With more than 70 percent of the population living in rural areas, developing the rural economy is considered vital for the country. In recent years, the Party and State have issued many policies to improve the rural economy. The Party Central Committee's Resolution No 26 on agriculture, farmers and rural areas, enforced 2 years ago, has remarkably changed the structure of economy and labour force, providing the basis for building a new model for rural areas.

Despite comprehensive promulgation of the policies, especially those related to bank credit, the imperfect implementation still retards the development of rural economy.

According to Nguyen Phong Quang, a member of the Party Centre Committee and Deputy Head of the Southwestern Steering Committee, it is crucial to have a plan for the rural economic development because it is the fundamental for the region’s sustainable development.

Over the past years, Vietnam has become a large exporter of rice, coffee and aquatic products. However, the farmers still face many problems and remain the poorest group of the society.

The average income of the urban residents remains two times higher than those of rural dwellers. The poverty rate in the countryside is 18.1 percent while it is only 3.1 percent in the urban areas.

Recent surveys show that farmers now want to change their occupations because it brings very low income. How to create jobs for young people in the rural areas is also a thorny issue.

There are several reasons for the problem. Firstly, the amount of agricultural land has been reduced sharply. The country now has 70 million ha of agricultural land but only 4 million ha is used for rice cultivation.

The Ministry of Agriculture and Rural Development (MARD) estimated that every year, about 73,300ha of agricultural land is taken back affecting nearly 2.5 million people. Over the past five years, the amount of agricultural land taken back reached more than 154,000 ha, which means that the land used for rice cultivation has reduced by 7.6 percent.

Meanwhile, the policies for agricultural land have numerous problems and are outdated. MARD Deputy Minister Diep Kinh Tan said that besides these issues, the policies for agriculture development need to focus on transferring new knowledge and technology to farmers. They should also concentrate on how to use the state budget more efficiently to upgrade infrastructure in the rural areas.

At the last conference on comprehensive implementation of solutions to boost rural economy, the organisations and provinces across the country agreed that the ministries, departments, businesses and credit institutions should all engage in carrying out the already enforced policies. They should also join hands to work out new methods to help transform these policies into the reality.

The Minister of Industry and Trade, Vu Huy Hoang, said that the government needs to reorganise the production to meet the current conditions of the rural areas. It should also provide farmers with information on the markets and consumption.

Nguyen Van Giau, Governor of the State Bank of Vietnam, stressed that the conference provides a forum to tackle the problems of rural development.

Conference attendants also discussed ways to increase farmers’ access to banks credit and strengthen the linkage between farmers, scientists, entrepreneurs and bankers. They also debated on the role of the Vietnam Farmers’ Union. Many administrative agencies and economic institutes proposed to expand the outlet and export of agriculture products, minimise risks in production, encourage the farmers to apply new technologies and provide them with training courses.

Also at the conference, the banks, the unions and associations signed 7 cooperation agreements to develop the rural economy.