Agriculture is a very sensitive sector of Vietnam as it represents 69 percent of the country’s labour force and 45 percent of rural people are living under the poverty line. WTO membership will bring the sector many chances and a lot of challenges as well.

Short-term and long-term challenges

The competition faced by farmers whose products are either exported or domestically consumed will become fiercer in every aspect, leading to lower prices. This of course will benefit consumers and deprive farmers.

Experiences of many countries have shown that market opening does not necessarily result in low prices for poor people in urban areas as profits are high for big importers or manufacturers. Moreover, low food prices today can have long-term impacts on food security of a country in the future.

Vietnamese farmers have advantages in many export products, of which future growth is potential, like rice, pepper and cashew nuts. However, they will find it hard to compete with foreign manufacturers of many products like sugar, corn, dairy products and meat for their low competitiveness.

Moreover, the country’s major export products like rice or import products like corn get huge subsidies in rich countries and are protected by high tariffs.

The US Government annually grants a subsidy of US$10 billion to corn farmers. Each cow in the EU gets a US$2.62 aid per day and this sum is even higher than daily income of a Vietnamese poor farmer.

Future plan

In the meantime the production and trading efficiency of many agricultural products remains low. However, if there is appropriate investment, this can be enhanced to ensure food security, and acceptable income for farmers even when the market is plummeting.

In many cases, the Government can help farmers diversify their products or shift to other plants. Priority plants and animals to be raised should be selected on the basis of market demand instead of existing supplies.

Poor farmers, especially those live in areas with severe natural conditions, should apply a complex pattern including growing trees, raising cattle, poultry and fish, afforesting, etc...

Moreover, the Government needs to build more infrastructures for trading and marketing activities. It should also invest more in research activities to create more high quality varieties of plants and cattle and improve sanitary conditions.