rice is now being advertised. This will further drive down rice prices.
WTO rules remove the Government’s right to re-use measures such as the rice quota should they become necessary in the future, if the price (unexpectedly) gets too high. Yet there are signs in both the CPRGS and the BTA that the government reserves this right.[131]
5.6B Rice export licensing restrictions
The next assumption is that more private sector exporters competing with STE’s would mean better prices for farmers. The government had expanded private sector export rights in 1998, and the first private rice exporting companies were set up in 1999. This may have brought about some price competition when the export price was high – though, as noted, it was unlikely to have benefited poor rice sellers. But once prices crashed, there was no leeway for exporters, state or private, to compete by offering better prices.
The government completely lifted export licensing restrictions in 2001, when world prices were low. This may have helped pump out some more exports, but at miserable prices. To date there is no evidence that the abolition of the quota or the entry of the private sector has benefited farmers. And the great bulk of exports are still carried out by STE’s, as few private firms have such capacity.[132]
In the neo-liberal world-view, there is nothing beyond the all powerful STE. Yet the real monopolies which control rice export prices are giant agribusiness TNC’s, five of whom control world trade in cereals. Neither state nor private domestic exporters can provide good prices to farmers if they cannot sustain their own operations, given the price the TNC cartel is prepared to pay.
STE ‘public monopolies’ exist to protect farmers and consumers from the volatility of the world market and TNC cartels. They often do not do this well, their operations could be reformed, and some competition from private enterprises may help.
But the WB-WTO view that state or private export enterprises should simply compete and if the STE goes under, so be it, means depriving governments across the world of a tool they have long used to achieve social goals such as food security, agricultural development and protection of producers and consumers from world market volatility.
For example, in 2001, state exporters were subsidising prices by paying the government’s ‘floor price’ of 1300 dong per kilo, 200 dong over the ‘market’ price, and barely breaking even when exporting. “Our member companies are hesitant to enter such contracts, but they are virtually forced to do so because they are state-owned enterprises whose function is to some extent politically-oriented,” according to Duong Thi Ngoc Tranh, Vinafood II director.[133] Private companies, which exist only for profit, cannot do this, let alone offer better prices. It would also have been more difficult for the SOE’s to do it if their profits had suffered too much while prices were high due to competition from private exporters.
Similarly, the government subsidised the interest on loans for all the rice STE’s to buy up large amounts of rice from farmers in 2001 to maintain farmgate prices. WTO rules may see this as a ‘subsidy’ to STE’s not available to private and foreign exporters. However, if STE’s are fully exposed to competition of TNC exporters and they go bankrupt, the government may have to instead subsidise large private exporters.[134] Should the state give the same subsidies to its own enterprises, which it uses to achieve social goals, as to private firms, which cannot be used in this way?
Putting aside TNC’s, domestic private monopolies have the potential to be worse than state ‘monopolies’; the ‘free competition leading to better farmgate prices’ view is in most cases a myth. In the Philippines, the withdrawal of the National Farm Authority (NFA) from procurement and pricing led to an alliance of large private rice trading companies known as the ‘Big 7’, which control all aspects of rice procurement and distribution as a cartel. Far from improving farm prices, they have fallen and farmers are in a much worse position.[135]
WTO rules mean that foreign TNC’s can also replace STE’s in domestic procurement for export and domestic sales. Since the Indian government stopped procuring rice, giant TNC’s such as Cargill and Nestle have procured wheat and rice from Indian public stocks at ridiculously low prices, selling it on the domestic market and for export. Yet the low prices they pay to producers are not passed on to local consumers. Producers had to sell at Rs 3000-3250 per tonne (the government’s earlier minimum price was Rs 5400), but poor Indians had to pay Rs 11,300; exporters got it for Rs 5650.[136] This is monopoly.
Does the depressed world rice price at least make rice cheaper for poor net food importing countries? According to NGO sources, trade liberalisation has increased food prices to poor consumers. Again this can be explained by TNC monopoly. Cargill and Continental “are buying wheat at $60-100 per tonne from India and selling it at $230-240 per tonne on the international market, making a neat $130-170 profit per tonne, while India is losing $100 million in exports.”[137]
Yet rich countries adopt the reverse policies when they have surplus grain and want to break into the market of a self-sufficient grain producer. Kenya, which was self-sufficient in the 1980s, is now importing 80% of its food. “In 1992, EU wheat was sold in Kenya at a price 39% cheaper than it was purchased from European farmers. In 1993, it was 50% cheaper. In 1995, Kenyan wheat prices collapsed through oversupply.”[138]
5.6C Coffee and rice export deregulation and price crashing
It is ironic that the emphasis on abolishing export quotas and licensing restrictions aims at pumping out higher levels of exports, when the massive coffee price crash was caused by such unregulated export levels. Coffee exports have been open to private sector for some time, and evidence suggests this may have worsened the crisis. According to Vietnam Coffee Association president Doan Trieu Nhan, ‘Small-scale exporters are easily affected by the pricing crisis and they are willing to sell their products at cheap prices to liberate their stockpiles, regardless of the resulting negative impact on the whole coffee export industry.”[139] And QR’s on coffee exports are now seen as necessary by everyone, even if they don’t use that term. Having most exports go through SOE’s is the easiest way to achieve this.
The same may be true of rice. In fact, the export quota was only introduced in 1994, and the drastic reduction of the number of SOE’s allowed to export only occurred in 1992, in response to the massive price collapse brought on by the rice glut Vietnam’s new exports brought to the world market in 1992.[140] This export glut was brought about by the sheer number of enterprises (provincial SOE’s in this case) exporting uncontrollably (no doubt ‘providing price competition’). The price collapse impacted on small producers, while the previous export expansion was far in advance of the expansion of local consumption, at a time when malnutrition was increasing in the early 1990’s.[141] The vast superiority of the 1993-98 period in poverty reduction over the disastrous early 1990’s is well-established fact.
5.6D Better ways of helping marginal rice farmers
Stressing the unlikely benefits of export deregulation on poor net rice sellers ironically ties them to a strategy of rice monoculture, supposedly something trade liberalisers aim to avoid by advocating abandoning rice in favour of “diversifying” into cash crop monocultures elsewhere. In reality, poor farmers see rice as a means to live,[142] and see concurrent diversification into livestock or other food crops, or paid work, such as handicrafts, as more likely to raise cash. Such areas are also likely to benefit women (see 5.8C). Indeed, even in the rice surplus Red River Delta region, work in the booming handicrafts sector has been more responsible for escaping poverty than rice sales.[143]
To claim that the rice quota and SOE control of exports disadvantages small rice sellers ignores the fact that domestic rice prices continually rose between 1993 and 1998, by 20-30 percent throughout the period.[144] In fact, apart from seafood prices, rice rose more than any other major consumer product, many of which fell.[145] While this was partly due to the government relaxing the quota, the quota still applied and did keep prices 14-22 percent below export prices.[146] The rises thus reflected the growing domestic market, and this balanced increase had a beneficial effect on rural dwellers judging by the massive decrease in rural poverty during the period (though not on ethnic minorities). The fact that the poor in the Mekong Delta, the main rice surplus region, and the region with by far the biggest growth in rice production, showed the lowest national drop in poverty and the highest shift back to poverty[147] indicates that rising domestic prices barely reached them. Export prices thus would have been lees likely to.
The problem is land – this region has the greatest degree of land concentration and landlessness in the country, and has been exposed to market liberalism more thoroughly than any other region. With little land, they can neither diversify into other crops and livestock, nor have much rice to sell, nor have any bargaining power with private traders. There is simply nothing in recent MARD, Oxfam or ActionAid rice reports to show the poor have in any way benefited from export liberalisation. In ActionAid’s report, the poor consistently did not list an increase in prices as something likely to benefit them “because they never had any rice to sell.”[148]
Vietnamese experts tend not to stress ‘trade liberalisation’ solutions, but integrated pest management, efficient rice-drying methods, rice-sowing machinery,[149] and improving post-harvest facilities, which currently affect quality and result in huge losses[150] - according to MARD, post-harvest grain losses account for 16 per cent of total annual output.
Another aspect would be the encouragement of new cooperatives, so that farmers can negotiate better prices with private traders or even take over their functions. Pre-CPRGS consultation with the poor in both Tra Vinh and Vinh Long revealed the poor want more direct links to exporters, rather than through middlemen “who have too much power to set prices and costs”; some even wanted the state to directly buy their produce. Cutting out the private traders and millers would directly raise their prices. Through cooperatives, farmers could also pool resources for new technology (eg rice storage facilities so that they do not have to sell to traders immediately after harvest) or to invest in cash cropping while setting aside rice land for food security (see 6.2).
5.7 Removing import quotas and licensing restrictions - fertiliser
The Bank similarly demanded the removal of all quantitative restrictions on the import of fertilizers, seeds and sugar, and opening international marketing of these products to private businesses, as the current situation “results in higher costs for farmers.” Sugar is touched on above with other crops affected by import surges (5.3C), while seeds are dealt with as a biodiversity issue (5.8A). Here we will concentrate on fertiliser.
It is legitimate to ask how the cost of farm inputs can be reduced. The other issue is protection for the state fertiliser firms and workers’ jobs. The assumption is that since fertiliser is so essential to vast numbers of poor farmers, their interests should be put before the interests of the SOE’s and relatively smaller numbers of workers, if import fertiliser prices are cheaper than locally produced goods. In fact, the Government had already expanded the quota and loosened private sector import restrictions to help farmers. ActionAid claims the price difference was only 5 percent, and the Government often removes this difference when times are tough.[151]
However, the issue of completely removing all quota and licensing restrictions means removing a weapon the Government may need to use to prevent the collapse of the local fertiliser industry. The maintenance of a local state fertiliser industry is in the longer-term interests of farmers because world prices are not always lower. Relying on the ‘world market’ to reduce costs for producers only attaches their fate to world market volatility.
World fertiliser prices continually rose in the 1990’s, reaching record highs, but when the Bank advocated these measures, prices happened to be lower than those of locally produced fertiliser. They fell in 1998-99 when oil prices were low and China stopped importing, leaving a huge surplus on the world market. Yet within a couple of years, ‘world market’ prices were already rising (in 2000, farm-gate prices of imported urea fertilizers increased by 10-30 percent).[152] Prices are tipped to rise sharply now that China has entered the WTO, is importing massively, and loss of protection may close some of its fertiliser plants.[153] It is precisely the existence of a local fertiliser industry in China (and hence in other countries such as Vietnam) that keeps world prices low. By contrast, in Malawi, which relies completely on imports, fertiliser prices rose by sixteen times when fertiliser import and distribution was liberalised in the 1990’s.[154] In 2003, world fertiliser prices have shot up due to high oil prices with the war threat, with urea rising from $120 to $156 per ton in a matter of weeks.[155]
If in the interests of lower prices for farmers, Vietnam had abolished import quotas and licensing restrictions in 1998, and the flood of cheap imports had bankrupted fertiliser SOE’s, the new “private” importers would have been the few giant TNC’s who control world trade and production in fertilisers and every other aspect of the food chain. Then as the world price, controlled by these TNC’s, is now rising again, farmers would be paying higher prices, while thousands of Vietnamese workers with secure state jobs would be unemployed, and the state would have lost tax revenues and the ability to control price volatility.
The government finally abolished all quotas and licensing restrictions in 2001, when, however, the world price was rising. Before the current price hike, prices dropped again in 2002, resulting in a flood of dumped imports. But this did not help farmers.
According to the National Farmers Association (NFA), although fertiliser was plentiful (both domestic and imported) farmers were facing a fertiliser shortage and paying high prices while fertiliser firms were having difficulty selling their products. Pham Quang Ton from the NFA explained that “the State controls the production of fertiliser, but fertilisers are supplied to farmers by private traders. These traders only aim to make a profit, so even though fertilisers are in stock, farmers still have to buy at a high price.”[156] One way of dealing with this, the same problem with the control of rice distribution from farmer to exporter by private trader, would be to encourage farmer cooperatives to distribute rice for export and fertiliser inputs.[157]
As fertiliser firms were thus working under capacity, it is difficult for them to produce cheaply or invest in better technology to produce more cheaply in the future to compete with imports. The Vietnam Fertiliser Association (VFA) called on the government to drop VAT on locally-produced fertiliser while maintaining it on imported fertiliser.[158]
Encouraging cooperatives and scrapping VAT would be in the interests of both farmers and domestic producers. But encouraging cooperatives is seen by the Bank as “favouring” one form of enterprise over another; and VAT is always pushed in IMF advice, though it taxes rich and poor equally. Scrapping VAT on domestic fertiliser but maintaining it on imports would go against liberalisation rules that local enterprises get no preferential treatment.
The BTA indicates that the government still aims to prevent TNC’s becoming the dominant local distributors – control of domestic distribution of fertiliser imports via licensing restrictions remains in the ‘unbound’ category. To protect farmers, the government or SOE’s also provide wide-ranging fertiliser subsidies to poor farmers – which may be considered “distortions” under the WTO regime.[159]
5.8 Export intensification, environmental degradation and erosion of traditional practices
Trade liberalisation inevitably means intensification of agricultural production, because more and more export dollars are required to pay for more expensive imports. This is having a significant impact on the environment - while large farmers and large traders make most of the gains, poor farmers and labourers have to pick up the pieces when unsustainable levels of production destroy the environment in which they can no longer return to food production. It is also threatening the country’s rich diversity of biological resources on which the poor depend for 90 percent of their needs.

5.8A Seeds, TRIPS and Women’s Knowledge
The World Bank proposes to “open the seed industry to imports and domestic private sector production” in particular, of genetically engineered varieties, as this will make “seeds cheaper and more plentiful, and important new varieties available”. This needs to be looked at in conjunction with the TRIPS agreement discussed above.
Vietnam imports hybrid rice seeds from China, but they are state-from state imports, and Vietnam is actively involved in production and research itself.[160]
According to ActionAid, “the current patent system is giving agrochemical corporations unprecedented legal control over the food chain. The number of patents on the five crops that account for 70 per cent of the world’s food supply is rising steadily by the month.”[161]
Six corporations Aventis, Dow, Du Pont (which includes Pioneer), Mitsui, Monsanto (which includes Cargill) and Syngenta (formerly Novartis and AstraZeneca) - have cornered global seed markets. They control 98 per cent of the global market for patented GM crops, 70 per cent of the global pesticide market and 30 per cent of the global seed market, including 633 patents, or nearly 69 per cent, of the total of 918 patents on rice, maize, wheat, soybean and sorghum, the staples that are vital for the poor.
Nearly all companies conducting research and development of hybrid rice in Asia, except in China and Vietnam, are owned by or linked to the world’s largest seed companies.[162]
Such monopolisation makes clear that the “private sector” the Bank refers to does not mean some imaginary domestic SME’s who just happen to have the enormous resources necessary to engage in such high level research, but rather these “private” TNC’s.
In the past, TNC’s were not interested in seeds, because farmers traditionally save seeds from the previous crop, making profiting difficult. Now, “with the advent of adequate intellectual property protection, private sector investment in rice has dramatically increased, particularly in the seed industry.” The ADB is financing a “Development and Use of Hybrid Rice Outside China” project targeting Asian countries. It includes IRRI, FAO and Asia Pacific Seeds Association (APSA), grouping the major private seed companies operating in Asia. APSA’s role is to promote large scale private sector production of hybrid rice, gaining access to IRRI’s parental strains.[163] Therefore, private monopolies will have access to publicly owned rice strains, collected by IRRI from small farmers over the decades, and then these companies will have ‘intellectual property rights’ over these ‘altered’ strains which they sell back to these farmers!
This means that “farmers who grow patented crops may have to sign contracts and pay royalties to the patent holder, they may be denied their right to save, grow, exchange or re-sell seed” yet 1.4 billion people in the world depend on saved seed. Hybrid seeds already cost between 100 to 350 per cent more than traditional seeds, and are priced 15 times higher than openly pollinating varieties.[164]
Women are the traditional savers, breeders and exchangers of seeds. In a survey of rice varieties in the Mekong, Government officials and male farmers generally mentioned 8-10 varieties, but the women mentioned a hundred local varieties. “The ten high-yielding types were privy to production methods, whereas the others were not,”[165] illustrating the fact that women’s knowledge is rarely solicited in production plans. The rising power of seed corporations is a direct threat to an area where women have some control, and to an entire culture based on such seed development and exchange.
Is it worthwhile for women to exchange this power for varieties which are more ‘high-yielding’ and thus bring more cash to the family? In fact, hybrids are only high yielding when other conditions related to irrigation, chemical fertilisers and pesticides are met, hence higher yields are balanced with higher costs. Dr. Tran Van Dat noted that “Thai rice costs less to grow than ours because 70 per cent is intensively cultivated with traditional strains, which need less chemical fertilisers and irrigation.”[166] Also, the genetic base of hybrids is narrow, most derived from one Chinese maternal parent, narrowing the nutritional base of staple crops.[167]
Throughout the developing world, there is a large gap between rice yields in the laboratory and in the field. In Vietnam, yields are “two to three tons lower per hectare than in research centres. Output of irrigated rice could be increased from 6 to 8-9 tons, and of non-irrigated rice from 2 to 4 tons per hectare.”[168] FAO believes that, if this gap were closed (eg by stopping post-harvest losses), global rice output would rise 25 per cent – considerably more than the average yield gain involved in switching to hybrids.[169]
The advent of GMO’s in the hands of TNC’s completes their dominance, as these crops can cross-pollinate with local crops. Once this occurs, there may be no way for farmers to protect their traditional varieties or avoid becoming dependent and paying ‘intellectual property’ prices to the TNC’s. GMO’s have also been shown to cause strange new crop diseases,[170] which can spread from GM fields into non-GM fields via cross-pollination. GM is also very expensive, needing 13-15 years “to transfer each new variety created to farmers and costs about US$30 million, in addition to royalty for using the patents.”
5.8B High tech fixes versus traditional methods in agriculture
So are these hybrid and GM seeds, and other ‘Green Revolution’ products like chemical fertilisers and pesticides, good for poor farmers? The Bank believes there can be “further gains in yields through wider adoption of high-input hybrid rice, increased fertilizer use” and that the future lies with genetic engineering.[171]
On the other hand, the Bank has verbally endorsed Integrated Pest Management (IPM) but this is unlikely to be encouraged given that it carries out a “Staff Exchange Program” with major agro-chemical TNC’s, which have been involved in a range of harmful activities.”[172] Bank projects “still supply farmers with pesticides, introduce agricultural systems that lead farmers to become highly dependent on chemical inputs and/or fail to provide training in ecological alternatives. A review of World Bank agricultural projects between 1997 and 2000 reveals – with few exceptions – the historical bias towards intensifying production with greater use of pesticides predominates. Few project documents even mention IPM.”
The ‘cash crop for export’ model, relying on intensive mono-cropped non-native crops, is unsuited to ecological methods, often necessitating pesticides. Monocultures lead to greater attacks by pests, as does replacing traditional varieties by foreign hybrids, leading to increased pesticide use.[173] When food grain imports start flowing into Vietnam under trade liberalisation, the ‘necessity’ of increased chemical inputs to boost yields will be increased, given the huge difference in per hectare output between rich and poor countries.[174]
Thus farmers abandon their traditional and ecologically sound agricultural practices in favour of export monocropping. Women farmers are particularly disadvantaged due to the predominance of men in agricultural programs offering farming technologies, education and loans, meaning they tend to remain more focused on labour intensive methods centred on unpaid family labour. However, their labour often brings the household a great variety of domestic and wild plant and animal food and medicine products, of which women have a great deal of knowledge which is not utilised in development programs.[175] Ethnic minorities in particular rely on traditional mixed cultivation methods, and they have not gained by switching to cash-crop monocultures, as the coffee disaster in the Central Highlands indicates. Vietnam’s successful Garden-Fishpond-Pigsty (VAC) model of sustainable crop diversity is undermined.
There are many cases when controlled use of chemical pesticides, chemical fertilisers or non-native seeds helps boost yields, depending on the geographic conditions. However, TNC’s which dominate their international marketing have a vested interest, these inputs are expensive for the poor, tend to exclude women, and are environmentally ruinous. “If the situation continues, rice fields in Vietnam will soon lose their natural fertility.”[176] IRRI’s research confirms massive environmental degradation from green revolution technologies.[177]
Therefore, it is worth considering the literature on the benefits of modified traditional farming practices. At present, $800,000 per year is spent on research and development of integrated pest control techniques and bio-fertilisers. Of late there have been a great number of reports in the Vietnamese media about using organic fertilisers, integrated pest control techniques, traditional varieties and intercropping methods.[178] The government’s major agricultural research program combines “advanced technologies with traditional techniques.”[179] It has had the “startling” result of “the recovery of eight traditional rice varieties from the northern provinces.”[180]
In An Giang Province, a successful organic rice plantation has been trialed where chemicals are completely forbidden, farmers instead using “cattle manure, organic fertilisers and bio-pesticides.” The rice was “more fragrant and nutritious than rice grown using chemicals. It also fetched a price VND500 higher than non-organic rice.”[181] The state Long An Foodstuff Company has signed a contract to purchase all the organic rice grown on 80 hectares in Vinh Hung district.
Recognising that “the biological diversity of Vietnamese crops is threatened by modern commercial agriculture with its high-yielding varieties”, the Government has set up eight “gene management zones” in mountain and midland regions where it will “work with communities to develop new or increased markets for traditional varieties” with particular emphasis on traditional varieties of rice, taro, litchi-longan, rice bean, citrus and tea.[182]
By conducting its own research into modern techniques, Vietnam stands a better chance of being able to provide its farmers higher yields and avoiding a crushing dependence on TNC monopolies, while conducting research into traditional techniques may even prove more beneficial. However, even IPM training classes tend to be aimed at male farmers, while many traditional techniques embodied in women farmers’ knowledge are passed over as ‘backward’ ideas, and as noted above (5.9B) not utilised or developed.
Moreover, the whole area of traditional medicine, an area where rural women, particularly ethnic minorities, have highly sophisticated knowledge, deserves more attention and may be an area of further research. However, ‘globalisation’ strategies may not be the best way to either enhance women’s position, protect traditional medicine or alleviate poverty. On the contrary, such varieties grow in delicate native conditions – attempts to massively cultivate monocultures will destroy the very essence of such crops, particularly using chemical or ‘high-yielding’ methods. Above all, export orientation is likely to rapidly deplete local stocks, the poor losing a non-market health alternative and the country a valuable resource, while rich male middlemen make a killing.[183]
5.8C Environmental degradation and aquaculture
Shrimp production increased from 200 tons in 1976 to 100,000 tons in 2000 – and then to 158,000 tons just one year later.[184] Vietnam is now the world’s fifth largest shrimp producer.
In the national fisheries’ plan, these exports are forecast to earn US$2.5 billion each year. A dramatic increase in shrimp production, with anticipated yearly earnings of US$1.4 billion (up from the current $780 million), is the centrepiece of this strategy, which the ministry believes will create some two million new jobs.[185] To do this, Vietnam will double shrimp output to 300,000 tons annually. Since this is to be achieved by expanding cultivation to only 500,000 hectares[186] from its current 446,000, it implies a huge degree of intensification.
The World Bank has advocated such a strategy, claiming “Vietnam has significant potential for expansion of aquaculture, through both intensification of production in existing areas and bringing additional areas under production. It is estimated that only half of the area suitable for aquaculture is being used.”[187] Even the Bank cautioned, however, that solutions must be found for persistent disease and pollution problems, and that better definition of property rights to land and water areas was necessary. Yet such advice is contradictory for a number of reasons:
Firstly, it is precisely such “intensification” that creates far greater “disease and pollution problems.”
Secondly, the Bank, for ideological reasons, cannot combine its recognition of problems with any state regulation, stating “the responsibility for what aquatic species to grow, how to grow them, and where to sell them should rest squarely with the growers, and they should bear the risks.” While this may be an attempt to avoid ‘top-down’ state directives to farmers, given the extremely serious problems, this “let the market rule” view may lead to similar to that of coffee. Since “market information” would tell poor farmers that at the moment they can get a good price for shrimp, why not go in head first and “bear the risks”.
Thirdly, as a major export item, restrictions or regulations are unlikely considering the flood of cheap imports Vietnam is about to confront with AFTA, the BTA and Bank conditionality. As the Bank reports claim this flood of imports will be good because it will reduce prices for a number of consumer goods, the country will need steeply rising exports of whatever it has to pay for the imports. Covering the country with catastrophic intensive shrimp ponds would thus be an obvious “comparative advantage” in the short term.
Global consumption of prawns has skyrocketed by 300 per cent over the last ten years. “Shrimp farming has emerged as the cornerstone of a vast multinational industry worth an estimated US$9 billion annually. Inevitably, supply to meet this demand falls to the developing world to keep costs low in this highly competitive market,” notes the Environmental Justice Foundation.[188] How could a “globalised” Vietnam keep out of this?
The effects this expansion of production and export of seafood, particularly shrimp, will have on poverty among rural dwellers in Vietnam can be looked at from two angles:
On the one hand, the massive problems of disease, pollution, debt, landlessness, land degradation and threatened food security – including of fish! – that are inherent in this industry. Who really will gain from intensifying production and increasing exports?
On the other, to the extent that exports are successful and do bring benefits to a section of the poor, these exports increasingly come under threat from First World protectionism, as has already become clear with the US “anti-dumping” challenges to both catfish and shrimp imported from Vietnam.
The ‘Food First’ organisation explains the difference between extensive and intensive production of shrimp in a very useful backgrounder:
“Extensive systems, in countries including Vietnam, Bangladesh, the Philippines, and Indonesia, are carried out in low-lying natural enclosures close to the sea along estuaries and bays, often in seasonal lagoons. Tidal flows into and out of the enclosures provide the stock of juvenile shrimp, feed, and water exchange. Stocking densities are low and yields can range up to 500 kilos per hectare” (in Vietnam, average shrimp yields are 360 kilos).
“The semi-intensive systems in Latin America and China generally are located above the high tide line and characterized by larger capital investments; the construction of artificial ponds from 2 to 30 hectares in size; the use of commercial feeds; and the use of diesel pumps for water exchange. Yields range from 500 to 5,000 kilos per hectare.
“Intensive systems in Thailand, Taiwan, and some areas of Indonesia, are characterized by smaller individual ponds (0.1 to 1.5 hectares in size); high stocking densities; use of commercial feeds, pesticides to kill predators, antibiotics to prevent disease, non-organic fertilizer to boost nutrient supply; diesel pumps for water exchange; more frequent flushing of pond wastes; and aeration. Yields can be quite high - from 5,000 to 20,000 kilos per hectare - but intensive farms are also most prone to shrimp diseases and mortality, and generate a huge amount of pollutants that choke estuaries and other natural ecosystems when flushed out.” [189]
All this chemical effluent from the ponds is pumped back into the natural environment. The EJF notes that “within a few years, this ruthless and intensive exploitation of natural resources inevitably leads to a build-up of toxins and eventually environmental collapse, leaving behind a barren landscape and dispossessed communities.” This environmental destruction is further exacerbated by the fact that shrimp ponds demand fresh exchanges of water, leading to salinisation of soils and depletion of ground water.
Such “shrimp graveyards” are widely evidenced in neighbouring Thailand. “It has been estimated that over 20 per cent of shrimp farms in former mangroves in the Gulf of Thailand are abandoned after 2-4 years, And shrimp farming there is becoming ‘nomadic’, with farms moving further and further south as land is abandoned.”[190]
Far from enhancing good security, “previously sustainable small-scale local fisheries have been destroyed and croplands including fertile rice paddies flooded with salt water.” For “generations of coastal subsistence communities who have sustainably exploited coastal mangrove forests and the sea for food, building materials, traditional medicines and firewood … the destruction of mangrove forest to make way for shrimp ponds leads to a loss in the marine harvest.” It is estimated that some 38 per cent of all world losses of mangroves, which provide nursery and spawning grounds for many of the world's commercial fish species, may be due to shrimp farm development. “For every kilogram of shrimp farmed in mangrove areas in Thailand, an estimated 434g of fish and shrimp are lost from capture fisheries due to habitat conversion alone.”
Even worse, “shrimp are often fed on fishmeal, whereby more than four kilos of fish are used to produce just one kilo of shrimp. Farms are stocked with wild-caught larvae, and for every single pound of shrimp larvae caught, 20 pounds of by-catch (non-target species, for example fish, crustaceans and other marine life, including rare and endangered species such as turtles and seahorses) is discarded into the ocean, dead or dying.”[191]
How any of this can be seen as an efficient way of reducing poverty or guaranteeing food security is a mystery, but as with other boom and bust industries, many may gain in the short term, while for the poor, the temporary gains in cash will be comprehensively wiped out by the destruction in their wake, while those who make the biggest short-term gains will also be those able to walk away from this destruction with bucket-loads of cash to invest elsewhere. Not surprisingly, in an industry that requires large-scale chemical and other inputs, the rich or those able to get rich at the expense of others on the “free market” not only end up getting most land, but also often get it using ruthless means.
According again to the EJF, “there are innumerable cases of subsistence communities having their native land sold out from under them, creating a direct contest for resources and transforming an open-access shared resource into a single-owner, single-user plot, often jealously protected by armed guards.” Much as the WB may talk about “clarifying land use rights”, it is precisely their aim of creating a “real land market” that will allow such large “single-owners” to replace such “inefficient” ideas as “shared resources.”
Laws often mean little, as “the inequality between shrimp farm operators and local subsistence communities means that the latter often have no recourse to the law, whilst the former have little to fear from it … a catalogue of abuses including illegal land seizures, false imprisonment, summary expulsion, intimidation, rape, arson, violence and murder have all been inflicted on local communities at the alleged behest of shrimp farming operators, often with the complicity of corrupt local officials.”[192]
Finally, from a poverty point of view, “shrimp farming, outside of harvesting and packaging, is not labor-intensive. Neither is the industry known for providing high wages, except to the few aquaculture experts who set up and maintain production systems,” according to Food First.
The worst abuses and violence reported in other countries have not thus far been reported in Vietnam, though much research still needs to be done. Clearly, many farmers have made significant income gains in the initial stage. In parts of the poor central coast, such as Thua Thien-Hue, Quang Nam and Quang Binh, shrimp farming is being offered in a region where many crops are difficult to grow in the sandy soil. However, Vietnam has not yet got heavily into intensification of shrimp farming, and the ability to grab large land-holdings is still relatively restricted by Vietnam’s land laws. Such things will change with increasing trade liberalisation and land law liberalisation.
Many of the coming problems are already obvious. Many of the so-called ‘improved extensive’ farms started in the Mekong around 10 years ago are experiencing the familiar disease and pollution problems. Epidemics have already struck fiercely. Between January and March 2002, disease struck 63,000 hectares around Ca Mau.[193] Reports have now appeared that Mekong rice land is facing a “salt invasion”. In Bac Lieu and Ca Mau, “nearly 80 percent of farm land has extremely high salt levels due to shrimp breeders dumping salt water on fields.”[194]
Those who can afford it may upgrade to ‘semi-intensive’, but such farms have a life of only 5-10 years. Whoever cannot afford it risks losing their land. Each stage of upgrading involves land concentration and landlessness. Oxfam GB has shown that increasing landlessness in the Mekong is heavily associated with shrimp – in some shrimp growing areas, landlessness is twice as serious as elsewhere. 40 per cent of shrimp farms in Tra Vinh failed in 2001, and in some Mekong regions, 80 per cent of farmers are now losing money. Having taken out large loans to start up, failure means being crushed by massive debts with high interest rates and having no means to pay them back.[195]
Conflict has emerged in some places, such as around Tam Giang lagoon. Dike destruction for shrimp farming led to salinisation of agricultural land; and much land formerly common property, where poor locals accessed the free swimming fish, has now been enclosed. Similar problems have emerged in Khanh Hoa, with thousands of the locals’ lobster killed by the release of pollutants by nearby tiger shrimp farmers.[196]
Small shrimp farmers who had invested considerable money into farms in the Hai Phong region were moved out to make way for a US5 million foreign shrimp venture of American Technologies Inc. The project claims it will create 1000 jobs and boost Hai Phong’s shrimp exports to 2000 tons per year. However, local shrimp farmer, war veteran Nguyen Hung Van, claimed the compensation paid was “lower than the investment capital I spent.”[197]
Despite the hype about SME’s, this is an area that can only lead to such concentration, as attempts to promote quality and efficiency and intensify output are “hampered by the disorganised sprawl of hundreds of thousands of household producers … They must be taught proper feeding, pond-clearing and pollution prevention methods, yet the task is enormous.”[198]
Again, one strategy for small producers is to organise cooperatives while not abandoning food security. To reduce financial risk, “some local communities are pooling resources and developing ponds without abandoning their other crops.” In addition, voices are being heard against intensification. Nguyen Huu Dung, general secretary of VASEP, stressed that “the government should not push production too much, but conduct better planning and ensure sustainable development.” Rather than encourage farmers to stock their ponds more densely, Dung believes the Government should promote low density, low cost organic farming.[199] However, such sound ideas may be drowned out with the frenetic export cash needs of ‘globalisation’.
5.9 Gender and food security, cash crops and diversification

5.9A Women and cash crops
The coffee research carried out by ICARD (Information Centre for Agricultural and Rural Development)[200] gives information on the role of men and women in coffee growing in the Central Highlands.
It is clear that most coffee plantation work is done by men, though women help their husbands when needed, and widows or women with sick husbands have to do all the work themselves. While women and men are equal in important decision-making when dealing with family assets (the research was with ethnic minority women practicing ‘matriarchal’ traditions), “most important decisions requiring technical knowledge, such as cutting back coffee trees, diversifying crops or borrowing money, are the responsibility of men.” Men are also responsible for the application of fertilisers and pesticides.
While both men and women are involved in selling coffee, it gives little information regarding gender differences in the scale of such trade, except that men are responsible for loading and transporting the coffee. This, together with other research showing that men’s businesses are larger scale and take them further afield than do women’s,[201] suggest that it is mostly men taking up stronger economic roles in export trade, ie as large middlemen. In fact, male domination of this sphere has played a large role in breaking down ‘matriarchal’ traditions, based on strong collective, self-sufficient household economies.
Women are also responsible for harvesting vegetables and bamboo, mainly used for home consumption and small scale local trading. It is women whose task it is to keep food on the table, and are therefore more concerned than men with issues like rice growing and food security. Similarly, according to Oxfam’s rice report, “women’s responsibilities in feeding their families with rice and other foods is likely to remain equally important, or may become heavier with some of the effects of deregulation, growth, and labour migration. Labour migration of men (in the absence of local employment opportunities) may place more reproductive and also productive burdens on women.”[202]
While it is difficult to generalise about all cash crop production, strong evidence suggests that this pattern is common throughout the country – women are more closely tied to maintaining food security, through rice and other small scale crops (vegetables etc) or raising some pigs or chickens. Men tend to be more responsible for “diversifying” into cash crops like coffee or other crops, applying ‘high tech’ inputs to them and transporting and trading them over wider areas.
What this suggests is that while men may take decisions about entering such economically risky areas, the collapse of such schemes affects women more, because they still have to put rice on the table even when there is no money to buy it with as all land has been risked on temporarily ‘high value’ crops.
According to the Oxfam coffee report,[203] “women’s burden has increased; they have to worry about everything from shrimp sauce, salt and rice. Men, meanwhile, don’t care for such so-called trivial things. They (women) find life very difficult when they have no money for urgent situations. Children dropping out of school are also women’s great concern. Many poor women told us that had to stop children from schooling as they have no money ‘even no sandals for their school children.’ Girl children also suffer more here – ‘in case families lack money for sending children to school, girls must be the first to stay at home to help with the housework.’ Poor women also reveal that they have to take part in all kinds activities to earn more money, such as collecting bamboo sprouts, gleaning coffee (they used to glean coffee for 1 or 2 days after harvesting but now they go every time).”
Their relationships with their husbands is also a concern. “Financial problems worsen our relationships.” Notably, the women pointed out that they never attempt to dissuade their husbands from drinking – according to Oxfam, “there is always some alcohol in every house including the poor ones that have not enough rice.”
In group discussions and household interviews, ethnic women expressed their priorities to Oxfam. Apart from more “support from the state for children’s education”, the purely economic priorities reveal how little faith these women have in get-rich-quick cash crop schemes, calling instead for credit from Women’s Union or the Bank for the Poor “to develop small scale household economy such as raising fowls, pigs and growing vegetables and mushrooms” and for local authorities and organizations to help them improve their knowledge regarding issues like “different techniques of growing vegetables in rainy and dry seasons.”
Regarding large-scale diversification into seafood, “there appears to be a gender difference in the degree of risk that seems acceptable, women preferring lower risks and returns, and men, generally the decision makers, preferring high risk-high return activities.”[204] This was also clear from Oxfam’s pre-CPRGS poverty consultation in Tra Vinh.
A recent survey by the labour federation shows that women working in sea food processing plants are plagued by health problems.[205] In other countries, according to the Environmental Justice Foundation, women and children have suffered a great deal in shrimp farming, not only from working in an unsafe and unsanitary environments, having to walk miles to find drinking water following the depletion or pollution of local water supplies, but also from serious from landowners and thugs linked to shrimp companies.[206]
5.9B Women and rice export deregulation
As women are less involved than men in various cash-crop-for export ventures such as coffee and shrimp, and more involved with ensuring basic food security, does this then mean they are likely to benefit from trade liberalisation in the rice market?
In fact, women-operated farms are on average half the size of those operated by men,[207] and women make up a higher percentage of those losing land.[208] Therefore, in much of the country, they would be overwhelmingly represented in the category of net rice buyers, hence punished by high prices. In the Mekong, many may be in the category of marginal net rice sellers, punished by very low prices (hence more debt and landlessness), but also not really benefiting when prices are higher – having to sell rice after harvest when prices are lowest, and buy it later when prices are high. As those responsible for buying and selling rice for everyday household food or money needs, women are most in need of price stability, hence the volatility of trade liberalisation is damaging to women.
As with other poor rice farmers, their lot is thus unlikely to be improved by export deregulation during the odd years when the world price is high. Looking at what women themselves say, there is more an emphasis on earning income and improving nutrition through diversifying into small-scale household-based diversification, into animal husbandry for example, alongside rice.[209] The fact that women “contribute on average 71 percent of a household’s livestock maintenance resources”[210] indicates that directing resources into these areas would be more beneficial to women. Women are also heavily involved in local handicrafts production.

Chapter 6: Trade Liberalisation and Economic Structure
6.1 ‘Level Playing Field’
Trade liberalisation prescriptions through the WTO and World Bank insist on a “level playing-field” for “all economic enterprises, irrespective of type of ownership.”[211] In fact, “only enterprises able to earn profits should survive.” Governments should not give preference to SOE’s in any field.
Discrimination against non-state rural enterprises (eg in credit) makes it difficult to set up rural private enterprises. SOE’s may have monopolies or on input or output prices making the former higher and the latter lower than in a more ‘freely competitive’ environment.
Further, the emphasis in World Bank and neo-liberal policy is an ideological preference for the private sector, as it is allegedly more efficient than the state sector and is the main ‘engine of growth’. According to the Bank, the “labor/capital ratio of private enterprises is ten times greater than that of SOE’s” so they are able to create many more jobs,”[212] and “SOEs do not adopt cost-saving measures in transport, storage, marketing, and distribution as quickly as private enterprises do because they lack the desire for profit.”[213]
Many of the criticisms of the functioning of many SOE’s are widely shared, including lack of transparency, problems of corruption and collusion with local governments. There are SOE’s in areas where they are arguably not necessary. However, whether privatisation and allowing SOE’s to collapse is the best or only way to deal with these problems is another matter - corruption and lack of transparency afflict private companies at least as much, whether in Vietnam (Minh Phung-Epco) or elsewhere in the world (Enron, WorldCom).
Monopoly pricing often presents problems, yet prices of most inputs and outputs on the domestic market are market-determined, not SOE-monopolised. SOE’s have pricing “monopolies” mainly in basic infrastructure (water, electricity, telecommunications etc), where the State acts to keep prices lower than “market” prices in poor areas. If the market determined everything, such services would never enter poor areas. Regarding SOE domination in exports, see 5.8B, 5.8C.
Small and medium private businesses play critically important role, particularly in an array of areas that the state does not need to play a dominant role, particularly in the thousands of small-scale services traded throughout the country. The small domestic private sector is by far the biggest employer in Vietnam, employing ten times as many workers as the state sector, and 50 times as many as the foreign invested sector.
Policies to enhance this sector were given a big boost with the Enterprise Law of 2000, and many of the restrictions on credit and land-use rights have been removed. The private sector now accesses far more credit than it did even a few years ago.
However, from the point of view of poverty reduction, some points need to be made which challenge the total ideological bias in favour of private enterprise and against SOE’s.
Firstly, much of the high ‘labour/capital ratio’ is due to paying extremely low wages; according to the Bank, “income per worker in the private non-farm rural sector is roughly one-fifth that of the state non-farm rural sector.[214] This is particularly relevant regarding gender, as women are commonly paid less in the private sector. Do some SOEs make less profit (hence are “inefficient”) because they pay more poverty-alleviating wages?
Secondly, the Nghe An Company for Trade and Development Investment in Mountainous Areas, “as a State-owned profit-making business cannot compete well with private traders because of its bureaucracy and ‘inflexibility’ (e.g. every transaction must have ‘red invoices’, so it cannot ‘avoid’ taxes like the private traders here).”[215] Does “inflexibility” sometimes mean paying taxes to the state, which can be used for poverty alleviation? Is this SOE suffering from “unfair competition” from private enterprises? SOE tax avoidance is also a major problem, but this statement suggests private sector avoidance may be higher.
In fact SOE taxes account for 50 percent of all government revenues (up from 40 percent in 1999), joint ventures (between SOE’s and foreign investors) 6.3 percent, while the entire private sector, foreign and domestic (leaving aside 0.7 per cent from agricultural tax), pays only 10.3 percent,[216] down from 11.6 percent despite the boom in private sector growth since the Enterprise Law. The bulk of this comes from FIE’s. Yet the private sector accounts for 60 per cent of GDP.[217] Any collapses of SOE’s while the legal framework for taxing the private sector remains weak will put a huge hole in state revenues and cause widespread poverty. SOE contributions to the budget this year are projected to exceed 45 trillion dong ($3 billion).[218]
Third, while SOE’s often provide better technology to farmers, private operators often ‘compete’ by boosting quantity at the expense of quality. For example, the SOE coffee exporters provided farmers with technology to produce high quality coffee, which gained good prices for farmers on the world market, and these farmers received better farm-gate prices. Private coffee traders competed by buying and selling large amounts of low quality coffee, which helped glut the world market.[219] Similarly, regarding private tea-processing enterprises, “one of the problems they have caused State-owned enterprises is undercutting, by making the planters harvest five leaves from one bud instead of three, for bigger profits, tossing quality out the window in the bargain.”[220]
Fourth, there is not a single crop analysed in this report where poor farmers do not complain about exploitation by private traders buying their products – rice, fruit, prawns, salt etc – or selling them inputs like fertiliser (see relevant sections). The problem with the dogma of ‘free competition’ among private traders meaning better prices for farmers is that there are always far fewer traders than farmers (unless farmers organise into coops); medium-sized traders have transport and storage facilities, so can easily hoard inputs to force up prices, while poor farmers have no storage capacity so have to sell immediately, giving traders the bargaining advantage; and poor farmers usually have to sell immediately anyway to pay debts and expenses.
This occurs even if the State offers higher prices than the traders, because of the difficulty of reaching every household. “Most salt producers are poor so they want to sell their products as soon as possible even if the price is low, which means private traders make the profits. Last year, although the VNSC offered a good price of 1,000Dong/kg to producers, the company could not purchase enough for its domestic sales,” according to VNSC Director Nguyen Gia Hung.[221] Traders who buy cheap, however, hoard large quantities to make a killing when prices recover. One salt trader says she has made hundreds of millions of dong of profits from such deals.[222] “Their most fervent wish is that a State firm will purchase their salt at a fair and stable price, so that they no longer have to rely on the private traders who always pay too little.”[223]
Finally, a fertiliser SOE, the Nghe An Agricultural Material Company, “stabilised the provincial market by … subsidizing fertilizers in remote parts from profits gained in other trade.”[224] The company “keeps prices in mountainous areas equal to those in lowland districts (normally they are higher due to transport costs) by providing its own subsidies for bringing fertilizers there (in addition to the government subsidies).” Only an SOE could do this, because it is supposed to have ‘social obligations’ and is not run only for profit, like a private company. This company is a “monopoly,” controlling 80 percent of the provincial fertilizer market.[225] Similarly, the State Lam Son Sugar plant, which has a local ‘monopoly’, has invested massively in local infrastructure, schools and health care centres, while paying farmers good prices – as they are organised in cooperative groups and the whole industry has import protection.[226] Other examples have been given in this paper (State rice exporters, the State electricity company and so on). It would be worth examining how wide such networks of SOE protection of the poor through cross-subsidisation, special prices and subsidies and infrastructure development are. It would be in the interests of poverty alleviation for such SOE’s to receive “discriminatory” treatment in their favour.

6.1A Gender and ‘level playing fields’
While few would doubt the important role to be played by SME’s, the prevailing view that they are a panacea for development problems has serious flaws from a gender perspective.
Women account for 70 percent of the labour force in the informal sector, small household trading enterprises, characterised by “a high degree of fragmentation in the production process with limited possibility of skill enhancement, isolation of workers, lack of supportive services, irregular working hours and remuneration by piecework,” while control over labour and income is rooted in traditional patriarchal structures. While such household enterprises offer women many avenues for badly needed extra cash, it is difficult to go up the ladder - “men predominate in large-scale trading and business activities,” ie, SME’s, and they “will be in control of the more lucrative and less labour intensive trading activities,” due to greater mobility, and especially with more technological application.[227]
The ‘East Asian’ enterprise model reinforces “patriarchal structures through the sexual division of labour, female unpaid family labour, and male control over family income and skills definitions.” Gender inequality is further enforced by the “growing interlinkages between SME’s into a chain of subcontracting from large firms down to the household level.” Efforts to save on labour costs lead to “two different wage systems and contractual norms – the ‘core workers’, professionals with good working conditions in management positions in large firms, largely men; and the flexible workers, easily ‘restructurable’, occupying “the lower layers of production relations,” often at a contracted out SME level, many of whom are women.[228]
6.2 Cooperatives and ‘land markets’
The World Bank has exhibited clear preference for the development of large farms via a ‘real land market’ over cooperatives, as quoted above. This discussion is rooted in the problems of millions of individual farmers having tiny plots.
There is considerable literature showing that small farms are often far more efficient.[229] Yet due to Vietnam’s population density, many of its plots are too small – an average of 400 square metres per person in the Red River delta. Two ways to increase ‘economies of scale’ are for individuals to gain bigger plots, or for groups of small farmers to cooperate.
Trade liberalisation brings this issue to the forefront, because to successfully compete on a world scale clearly does require greater economies of scale.
Larger farms may help some individuals escape poverty, but clearly not everyone can gain more land. The 113,000 ‘large farms’ represent a miniscule percentage of the rural population (some 12 million households) but boast 10 percent of the entire agriculture sector’s earnings.[230]
They therefore require others losing some or all of their land. Landlessness is clearly associated with poverty. While some may get jobs on big farms, these jobs are nearly always low paying and unstable, offering work several months a year. Thus farm sizes can only gradually increase as the country industrialises and more jobs are available in industry; to create landlessness first would mean a dramatic rise in poverty.
In fact, the two regions where private land concentration is most pronounced – the Central Highlands and the Mekong Delta – are also home to the greatest number of landless people. Levels of poverty in these regions are far higher than their relatively high per capita GDP’s indicate.
Therefore, the government’s preference for encouraging the development of new voluntary cooperatives and informal cooperative groups seems sound. Cooperatives can be advantageous to poor farmers in the following ways:
§ They can negotiate better prices for outputs and lower costs for their inputs, hence avoiding private traders who dominate the transport, storage and milling between individual farmers and exporters, and between fertiliser companies and farmers, able to drive a hard bargain with poor farmers who have to sell immediately after harvest
§ They can jointly invest in machinery and post-harvest and storage technology, thus saving more of their crop and being in a better position to store rice to sell at different times of the year
§ They can develop the ‘economies of scale’ necessary to be able to both set aside rice land for security while pooling resources to cultivate some kinds of cash crops, rather than farmers on tiny plots having to choose between having rice but no money or throwing everything into a risky cash venture
§ They can act as focal points for contracts with exporters, and for introduction of training and technology, which is more difficult for large numbers of individual farmers.[231]
Speaking to the International Support Group of MARD, Brian Doolan, country director of CARE International, stressed that cooperatives were in fact “civil society organisations which have an important role as a mechanism for connecting farmers with markets, providing support and advice and for sharing knowledge and resources.”[232]

6.2A Gender, cooperatives and land markets
The importance of this issue to gender equality arises from the fact that the old cooperative system, whatever its faults, made women’s labour visible and public in most aspects. The initial erosion of women’s social position was brought on by the shift to a household-based production with household contract system and then the collapse of the cooperatives.[233] Women bore the burdens of the shift, as their household centred work – housework, reproductive duties and household-based agricultural production - became more intense and invisible and old patterns of patriarchal control over women’s labour re-emerged.
Land concentration for some means little land or landlessness for others. Women’s farms on average are half the size of men’s,[234] the quality of allocated land is often inferior[235] and they are far more likely to become landless. While the land law itself is officially very equitable, women are often allocated less land than men, and therefore have to work it more intensively, due to social and cultural prejudices.[236] When unable to produce enough to meet their subsistence and to pay tax, they end up transferring their land use rights and becoming waged workers on other farms at a far greater rate than men.[237]
The “red book” of land certification is registered under the name of the household head, which in practice is usually a man. While officially, the wife is entitled to half in a divorce in any case, in practice, the lack of her name has been shown to cause great difficulties and may be another cause of female landlessness. Thus the drive to ensure both names are on the ‘red book’ as called for by the CPRGS is an important reform.
However, even with such reforms, it is clear that it will not be women who benefit from growing land concentration and ‘big farms’. Double the number of women than men have under 2000 square metres of land, while three times as many men as women have over 18000 square metres.[238] Even the possibility that big farms will provide jobs for farm labourers, mostly female, is undermined as such farms employ higher technology to compete on the world market.
As cooperatives may be an avenue for groups of poor farmers to compete better, they objectively have advantages for women farmers. However, while the advantages of new cooperatives (voluntariness, democratic decision making) over the old are obvious, their disadvantages from a gender point of view include the fact that few of them are yet providing health, education or childcare services.[239] Also, as loose alliances of patriarchal households, specific incentives may be necessary to facilitate women taking on leadership roles, or setting up their own cooperatives. The whole area of women and new cooperatives is a relevant area of research.
6.3 Agricultural Planning
Another aspect of current government agricultural policy is a partial return to agricultural planning through encouraging the widespread use of contracts between farmers and processors and exporters.[240] This aims at avoiding anarchic situations such as in the sugar industry, where farmers would grow sugar and enterprises would set up processing plants without taking into account where the other was located, what the capacity (of providing cane or of processing) of the other party was and so on. This took place when the ‘world sugar price’ was high, so everyone expected returns regardless of difficulties, before the price crash in 1999. The collapse of world coffee prices, and the 2000-01 downturn in world rice prices, also had a disastrous effect on many growers.
The Government is now working on a program to involve the MARD, the State Bank of Viet Nam, the Viet Nam Farmers Association, the General Confederation of Labour and the Union of Viet Nam Science and Technology Associations. The latter would “conduct research then teach farmers about the latest agricultural technology to help them enhance the quality of products and productivity of their operations”, while farmers and enterprises would both be bound by their contracts, the enterprises thus guaranteeing farmers a reasonable price and a stable market, and the enterprises guaranteed a stable supply.
So far, mainly SOE’s have undertaken long term contracts, which binds them to pay farmers a certain price even if the ‘world price’ drops, “including the Lam Son Sugar Mill, the Song Hau Farm, Vinamilk and the Vietnam Cotton Corp … entered into contracts this year for 70,000ha of rice, 180,000ha of sugarcane, 10,000ha of pineapple and 30,000ha of cotton,”[241] while the Northern and Southern Food Corporations have contracted to purchase 800,000 tons of ‘high quality rice’.
Associated with this is the setting up of ‘material zones’ where certain regions would concentrate on certain crops suited to their geographic conditions; and a new emphasis on quality above quantity to earn higher value for exports rather than glutting the world market.
As the program is new, its results are not yet clear. On the one hand, a more planned approach and the tying of enterprises to contracts may bring about more price stability for farmers and help avoid disastrous livelihood collapses due to world price fluctuations. However, certain aspects will be important to monitor.
Firstly, will only a privileged few benefit with the poor left behind? Will women farmers be included? And given the difficulty of enterprises negotiating with individual farmers, will they sign contracts with cooperatives, or concentrate on ‘big farms’? In fact, most media reports are emphasising cooperatives, and MARD has suggested it wants 100 percent of agricultural produce to be grown and purchased under contracts by 2010.[242]
Further, a number of SOE’s (Vietnam Tobacco Corp, Sugar Cane Corp 1, Vietnam Cotton Corp, Vinamilk) have signed contracts to link material zones with poverty reduction in 18 poor villages in 10 provinces, including interest free loans for inputs. SOE’s may be capable of such work due to their ‘social obligations’ and the fact that the state may direct them in this way. However, farmers’ experiences with contract farming involving large private companies in other countries have often been very exploitative, companies offering take it or leave it abysmal prices once farmers have become dependent on their inputs (see India in Annex 1). This needs to be guarded against.
Secondly, as the program does appear to be extending to poor areas, will the welcome stress on quality merely translate into the ‘high-yielding’ varieties being pushed by seed TNC’s to the exclusion of traditional varieties and traditional knowledge and push up costs? And will this emphasise monocultures, or will material zones coexist among a diversity of local crops?

Chapter 7: Globalisation, Privatisation and Services
7.1 Services in general
Trade liberalisation and WTO rules require all service sectors, such as electricity, telephone, water, health education, banking and tourism, to be opened to private and foreign investment without restriction. As the aim of private firms is to make profit, naturally this goes hand in hand with an advocacy by the World Bank of “full or partial cost recovery” for most infrastructure. While it has withdrawn from active advocacy of fees and ‘cost recovery’ in health and education, it heavily pushed such policies for 20 years and Vietnam’s Doi Moi policies in these fields must be seen within that context.
As women use services more than men, it is assumed that they will benefit “from the entry of efficient and more affordable providers of transportation, communications, Internet and financial services.”[243]
This statement is highly problematic. ‘Efficient’ services provided by foreign corporations may indeed benefit middle and upper class women, but education, health, electricity and water will not be ‘more affordable’ for people than the cheap services provided by the Vietnamese government, whatever their quality. Rather, their prices being ‘market-driven’, they simply will not even attempt to compete with the State for poor customers who cannot pay high fees. The trend towards two-tier systems, begun with Doi Moi, will thus intensify.
The government sets very low water rates so that they are affordable; these rates are now under attack as “non-cost effective”. According to “experts”, the low cost means “investing in projects for water supply appears unattractive in terms of the amount of profits to be made.”[244] The likely effects of privatisation of water are best judged by the Bolivian experience when prices rose astronomically, leading to mass revolt (see Annex 1).
Similarly, regarding electricity, the Government signed an agreement in 1998 with the WB and ADB agreeing to their demands for electricity price increases from 4.8 cents per kw to 7 cents by 2001.[245] Thankfully, the government is behind schedule. In fact, this ‘globalisation’ demand contradicts the demand for cheaper services by enterprises to better compete in exports. So when prices were raised 13 percent last year, foreign invested industry was excluded.[246]
The aim of the rises is to make it more profitable for foreign investors in joint ventures with the State electricity company (EVN) or for private businesses involved in distribution, where the State sets a ceiling price. At present, it means that EVN can use this income “to invest heavily in our public service obligations – that is, power supply in rural areas.”[247] However, if TNC’s come in and set up 100 percent foreign power companies in competition with EVN, they will not have any such “public obligations.”
Telecom price reductions recently announced “apply to international phone calls, package circuit data switches, frame relays, international channel hire, indirect Internet access, mobile network connection and nationwide pager services”[248] – but not local calls! While such price drops are welcome, they have no connection to the poor, least of all poor women, whatsoever. Meanwhile, non-profit postal services have lost their cross-subsidisation by profitable telecom services, as they were separated so as not to tie down the profitability of the latter. New private competitors will service profitable urban areas, while the State Telecom company will be left to cover rural areas.
Any study of the access of the poor and women to health and education services since the introduction of private investment and user fees would show it has declined alarmingly. Fiscal decentralization potentially makes this worse, as health and education facilities at the grass roots level must raise more of their own funds given limited local funds. The use-rate of health services in the rural areas is low and this trend is likely to continue, while many families consider the opportunity cost of female education too high.[249]
At present, the Government is allowing foreign investment within State-controlled ‘monopolies’ in ownership of basic electricity, telephone and water infrastructure, and allowing private players to take part in the service end. The ‘donors’ have not demanded total privatisation at this stage, knowing Vietnam would resist. However, the demands of the BTA and WTO mean 100 percent foreign owned companies will be able to enter these sectors in several years. More ominously, their rules ban the State from “giving preference” to its own services over private or foreign players, even in health and education, using wording that can be interpreted as banning state funding altogether![250]
7.2 Credit
The Vietnam Bank of the Poor (VBP), part of the Vietnam Agriculture Bank (VBARD), and the Women’s Union (VWU) are active at lending to the poor. VBP and VWU provide loans without collateral requirements. By 1999, total state credit had been provided to 5.9 million households, about half the rural households in the country, of which 2.7 million were poor, mostly provided by VBP. Most is at the subsidised interest rate of 1 percent or less per month. Though a DFID study concluded that “VBARD does not seem to be excluding credit-worthy poor households (ie those with asset collateral)”,[251] consultations with the poor reveal problems of classification of poor households.
Women have considerably less access to credit than men.[252] Inadequacy in loan policy was identified by Binh and Lan[253] who showed that women, especially heads of households, were limited in terms of available labour and therefore their ability to create value, and so are unable to satisfy loan conditions, particularly collateral for mortgage.[254] Even VBP’s non-collateral lending discriminates against women in implementation.[255] Therefore, most lending to women comes from the Women’s Union.[256]
Trade liberalisation means a number of things.[257] Firstly, the entry of foreign banks into rural credit. It is difficult to see how foreign banks, chasing big money, are likely to be of any help to rural dwellers, except large farmers.
Secondly, the right of foreign banks, and enhanced ability of local banks and creditors, to trade land mortgaged by indebted farmers. This is put up as a way to help farmers get loans, whereas it transparently aims to help banks seize and sell land, leading to greater landlessness. Consultations with the poor reveal that many do not want to take out loans precisely because of fear of losing land;[258] and key recommendations of the poor and particularly women were for loans without collateral.[259] Land loss may be particularly likely with credit for certain hair-brained cash crop schemes.
Finally, the removal of interest rate caps, and the abolition of subsidised credit which is considered unsustainable by the World Bank and others, though this was clearly refuted in a DFID study.[260] It is asserted that subsidised rates mean low accumulation of credit, and therefore it does not reach the poor, but people with connections, or better off people who can repay. It is clearly true that there are serious implementation and poor classification problems, and this is an area that needs much work, though reports are mixed and many show that a reasonable amount is reaching the poor. However, abolishing concessional credit and allowing only ‘market’ rates is the surest way to ensure the poor are completely excluded. This author has not found a single source in which the poor themselves, and particularly women, did not support concessional credit, fear higher (“near commercial”) interest rates, or advocate even lower or zero rates.[261]
In the CPRGS, the Government pledges to maintain subsidised credit for the poor and “create conditions for targeted groups, with priority given to women, to access credit at reasonable rates”, but “in the longer term” to shift to “improving access” by simplifying procedures and providing training “rather than apply current preferential system (p72).”

Chapter 8: Agriculture, Industry and Globalisation

Loss of protection for Vietnam’s industry, through tariff slashing and abolition of qualitative restrictions may result in large-scale collapses, with thousands of workers losing their jobs. Many may be in the state sector, which dominates heavy industry. The current SOE reform program is called ‘equitisation’, meaning selling a part of the SOE’s shares to private individuals and companies, with the state maintaining either majority or significant minority shares. This aims to inject more capital into SOE’s and to make them more profit-driven and hence more ‘efficient’, and so more able to survive.
Yet the equitisation program itself will mean the shedding of an estimated 250,000 workers by 2005,[262] and more later, including women and rural dwellers. So far, the Government’s program has been mild, equitising or dissolving SOE’s with only a small fraction of SOE capital, and workers have not been laid off. The Government’s redundancy package is quite good, but workers still prefer to keep their jobs. As such, the ‘slowness’ of equitisation is largely seen to be due to resistance from workers and the refusal of the Government to force their hand. This is the major point of IMF/WB criticism.
Yet even rapid equitisation may not necessarily rescue many from collapse. Collapses of large SOE’s would result in significant losses to the state budget. Moreover, with profit becoming the only motivation for an equitised SOE, it is unclear what would happen to the ‘social obligations’ of certain SOE’s.
Liberalisation advocates however see this as positive. They argue that the reduction of Vietnam’s heavy industrial base will make more credit available for private SME’s in agriculture, non-farm rural enterprises and light export-oriented industry, which will create more jobs than those lost. Moreover, cheaper imported manufactured goods will reduce prices for many consumer goods bought by rural dwellers and hence reduce poverty,[263] and also reduce the prices of plant, machinery, and other purchased inputs for local industry and agriculture.
The reality is not nearly this neat. Firstly, according to a great mass of media reports and analysis, it is precisely SME’s that will be most vulnerable to trade liberalisation, due to their small scale and their limited application of technology.[264] It will largely be the bigger “medium” rather than “small” enterprises that will survive, alongside big private capital, ‘efficient’ SOE’s and FIE’s.
Secondly, protection currently benefits not only ‘heavy’ industry. According to the World Bank’s own figures,[265] agricultural products and light industrial products in labour intensive areas are just as highly protected as ‘heavy’ industrial products (eg, ceramics 127%, textiles 132%, foodstuffs 105%, vegetable and fruit canning 100%, tea and coffee processing 90%, electronic products 65%, while cement is only 90% and equipment and machinery a mere 12%). Hence all sectors will be hit, the growing, labour intensive, electronics sector in particular.[266]
Moreover, the last point tells us something about ‘price falls’ due to cheap imports reducing poverty. If all these prices come down, it means the poor will lose jobs in light industry and jobs, income or farms in agriculture. Hence relative to falling incomes of the rural poor, ‘cheap’ imported goods will be more expensive
For the country as a whole, this could mean a big expansion of the currently widening trade deficit. The country will have to import more ‘heavy’ and other industrial goods (fertilisers, cement, steel, paper, electronic goods, motorbikes etc) with low revenue from exporting agricultural products with falling prices.
Further, the anti-localisation demands of the BTA and the WTO will further reduce local jobs in parts production. A good example is the dispute between the Government and the foreign invested motorbike manufacturers during 2002 over the latter not buying local parts or investing in local parts’ production, which some observers suggested could “jeopardise the nation's entry into the WTO.” Also, in October 2002, the Government decided to exclude imported assembled motorbikes from AFTA cuts, announcing that they will be subject to tariffs of 100 per cent.
The jobs at stake are not simply a few “heavy” industrial jobs for a few workers, but rather this concerns the whole area of linkage with the local economy. An article in Vietnam Investment Review[267] reveals an entire craft village, Rua village in Ha Tay, devoted to production of motorbike components. Such rural traditional craft villages employ large amounts of rural labour, both full-time and part-time, particularly as they are based on low levels of technology but on the traditional cooperative structures among the small household businesses of these villages.
Moreover, when the government backed down, local motorbike assemblers protested, because, they claim, “local manufacturers pay more to the state budget and make a greater contribution to the localisation of motorbike parts by investing in local cooperatives and accessory makers.”[268]
A recent poverty alleviation workshop run by the DFID in Hanoi, based on three years of research, debunked most of the standard myths regarding SOE’s, FIE’s and domestic private enterprises that trade liberalisation dogma is based on[269]. The most interesting conclusions were that:
FIE’s create remarkably few jobs, as they are the most capital intensive area, more so than SOE’s (38.8% compared to 30.9%), and because they rely very heavily on imported components, rather than buying or investing locally
The greatest number of SOE’s are moderately capital intensive (38.7%), that is, they have invested in technology to become more ‘efficient’, but not to the extent of eliminating too many jobs, like FIE’s. In ‘dynamic’ areas, such as garment, they are just as good at creating jobs as are private enterprises – but with better wages and conditions, including for women
While there is a greater percentage of private enterprises than SOE’s or FIE’s that are highly labour intensive (33.2%, 30.5%, 30.1%), the largest percentage of private enterprises are in fact highly capital intensive, more so than SOE’s (35% compared to 30.9%). This indicates that as private ‘SME’s’ become large, they invest in technology to compete on the world market and so shed jobs
The main reason for the very low growth in employment in the 1990’s was not the concentration on so-called ‘capital-intensive SOE’s’, but the elimination of jobs due to greater efficiency, particularly in the sectors most involved in global competition, which is hence likely to continue under the ‘efficiency’ and technology requirements of globalisation. SOE’s were relatively less guilty than either FIE’s or ‘competitive’ private firms
Domestic private firms benefit considerably more from high levels of protection of over 100 per cent than do SOE’s or FIE’s (56.7% compared to 46.3% and 43.7%) and hardly any operate under low levels of protection of under 30 per cent (4.6% compared to 12.7% and 23.7%). Thus small, labour intensive private firms will be massively hit by further trade liberalisation
Thus, SOE’s and capital intensive sectors cannot be said to be especially benefited by protection, and nor can alleged resource allocation in their favour be said to be a brake on employment growth. That does not mean that there is no room for resource reallocation away from heavy industry towards light manufacturing and rural based industries, for example. However, this shift has been going on for years. According to the World Bank’s most recent figures, only around 40 per cent of credit is now going to SOE’s,[270] equivalent to their current weight within GDP and state revenues. Domestic private enterprises now account for 29 per cent of credit, up from zero in 1990. There is still a way to go, but while SOE’s in certain sectors (eg sugar) are among the worst debtors, private enterprises now account for 40 per cent of total outstanding loans.[271]
SOE concentration in heavy industry, which requires far more capital, makes these figures all the more noteworthy. Yet the very fact that light industries require relatively little capital then becomes an argument against virtually any investment in heavy industry, as far more jobs can allegedly be created with the same amount of money. For example, referring to the Hoanh Bo cement project being developed, it “needs $230 million investment and will create only 7000 jobs. If that money was invested in 230 small to medium enterprises involved in handicrafts, aquaculture and food processing, then each million dollars would generate jobs for some 3000 people,”[272] ie, a total of 700,000 jobs.
Regardless of the accuracy of the economics of this assertion, it contains a number of problems. Firstly, if each ‘SME’ employed 3000 workers, they would not be SME’s, but large firms. Secondly, as we have seen, larger firms invest more in technology precisely so as to compete on the world market, and so shed jobs. Thirdly, it is one thing to argue for a relative shift in resources, and another to argue against any heavy industrial project because the same amount of money would allegedly create hundreds of thousands of jobs. The reality is that the number of jobs is restricted by the ability of the world market to absorb products, particularly in competition with other developing countries, and without causing gluts and price drops - it is not endless.
The three industries noted are:
Aquaculture, which has been growing very rapidly in any case. The environmental, food security and world market limitations to endless growth have been noted above.
Food processing, which has also been growing rapidly, its value rising from 34 per cent of total agricultural production in 1990 to 50 per cent now,[273] and exports rising 20 percent per annum. However, as noted above, processed fruit exports are, with certain exceptions, not expanding rapidly and face fierce competition; and the quality and efficiency demands of import markets mean it is larger private or state processing plants that will survive globalisation, not ‘SME’s’.[274] The country is currently suffering from over-investment in sugar processing; all analyses show that large sugar processing plants, with big capacity, are those able to produce cheapest and so survive, while it is the SME’s that will have to close under the impact of trade liberalisation.[275]
Handicrafts are crucial to rural well-being, currently employing 10-13 million rural dwellers in 2000 craft villages, 80 per cent in the north, and 40 per cent in the Red River. Such craft villages are based on small household and semi-cooperative structures. They sell both to the domestic market and account for increasing export revenues – up 40 per cent in 2002 to around $300 million.[276] Many are largely run by women artisans.[277] Yet all accounts suggest that they “are hampered by poor infrastructure, low marketing and management capacity, a shortage of capital and unsustainable techniques” as they take part in global competition.[278] This means that a ‘modern, efficient’ handicraft industry is one where ‘SME’s’ get bigger, drive out rivals, destroy traditional craft village structures, invest in higher technology and shed massive numbers of workers to better compete in exports and with cheaper imports.
8.1 Textiles/garments
The main new export industries to replace ‘inefficient’ heavy industrial SOE’s and absorb retrenched workers and land-starved farmers are garment and footwear. Given that many workers in retrenching sectors are men, and that garment and footwear industries employ a large percentage of women, a crude analysis may even see this as a gain for women. Some 69 percent of the textile and 81 percent of the garment workforce is female.[279]
Garment exports have undergone massive expansion. In the first half of 2002, exports of garments and textiles topped US$900 million, a 1.5-fold rise over 2000.[280] With the BTA, garment exports to the US rose fifteen times, to $598 million, by October 2002,[281] compared to the same period the previous year, though there have been 10 and 20 per cent falls in exports to the EU and Japan, Vietnam’s traditional markets.
However, these exports may not continue to rise at the same rate. The US is set to impose quotas on Vietnamese garments sometime in 2003,[282] and quotas will reflect current levels. As with aquaculture, US garment producers have rushed to demand quotas on Vietnam (and China) as soon as market share approached the one per cent mark. On the other hand, once all world garment quotas are phased out in several years, Vietnam will be competing with developing countries from around the world, many currently restricted by quotas, for the US market, and for the EU market, where Vietnamese products are already sold under quota. By 2005, China is expected to be supplying 48 per cent of garments and textiles across the world.[283] In addition, as with most developing country products, garment and textile prices have dropped 15-20 per cent in recent years.[284]
This will mean far fiercer competition, and according to experts from the Dutch Consulting and Promotion Organisation (CBI), “local garment and textile industry will never be able to compete with the estimated 20 million garment and textile distributors in the world unless they remedy five important deficiencies,” these being reliance on imported raw materials, ineffective corporate management, outdated technology, low productivity and reliance on quotas.[285]
The first deficiency will be enforced by trade liberalisation as dumped US cotton imports make Vietnamese cotton farmers ‘uncompetitive’. The others point to the same problems noted for other industries. That is, small, labour intensive SME’s with ‘outdated technology and low productivity’ will be driven out, while larger private, SOE or FIE firms will stay afloat by investing in technology and hence reducing their ‘labour-intensiveness’.
To date, most US contracts have been won by large state companies. SOE’s have been just as dynamic as other sectors in garment, creating large numbers of jobs, investing in new technology and greatly improving product quality, belying many of the stereotypes about ‘moribund’ SOE’s.[286] Wages and conditions in SOE’s are far superior to those in private or foreign firms, with average wages in the former around one third higher than in the other sectors.[287] In fact, the strength of state enterprises, the expansion of the industry, and the strength of Vietnam’s trade unions and labour legislation means that Vietnam’s alleged ‘comparative advantage’ of ‘cheap labour’ has been undermined, with wages considerably higher than in Indonesia, almost as high as China,[288] and not far below Thailand, countries with much higher GDP per capita.
While almost 90 per cent of workers in SOE’s and 80 per cent in FIE’s have labour contracts, only 40 per cent do in private enterprises, indicating that many of the latter will compete by employing part-time, casual workers without contracts, job security or minimum legal conditions. Of HCMC’s 249 factories, 197 do not provide social security for their employees – mainly the private plants.[289] While workplace accidents have declined in SOE’s, they have risen “between 18 and 31 percent in private enterprises.”[290]
While the SOE conditions are good news for workers, they are not for ‘globalisation.’ Fiercer competition will mean cutting jobs or cutting wages and conditions of workers. According to Deputy Minister of Labour, Invalids and Social Affairs, Le Duy Dong, Vietnam’s entry into AFTA and the BTA have caused “fierce competition and increased cutbacks” in the sector. While SOE conditions are still far superior, the global competitive drive appears in many cases to be reducing SOE conditions to the private sector level.[291]
However, lower wages are making it difficult to attract the skilled workers needed in the industry. The Sai Gon Garment Company, for example, reported spending 1.1 million Dong to advertise but could hire only one worker,[292] while others report massive staff turnover. Therefore, it is mainly the most unskilled rural migrants taking up low paying jobs, particularly in the private sector. While this may be good for rural employment, particularly for women, the poor are only ‘participating in globalisation’ by getting the lowest wages, and then being retrenched due to increasing ‘efficiency’.
Despite terrible conditions, evidence shows that many women do benefit socially and culturally from earning wages in industry and achieving a measure of independence outside the patriarchal household.[293] However, the following factors make it dubious that women can gain much from the garment industry:
Firstly, real independence is difficult because women’s wages are lower than male wages in the industry.[294] Rural poverty and landlessness force poor rural women to accept any jobs offered to them at any wage,[295] so they are over-represented in work places where conditions are poor and wages are low, and in highly unstable jobs. In the informal garment sector, many women work for wages as low as 300,000 Dong ($20),[296] including overtime. Indeed, ‘feminisation’ of labour generally means casualisation, shift to part-time and piece work rates, and ‘flexibility’ in hiring and firing, particularly as multinational and local companies engage in an international ‘putting out’ system of contracting out to informal household enterprises at hugely exploitative rates.[297]
Secondly, despite the myth of female employment gains, women in fact will be the first to suffer from lay-offs both in male-dominated ‘heavy’ sectors and in garment due to investment in new machinery,[298] as they occupy the lower skill jobs and are under represented in managing and decision making positions. The skill levels of women are on average only 40 percent those of men.[299] Indeed, there is a clear recent switch towards hiring a greater percentage of men for this reason.[300] Women are also less confident than about finding new work once retrenched due to their lower skill levels.[301]
Thirdly, new employment opportunities have tended to provide access to women of pre-reproductive age for whom the cost of pregnancy, maternity leave and child care are not yet applicable - these costs make slightly older women unable to compete with men.[302] Their average age is 25, compared to 35 for non-garment workers.[303] State withdrawal from services like child care provision mean such services may be provided by the enterprise – something much less likely for private enterprises, thus leaving women with less time to work, or having to increase their work load to pay for childcare.
Fourth, conditions are often horrendous for women’s health. Many work considerable overtime, some 50 per cent of it involuntarily. Sixty five percent work more than 10 hours a day,[304] well in excess of the 300 hours annual maximum. They work in harmful and toxic conditions and environments, a recent survey by the Labour Confederation showing that 38 per cent of women working in garment factories suffer pulmonary diseases, 32 percent from gynecological diseases, and 11 per cent suffer from arthritis.[305] Trade liberalisation leads to great intensification of work, especially in private companies.[306] Violent crime and rape are reported around industrial zones.
Finally, as NIC experiences show, “the incorporation of women in export-led industries is characterised by an intensified use of female labour followed by quick disposal, creating a constant and rapid turnover of women workers for whom alternatives must be found.” The lack of alternatives (and perhaps also low wages) has led to poverty generation and indentureship, which have driven women into prostitution, international trade of sexual slavery, and the mail-order brides market.”[307] This link between garment, indentureship and sex-work is one well worth researching, even more so given the booming HIV rates and their dramatic poverty inducing effects.

Annex 1: International Implementation of Neo-Liberal Policy Prescriptions

Below are a number of brief case studies of countries that have gone through similar processes of trade liberalisation where results have not been promising from the point of view of poverty alleviation.
Bangladesh: Private sector import liberalisation, hybrid rice and ‘international best practice micro-finance. In 1998, following devastating floods, Bangladesh opened seed imports to private companies. Advanced Chemicals Industries Ltd (ACI) imported hybrid rice from Hybrid Rice International, a subsidiary of Proagro (Aventis), the world’s largest agrochemical company. Supported by IRRI, ACI and a large micro-credit agency, the Bangladesh Rural Advancement Committee (BRAC), sold the seeds. BRAC aggressively promoted Aalok 6201 (the hybrid rice), and farmers had to accept credit at very high interest rates, and accept the proprietary rights of ACI. Only after the harvest were they informed that they were not allowed to save seeds for the following years harvest. Yet despite its high cost and chemical input requirements, Aalok 6201was struck by blast infection and gave little or no yield advantage over local inbred varieties. In some cases now, poor farmers are even given loans part in cash and part in hybrid seeds, even if they have no land to plant it.[308]
China. “While the barrier to China’s agricultural exports is rising, thanks to WTO-approved loopholes, foreign agricultural imports arere flooding into China. Despite the small improvement in rural income last year, it wasn’t enough to revive rural consumption which has been extremely weak, sometimes even declining, since 1997.”[309] Analysts have warned that China’s “mainly inefficient and small-scale agriculture sector could be devastated as tariffs fall following WTO entry. Evidence included Chinese imports of 300,000 tons of edible oils in June alone.”[310]
As for unemployment, “China's increased industrial efficiency had altered the number of new jobs created by economic growth. Whereas China once created 1 million new jobs for every 1 percent of GDP growth, it now creates only 700,000 to 800,000 new jobs. In addition, changes in agricultural practices have triggered a population movement away from the rural and toward the urban areas.”[311] Between 1998 and 2001, over 25.5 million people were laid off by the state enterprises. The government has predicted unemployment will triple in the next four years. It launched a program in 1997 to provide a basic living allowance for urban residents who lost out in the reforms. By February 2002, 13 million people depended on it for survival.[312]
The agricultural liberalisation that Indonesia has undertaken in recent years, due to its commitments to the IMF and WTO, has led to an explosion of food imports of staple crops. It is now one of the world's top rice importers, importing at least 10% of its rice (from 33,000 tons in 1985 to 3.2 million tons in 1995). Between 1995 and 2001, sugar imports increased by 45% and soya imports by 40%. Overnight, the livelihoods of millions have been destroyed.[313] Tens of thousands of workers from sugar plantations and sugar mills launched a coordinated strike and protest action throughout Java in September 2002. “The workers were protesting the anarchic dumping of imported raw and processed sugar onto the Indonesian market following the implementation of new policies mandated by the WTO and IMF. The import tariff on sugar was dramatically reduced, so imported sugar can sell on the market for between 2400 to 2650 rupiah per kilogram. However, production costs for local sugar are around Rp3100-3200, so farmers bear a loss of Rp550 per kilogram. On September 24, another round of sugar worker demonstrations took place, organised by sugar worker and peasant organisations. Hundreds of farmers from the Peoples Front for Agrarian Renewal (FRPA) joined the demonstration.”[314]
In Thailand, where more than 300,000 people have lost jobs in 1997-98, trade union activists claim that a majority of retrenched employees are women. Between 1980 and 1990 illiteracy rates among girls were cut by half. In the past year following the crisis, the elementary school drop-out rate has tripled and a majority of the drop-outs are girls.[315] Meanwhile, domestic producers of agricultural products, such as palm oil, soya oil, soya residues, coconut meat, onion, garlic, potatoes, raw silk thread and skimmed milk powder, are unprotected. Their products are being outmoded by imported goods. The number of family-based farms are declining,[316] becoming part of a contract-farming system linked up with big agricultural corporations.
In Sri Lanka, when the domestic market was opened to minimum levels of agricultural imports at low tariffs, it led to a sharp drop in rural employment with around 300,000 jobs losses in the production of onions and potatoes.[317]
India. Trade liberalisation policies turned India from being self sufficient in edible oils to being the world’s largest importer in just five years.[318] Rural employment in the period 1993-94 to 1999-2000 grew at the very low annual rate of less than 0.6 percent per annum, lower than any previous period in modern history, and only one-third the rate of growth of rural population. Urban employment growth, at 2.3 percent per annum, was also well below that of earlier periods. Per capita food grain consumption declined from 476 grams per day in 1990 to only 418 grams per day in 2001, and even aggregate calorific consumption per capita declined from just over 2200 calories per day in 1987-88 to around 2150 in 1999-2000.
Land reforms (which put a ceiling on land holdings) “are being undone to allow corporate superfarms for luxury production for international markets. Massive displacement of farmers is taking place. Corporatisation of agriculture is leading to new poverty for small farmers as unequal and unfair contracts lock them into a new forms of bondage. Farmers of Punjab who were contracted by Pepsico to grow tomatoes received only Rs.0.75 per kg while the market price was Rs.2.00. First the farmers rejected Pepsico and now Pepsico has abandoned Punjab and sold its tomato processing plant to a subsidiary of Levers.[319]
In Cambodia “the current policy entails raising levels of rice production for export and promotion of privatised imports of seeds, fertilisers, pesticides. Rice imports are also promoted to increase competitiveness within the internal market. In recent days, Cambodian rice cannot compete with Thai rice even though Cambodian rice is better – people cannot think about quality when they cannot feed all their family. Through this process, rural women will have less access to land for subsistence farming, greater difficulties in continuing to work as farmers, and limited opportunities for finding other work. This will lead to the dislocation of families and communities, a more disadvantaged position for women, a widening gap between the rich and the poor and a continuation of the feminisation of poverty.[320]
From 1995-99, the Philippines imported 4.74 million metric tons of rice and 1.18 million metric tons of corn; despite corn self-sufficiency, corn farmers are now exposed to US corn imports selling at half the real cost of production. Rice imports in 1998 increased by 2.2 million m.t., one quarter the country’s rice consumption. This was due to crop conversion and land-use conversion policies on 3.1 million hectares of rice and corn land, shifting to ‘cut flowers’ and vegetables for export, affecting 3 million peasant women and women farm workers. Women finding jobs as agricultural workers earn $2.34 (117 PhP), whereas men earn $2.77 (139 PhP). Two parents working as agricultural workers earn 132 PhP less than government pegged 388 PhP daily cost of living in rural areas. Rural resistance to these policies met with repression – last year Karapatan Alliance for Human Rights documented 614 cases of human rights violations, including many horrific murders
According to Government figures in 1997, one in five factories employ contractual, casual, part-time workers, especially in foreign invested and export oriented enterprises. In Mactan export processing zone, about half the factories employ labour contracting, and most workers are women, often having no security of tenure, earning on piece rate basis, forced to do overtime.
Power was privatised, leading to a 100% increase in electricity rates. Water was privatised in 1997, the big beneficiaries being giant multinational monopolies, and water rates have increased. 981 schools and universities increased fees in 2002, and major hospitals are now slated for privatisation.
There are 8.6 million Filipino migrant workers, of whom 68 percent are women. Large numbers work in domestic help and ‘entertainment’ industries, despite so many horror stories. 25-35000 Filipinas are trafficked every year around the world (National Commission on the Role of Filipino Women), accounting for half of all South East Asian women trafficked annually; 200,000 Filipinas are working in the overseas sex trade.[321]
‘Structural adjustment’ in Mozambique since 1987, with privatisation of over a thousand formerly state-run companies, has led to 120,000 workers losing their jobs. In 1999-2001, some 20,000 jobs were lost. Contrary to the promises of the new owners, many privatised factories did not acquire new equipment - a third of the 1,470 privatised are now paralysed or semi-paralysed, and owe back wages. The worst debacle was the cashew processing industry. Here the World Bank demanded that the industry be stripped of protection. Mozambican cashews were exported raw to India, while one by one, the local processing plants, starved of raw material, closed down. Ninety per cent of the more than 10,000 people who used to work in cashew processing have lost their jobs.[322]
Kenya, which was self-sufficient in the 1980s, is now importing 80% of its food. “In 1992, EU wheat was sold in Kenya at a price 39% cheaper than it was purchased from European farmers. In 1993, it was 50% cheaper. In 1995, Kenyan wheat prices collapsed through oversupply.”[323]
In Argentina, one of the world's top exporters of agricultural commodities, and which produces enough food to meet the needs of its 37 million people twice over, 52 percent of the population is poor and 20 percent is living in the most abject poverty.[324] Several years ago, it was touted as a model of neo-liberal development under IMF guidance.
The public water system in a large city in Bolivia was sold in 1999 to the California-based TNC Bechtel, under World Bank threats to withhold debt relief and development assistance. Bechtel immediately imposed huge rate hikes. “Families living on the local minimum wage of $60 per month were billed up to 25 percent of their monthly income. The rate hikes sparked massive citywide protests” that the Bolivian government used armed force against. More than a hundred people were injured and one 17-year-old boy was killed. In April 2000, Bechtel abandoned the project, but is now suing Bolivia for $25 million![325]
Three years ago Mexico imported half a million tons of rice. It now imports 7 million tons. While Mexico's corn economy is being destroyed, it is importing yellow corn from the US, which is used to feed animals in that country. Mexicans eat white corn which is culturally more appropriate to their food system. In 1992, Mexico imported 20% of its food. In 1996 it was importing 43%. One of every two peasants is not getting enough to eat. In 18 months since NAFTA, the intake of food has declined by 29%, 2.2 million Mexicans have lost jobs and 40 million are in extreme poverty.[326]
The phase-out in January of most agriculture tariffs under NAFTA will accelerate the consolidation of Mexican farming into large agro-industrial enterprises, depriving many peasants of their livelihood and forcing them to migrate to the cities or the United States. Since early 2001, Mexico has shed more than 250,000 manufacturing jobs as U.S. and other foreign firms have shifted operations to China, where labor costs are between one-third and one-half lower.[327]










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[1] As opposed to the rest of the country, more ethnic minority people fell into poverty in 1993-98 than escaped from it, Justino and Litchfield, 2002, Table 3,6, p32, 34
[2] Gender Action, 2002
[3] FAO/UNDP, 2002
[4] National Committee for the Advancement of Women, 2000, p15
[5] Sultana P., and Nga T.T., 2002, p193-201.
[6] International Monetary Fund, 2000
[7] ibid, Point 17
[8] World Bank, Country Assistance Strategy – Vietnam, September 22, 1998
[9] World Bank, Poverty Reduction Support Credit, Point 77, “Status of CAS Triggers’, 2001
[10] World Bank, Country Assistance Strategy – Vietnam, Annex, ‘Triggers for Bank Lending Scenarios’
[11] The CAS notes that “the new investment law has made some progress by allowing foreign investors, including IFC, to take an equity stake of up to 30%, but a further relaxation to take equity positions in domestic enterprises investments could support the equitisation program”.
[12] ActionAid Vietnam, December 2001
[13] That is, against the World Bank’s major agricultural paper, Advancing Rural Development, 1998
[14] ‘Oxfam GB, 2001, and Catholic Relief Services, Vietnam, 2001
[15] World Bank, 1998 II
[16] ‘ASEAN Advances Vietnam’s Deadline for Regional Integration’, Viet Nam News, August 27 2002; ‘AFTA Membership May Mean Some Industries Go Under, Officials Caution’, Vietnam Investment Review, August 12-18 2002
[17] Anderson, p 36
[18] Examples given in Oxfam’s Rice for the Poor report 2002
[19] Anderson, p 36
[20] ibid p 37
[21] ‘International conventions don’t even out unequal servings’, Viet Nam News October 3, 2002
[22] Action Aid Crops and Robbers, October 2001
[23] See TRIMS provisions of the US-Vietnam Bilateral trade Agreement
[24] GRAIN, 2001
[25] All quoted from CPRGS, Socialist Republic of Vietnam, Hanoi May 2002
[26] In 2002, Vietnam collected $US 2.2 billion in import and export taxes
[27] WB/ADB, Vietnam: Delivering on Its promise, Hanoi, 2002, p125
[28] Viet Nam News September 28 2002, quoting Politburo member Phan Dien
[29] ‘Loans put the landless farmers of Tra Vinh back on solid ground’, Viet Nam news, July 26, 2002; ‘Government provides land to ethnic minorities in Central Highlands’, Viet Nam News, October 11, 2002
[30] ‘Farm owners labour for increased growth in VN’s agricultural sector’, Viet Nam News, February 17, 2003
[31] ‘Loans put the landless farmers of Tra Vinh back on solid ground’, Viet Nam news, July 26, 2002
[32] See, for example, Fforde and Huan, 2001
[33] ‘The government action program’, Viet Nam News, September 23, 2002
[34] According to personal communication with Brian Doolan, CARE Country Director, January 2003
[35] ‘NA calls on Govt to pick up pace of socio-economic development’, Viet Nam News, December 17 2002; see also ‘Preferential loans granted to coops’, Viet Nam News, August 3 2002, and ‘HCM city pushes for more farm coops’, Viet Nam News, August 7 2002
[36] Nguyen Van Cam, ‘Business Beat’, Viet Nam News December 16 2002
[37] Truong, 1997 I; Hoa, Sutherland, Thoburn, DFID, 2002, p46.
[38] Prime Minister’s Decision No.19/2002/QD-TTG
[39] ‘World Bank economist's efforts recognized in Vietnam's development’, Young People, December 20, 2002
[40] Weisenfeld P., 2002.
[41] Haspels N., 2000.
[42] Oxfam GB, Save the Children UK and the World Population Foundation, 2002
[43] Wagstaff, A, 2001
[44] MoET 2002
[45] World Bank, 1998 II
[46] Gender Action, 2002
[47] Chossudovsky
[48] World Bank, 1998 I, Point 54
[49] Marcela Valente, Argentina - Gov't Launches Overdue Attack on Hunger, IPS, November 25, 2002
[50] Stratfor, ‘2003 Annual Forecast War in Iraq: Springboard or Sandbag?’, January 1 2002
[51] Oxfam, Rigged Rules and Double Standards, 2002
[52] ibid.
[53] Bello, 2001
[54] ‘Vietnam’s exports up 10%, Imports up 18.6% in 2002’, Tuoi Tre, January 2, 2003
[55] Eva Cheng, Green Left Weekly, May 15, 2002, ‘Huge farm subsidies expose ‘free trade' hypocrisy’
[56] ‘Aid Groups Claim EU Farm Subsidies Hit Poor Countries’, Viet Nam News, November 1, 2002
[57] Guy Verhofstadt, ‘Hypocrisy behind compassion, says Belgium’s PM’, Viet Nam News, October 19, 2002
[58] Anderson, p33
[59] Eva Cheng, ‘US, EU bully Third World in trade talks’, Green Left Weekly, December 11, 2002
[60] Anderson p 34
[61] Centre for Food Economics Research, 2000
[62] Eva Cheng, Green Left Weekly, May 15, 2002, ‘Huge farm subsidies expose ‘free trade' hypocrisy’
[63] Strong evidence can be found in Anh and Hung, 2000 and Truong 1997 I.
[64] Truong, 1997 I
[65] Gender Action, 2002.
[66] Anh and Hung, 2000
[67] Truong, 1997 I
[68] ibid.
[69] Anh and Hung, 2000
[70] FAO/UNDP, 2002
[71] Anh and Hung, 2000, p173-75
[72] EU Women’s Lobby website
[73] Truong, 1997 I
[74] FAO, 2001
[75] Binh and Lan, 1996.
[76] Sultana and Nga, 2002, p198
[77] Binh and Lan, 1996
[78] FAO/UNDP, 2002
[79] Truong, 1997 I
[80] ibid.
[81] Anh,1999:107
[82] Oxfam, 2002
[83] Oxfam 2002
[84] Gender Action, 2002
[85] World Bank, 1998 II
[86] Vietnamese Communist Party, 1996
[87] ibid, p195
[88] ‘Food security remains a prime concern: regional researchers’, Viet Nam News September 16
[89] ‘Improving rice strains will boost living standards for farmers: scientist’, Viet Nam News Oct 18
[90] ICARD, 2002
[91] “In general, we consider it to be a huge success”, Don Mitchell, Economist, World Bank, quoted from Greenfield, 2001; Fforde, 2002, talks of the “extremely good responsiveness to market signals”, but later grants it may have been “too responsive”, p367, 376.
[92] ‘District rides high despite coffee’s dive’, Viet Nam News, April 23 2002,
[93] ‘Pepper industry needs to spice up its act’, Viet Nam News November 11 2002
[94] ‘Cashew price slump hurts exporters’, Agroviet News 17/12/02
[95] ‘Grassroots sericulture needs help to recover from world silk crisis’, Viet Nam News, Oct 12 2002
[96] ‘Tea exports take a tumble as Iraq conflict brews’, Vietnam Investment Review, Feb 24 – March 2 2003
[97] ‘Fisheries sector enters rough waters with tough export targets ahead’, Viet Nam News, July 6, 2002
[98] ‘Shrimp breeders stop work’, Viet Nam News, August 24, 2002
[99] ‘Maize growers plan to edge out imported rivals with bumper crop’, Viet Nam News May 11, 2002
[100] ‘Escaping the maize of poverty’, Viet Nam News, January 18, 2003. Farmers in Son La’s Co Noi commune are said to be earning an average income of $228 a month from maize production.
[101] ‘Expert turns accusations of price dumping back on the United States’ Viet Nam News August 21, 2002
[102] ‘Govt pumps capital into cotton farms’, Viet Nam News June 11, 2002
[103] ‘Vietnamese farmers have a boll with new cotton growing incentives’, Viet Nam News September 13, 2002
[104] ‘Cotton growers fret as prices plummet’, Viet Nam News May 27, 2002
[105] Thurow and Kilman, 2002
[106] ‘Cotton growers fret as prices plummet’, Viet Nam News May 27, 2002
[107] ‘Garment industry urged to shape up’, Viet Nam News July 30, 2002
[108] ‘Cotton growers fret as prices plummet’, Viet Nam News May 27, 2002
[109] ‘Garment industry urged to shape up’, Viet Nam News July 30, 2002
[110] ‘Vietnamese farmers have a boll with new cotton growing incentives’, Viet Nam News September 13, 2002
[111] MARD/ISG, 2002
[112] ‘Salt imports flood local market’, Viet Nam News, April 4 2002

[113] Above information on fruit drawn from Truong Cong Kha, ‘Fruit farmers warned to shape up or they’ll fail to ship out in future’, Viet Nam News, October 11, 2002; Ha Phuong, ‘Playing the fruit machine’, Vietnam Investment Review, September 23-29, 2002; and Tu Hoang, ‘Fruits of neglect’, Vietnam Economic Times, September 2002.
[114] All this section on litchi and longan growing comes from the Viet Nam News articles ‘Plunging litchi prices sour the outlook for Luc Ngan producers’, May 19, ‘Mekong farmers stare ruin in the face as longan prices plunge’, July 4, 2002, ‘Litchi centre to stabilise prices’, May 10, 2002, ‘Fruit farmers warned to shape up or they’ll fail to ship out in future’, Truong Cong Kha, October 11, 2002, and ‘Bumper litchi harvest yields a bunch of marketing difficulties’ October 23, 2002.
[115] ActionAid Vietnam, Stop the US Trade War on Vietnam, 2002
[116] ibid.
[117] “Feed accounts for the greatest portion of breeding cost. The two major components of feed are corn flour and soya powder,” ‘Catfish business takes off after Mekong breeders net a tidy profit’, Viet Nam News July 26, 2002
[118] ‘Shrimp exporters cast global net’, Viet Nam News, October 5, 2002
[119] World Bank, 1998 II
[120] Anderson, p 54
[121] This is very clearly spelt out in Oxfam GB/HK, Rice for the Poor, 2002
[122] The wealthiest region is the South-East, which includes Ho Chi Minh City, but this region also has massive inequality and huge numbers of urban poor.
[123] Niimi, Y, Vasudeva-Dutta, P, Winters, A, 2002, p12.
[124] Oxfam GB/HK, Rice for the Poor, 2002
[125] The devaluation of the rupiah led to a 6-fold increase in the domestic rice price; bankrupt consumers could not afford to buy from their own farmers. This artificial “rice shortage” boosted world prices, so Vietnam could sell to Indonesians at a high price which was still “cheap” compared to local prices.
[126] As the World Bank itself acknowledged when making these demands.
[127] As of October 2002, Vietnamese export 25 per cent broken rice is trading at $173 a tonne, compared to $245 in 1997 and $273 in 1998
[128] While increasing 24% in value due to better prices, ‘Rice exports reach 3 m tonne mark’, Dau Tu, October 28 2002
[129] ‘Vietnam loses rice share to India’ October 23, 2002 Thoi Bao Tai Chinh Viet Nam
[130] Tu Giang, ‘Quality or perish’, Vietnam Economic Times, February 2003
[131] The CPRGS pledges to “continue to remove QR’s imposed on rice exporting enterprises … continue to liberalise output markets (rice, coffee etc)”, suggesting such liberalisation is not yet complete; in the BTA, the removal of qualitative restrictions, licensing restrictions and state trading regarding rice exports are all in the “unbound” category, meaning that Vietnam is not bound to phase them out
[132] Of $600 million in rice exports in 2002, $500 million was exported by just two state companies, the Northern and Southern Food Corporations, and there are many other state exporters before coming to private ones, ‘MARD exports reach $803 million’, Viet Nam News, November 11-17, 2002
[133] ‘Seeds of Doubt’, Vietnam Economic Times, February 2002
[134] Oxfam notes this problem in Rice for the Poor, 2002, though appearing to endorse this ‘level playing field’
[135] Development Forum, 2002, p23-24, 26-27
[136] Shiva 2001
[137] Shiva, Holla and Menon, 2001
[138] Feyissa, 2001
[139] ‘Bigger exporters targeted to filter out coffee losses’, Vietnam Investment Review, June 22-28, 2002
[140] Niimi, Vasudeva-Dutta, Winters, 2002, Appendix 1, Table 4.
[141] Kolko, 1997, p105-6
[142] Oxfam GB/HK, Rice report 2002
[143] “Between 45 and 75 percent of rural incomes are related to making and selling handicrafts,” ‘Crafty solutions, Vietnam Economic Times, September 9-15, 2002
[144] Justino and Litchfield, 2002, p37
[145] Niimi, Vasudeva-Dutta, Winters, 2002, p11
[146] ibid p6
[147] ibid pp 13-14, 32, 36. 43 percent of all people falling into poverty were in the Mekong, p34
[148] ActionAid/Centre for Rural Progress, Rice and Trade Liberalisation Report, 2002
[149] ‘Improving rice strains will boost living standards for farmers: scientist’, Viet Nam News Oct 18 2002, quoting Professor Nguyen Van Luat
[150] ‘Food security remains a prime concern: regional researchers’, Viet Nam News September 16, 2002, quoting Doctor Luong Thi Minh Sam, Deputy Director of the Institute of Social Sciences in HCM City
[151] ActionAid/Centre for Rural Progress, ‘Fertiliser Situation’ in Rice and Trade Liberalisation Report, 2002
[152] Oxfam GB and HK, Rice for the Poor, 2002, p 44
[153] ‘The Bilateral Boost’, Oman Economic Review, 2000
[154] World Development Movement, 2002
[155] ‘Fertiliser price spike hits local farm sector hard’, Viet Nam News, February 25, 2003
[156] ‘Local Suppliers Find Fertiliser on the Nose for Cash-Strapped Farmers,’ Viet Nam News, November 4, 2002, at a seminar in November 2002 in Hanoi, held by the NFA and the VFA
[157] According to Oxfam GB & Oxfam HK, Rice for the Poor, 2001, p47, 59
[158] ‘Fertiliser sector pleads for tax cut’, Vietnam Investment Review November 4-10, 2002
[159] Oxfam GB & Oxfam HK, Rice for the Poor, 2001
[160] GRAIN, 2000
[161] Action Aid, 2001
[162] GRAIN, 2000
[163] ibid.
[164] GRAIN, March 2000
[165] Isis International, 1999
[166] ‘Gene technology could engineer solution to rice production problems’, Viet Nam News September 28, 2002
[167] GRAIN, 2000. In Cambodia, one hybrid accounts for 84% of the dry season crop; in the Philippines, two account for 98 per cent of the entire rice crop.
[168] ‘Gene technology could engineer solution to rice production problems’, Viet Nam News September 28, 2002
[169] GRAIN, 2000
[170] Nadeem Iqbal, ‘Pakistan compromises on GM seeds question’, Viet Nam News, November 16 2002
[171] World Bank 1998 II
[172] Pesticide Action Network, 2002. Activities “including illegal toxic shipments, chemical dumping and accidents, chemical testing on humans, harassment of farmers, false advertising and racketeering”
[173] GRAIN, 2000, for the rise in pest attacks on hybrid rice in China.
[174] ‘Technology needed down on the farm’, Viet Nam News, October 2, 2002
[175] Isis International, 1999
[176] ‘Agbiotech revolution yet to reap harvest’, Vietnam Economic Times, June 17-23, 2002, quoting Dr Nguyen Van Uyen of the National Centre for Natural Science and Technology
[177] GRAIN, 2000.
[178] For example, ‘Fertile minds find use of green waste’, Viet Nam News Oct 11, 2002, ‘Rice farmers boost yields, cut costs with innovative cultivation method’, Viet Nam News June 10, ‘Farmers choose their future’, Viet Nam News October 5, 2002
[179] ‘Minister says VN well on way to world standard livestock, crops’, Viet Nam News Aug 27, 2002
[180] ‘Northern ricebowl farmers come to grips with the latest in agriculture’, Viet Nam News Aug 19, 2002
[181] ‘Cuu Long Delta farmers pioneer ambitious organic rice growing plan’, Viet Nam News, June 3, 2002
[182] ‘Viet Nam's Crop Diversity threatened by Commercial Agriculture’, Viet Nam News, 2002
[183] Sowerwine, 1999
[184] Tu Giang, ‘Prawn Cocktail’, Vietnam Economic Times, November 2002
[185] ‘Shrimp exports key to fisheries plan’, Nguoi Lao Dong, October 21, 2002
[186] Tu Giang, ‘Prawn Cocktail’, Vietnam Economic Times, November 2002
[187] World Bank, 1998 II
[188] Environmental Justice Foundation, 2002
[189] Food First, 2002
[190] Tu Giang, ‘Prawn Cocktail’, Vietnam Economic Times, November 2002
[191] Environmental Justice Foundation, 2002
[192] Environmental Justice Foundation, 2002
[193] Margot Cohen ‘Sweet and sour shrimp’, Far East Economic Review, September 5, 2002
[194] ‘Mekong Delta rice under assault from burgeoning salt invasion’, Viet Nam News, February 24, 2003
[195] Tu Giang, ‘Prawn Cocktail’, Vietnam Economic Times, November 2002
[196] ibid.
[197] ‘American project to breed major changes for Hai Phong shrimp farms’, Viet Nam News, August 10, 2002
[198] Cohen, 2002
[199] ibid.
[200] ICARD, 2002
[201] FAO/UNDP, 2002
[202] Oxfam GB and HK, Rice for the Poor, 2002
[203] Oxfam GB/HK, Impacts Of Coffee Prices Under Trade Liberalization, 2002
[204] Tu Giang, ‘Prawn Cocktail’, Vietnam Economic Times November 2002
[205] Lao Dong, September 27, 2002
[206] Environmental Justice Foundation, 2002
[207] FAO/UNDP 2002
[208] Truong, 1997 I, “there appears to be a process of land dispossession which is gender-specific,” p93.
[209] Oxfam GB/HK, Impacts Of Coffee Prices Under Trade Liberalization, 2002; Oxfam GB 2001.
[210] FAO/UNDP 2002 p11
[211] World Bank, 1998 II
[212] World Bank, 1998 II. The report states that nonfarm (private) establishments and nonfarm household (enterprises) yielding profit/capital ratios of 20 percent and 17 percent, respectively, while the average ratio for SOEs in the same year was 11 percent.
[213] World Bank, 1998 II
[214] World Bank, 1998 II
[215] Oxfam GB/HK Rice for the Poor, 2001
[216] WB, ADB, 2002, p125, compared to WB/ADB/UNDP, 2001
[217] Vietnam Economic Times, November 2002, Statistics section.
[218] ‘Deputy PM calls on state sector to step up enterprise reform’, Viet Nam News, December 16, 2002
[219] ICARD, 2002
[220] ‘Tea exporters see chance’, Viet Nam News, September 17 2002
[221] ‘Salt imports flood local market’, Viet Nam News, April 4 2002
[222] ‘Big salt shake up for Ninh Thuan’ Viet Nam News, Sept 18 2002
[223] ‘Can Gio District experiences a salt rush despite very modest rewards’, Viet Nam News ,July 15 2002
[224] Oxfam GB/HK, Rice for the Poor, 2002, p34
[225] Moreover, in 1999, of total revenue of 326 billion dong, total profit was 31 billion, of which contributions to the state budget amounted to 26 billion dong – five sixths of profit – further indicating the usefulness of healthy SOE’s to poverty alleviation.
[226] ActionAid/The Center for Rural Progress, Report on Trade Liberalisation and Sugar, p 40-41, 49-50
[227] Truong, 1997, I, p 95, 103
[228] Truong, 1997 II
[229] Rosset, 2000; Pearce, 2001.
[230] ‘Farm owners labour for increased growth in VN’s agricultural sector’, Viet Nam News, February 17 2003
[231] For example, farmers in Binh Tay Cooperative in Tien Giang were provided with rice strains ST3 and VD2 for trial. Impressed by the results, the Tien Giang Foodstuff Company has signed a contract to buy up next year’s entire winter-spring crop, ‘High-yield rice stitches up contracts’, Viet Nam News, October 23 2002
[232] Presentation by Brian Doolan to Plenary Meeting of the International Support Group, June 7 2002
[233] Truong, 1997 I, p83-86
[234] FAO/UNDP 2002
[235] Anh 1999, p103
[236] Binh and Lan, 1996 and Anh, 1999
[237] Truong, 1997 I, p93
[238] Isis International, 1999, FAO 1998 figures.
[239] Truong, 1997 I, p93
[240] CPRGS p 70
[241] ‘Govt eyes closely meshed farm sector’, Viet Nam News, December 18 2002
[242] ‘Enterprises should cut out middle men and sign contracts with farmers’, Viet Nam News, July 12, 2002
[243] Gender and Trade Network - Asia
[244] ‘Cheap price of water puts lid on investment’, Viet Nam News, July 5, 2002
[245] ‘Plug pulled on electricity price hike decision date’, Vietnam Investment Review, May 22-June 7 2002
[246] ‘Power price hike gains approval’, Vietnam Investment Review, September 30-October 6 2002
[247] ‘Profitable power behemoth eyes expansion’, Viet Nam News, August 15, 2002
[248] ‘First telecoms price drop pledge met’, Vietnam Investment Review, July 1-7 2002
[249] Truong, 1997 I
[250] BTA (quoting WTO regulations), ‘Trade in Services’.
[251] DFID, 2001
[252] FAO and UNDP, 2002
[253] Binh and Lan, 1996.
[254] Women’s obstacles to access to credit were also analysed in Huong, 2000, and Loan, Nhan, Fyles, 2002
[255] Loan, Nhan, Fyles, 2002, p141, 143.
[256] Ngoc, 2002
[257] The following all recommendations of the World Bank in Advancing Rural Development, 1998 II
[258] Oxfam GB/HK Rice for the Poor, 2002; Christopoulos, 1997, p204
[259] Pre-CPRGS poverty consultations in Ha Tinh (ActionAid), Tra Vinh (Oxfam GB), Vinh Long (CRS)
[260] DFID, 2001, p9
[261] Consultations with the Poor in Ha Tinh, Tra Vinh, Vinh Long; Isis International, 1999; TWG, CFAW, MARD, Resources for Sustainable Livelihoods: Targeting Female-Headed Households, WARI Workshop; and countless other sources.
[262] World Bank/Asia Development Bank, 2002, p 71
[263] World Bank, 2002, p96-98
[264] ‘SME’s face integration challenges’, Vietnam Investment Review, December 9-15, 2002; ‘WTO membership signals SOS for SME’s’, Lao Dong, August 7, 2002; and masses of other reports
[265] World Bank, ADB, UNDP, 2001, p25
[266] ‘Tariff drop threatens electronics sector’, Vietnam Investment Review, June 22-28, 2002
[267] ‘Parts of a bigger picture’, Vietnam Investment Review, November 4-10, 2002
[268] ‘Local motorbike assemblers at odds with quota allocations’, Phap Luat, November 7, 2002
[269] See particularly Jenkins, 2002
[270] World Bank and ADB, 2002, p30
[271] ‘Banking credit revamp continues’, Interview with Central Bank governor Le Duc Thuy, Viet Nam News, November 21 2002
[272] ‘Free trade zone forces rethink’, Pham Chi Lan, vice president of the Vietnam Chamber of Commerce and Industry, Viet Nam News, January 18, 2002
[273] ‘Food processing industry gearing up to serve domestic and foreign markets’, Viet Nam News, May 14, 2002
[274] ibid; ‘Hanoi to overhaul food processing sector’, Viet Nam News, August 1, 2002
[275] MARD/ISG, 2002, p17
[276] ‘Handicrafts rise above export slump’, Viet Nam News, September 27, 2002
[277] Vietnam News Service, October 21 2002
[278] ‘Handicrafts supplant farming in north’, Viet Nam News, December 18, 2002
[279] Thoburn, Ha, Hoa, p28
[280] ‘Garment industry urged to shape up’, Viet Nam News, July 30, 2002
[281] Folkmanis, 2003
[282] ibid, and a mass of other reports.
[283] ‘Garment sector told to tighten operations’, Vietnam Investment Review, December 9-15 2002
[284] ibid
[285] ‘Garment makers blasé over integration challenges’, Lao Dong, October 24,2002
[286] Thorburn, Ha, Hoa, 2002
[287] Navdi and De Armas, 2002
[288] Thoburn, Ha, Hoa, p24
[289] ‘Decree aims to settle job disputes’, Viet Nam News November 14, 2002
[290] ‘Negligence causes increase in work accidents: union’, Viet Nam News, January 15, 2002
[291] Kabeer, 2002
[292] ‘Garment industry urged to shape up’, Viet Nam News, July 30 2002
[293] Sakanond, 1998/99, quoting Jayati Ghosh, Centre of Economic Studies and Planning, Jawaharlal Nehru University in New Delhi
[294] Hoa, Sutherland, Thoburn, 2002, p19
[295] Anh and Hung, 2000, p100
[296] ‘Loneliness haunts young workers’, Viet Nam News, January 16, 2003
[297] Gender and Trade Network - Asia
[298] Thoburn, Ha, Hoa, p28
[299] Hoa, Sutherland, Thoburn, p21
[300] Hoa, Sutherland, Thoburn, p46
[301] ibid p24
[302] Truong, 1997 I
[303] Kabeer 2002
[304] ibid.
[305] Lao Dong, September 27, 2002; Global Standards, 2002
[306] Hoa, Sutherland, Thoburn, p24
[307] Truong, 1997 I, p111
[308] GRAIN, 2000
[309] Eva Cheng, ‘CP welcomes capitalists into its ranks’, Green Left Weekly, November 20, 2002
[310] ‘WTO entry hurts Chinese farmers’, Viet Nam News, August 6, 2002
[311] Stratfor ‘Acknowledging Economic Inconsistencies’, January 5, 2003
[312] IBON Features 2002-57, August 23, 2002
[313] Zanny Begg, ‘World's poor at the mercy of the WTO’, Green Left Weekly, November 20, 2002
[314] Max Lane, ‘Indonesia: Crisis begins to unite workers and peasants’, Green Left Weekly, October 2, 2002
[315] Sakanond, B, 1998/99
[316] Isis International, 1999
[317] Isis International, 1999
[318] Madeley 2000
[319] Shiva, 2001
[320] FAO/FWP, 1999 cited in Womyn’s Agenda for Change/Oxfam Hong Kong, Cambodia, 2000
[321] GABRIELA, 2002
[322] Mozambique Information Agency, 2002.
[323] Feyissa, 2001, Third World Network
[324] Valente, 2002
[325] Earthjustice, 2003
[326] Carrera, 2001
[327] Stratfor, 2002

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