Challenges to Rural Poverty Reduction in Viet Nam - Oxfam Blogs

Five-year Synthesis Report
Part 2: Challenges to Rural Poverty Reduction in Viet Nam
TABLE 2.12. Percent of households selling no products and buying no
materials, 2007-2011
75
Commune
Selling no products in the
last 12 months (%)
Buying no agricultural
materials in the last 12
months (%)
2007 2011 2007 2011
Thuan Hoa 42 17 10 2
Ban Lien 9 26 20 17
Thanh Xuong 48 7 17 0
Luong Minh 96 89 93 89
Duc Huong 22 8 10 8
Xy 26 9 98 98
Cu Hue 7 15 7 20
Phuoc Dai 51 33 56 58
Phuoc Thanh 44 43 85 89
Thuan Hoa 52 48 50 41
Average 40 30 45 42
SOURCE: Household interviews
Improvements in infrastructure, information and communication has improved market
access for many people. New markets in Thuan Hoa-Ha Giang (2008), Ban Lien-Lao Cai
(2008) and along the road from Ky Son district through Cham Puong, Luong Minh-Nghe
An (2010) has provided people with the opportunity to buy and sell produce. However,
local residents in remote mountainous ethnic minority areas participate less in
the market than Kinh in lowland areas, as they still rely on traditional upland farming
for domestic consumption and do not use commercial supplies. In Luong Minh-Nghe An
and Phuoc Thanh-Ninh Thuan, the proportion of people with access to markets is the
lowest, and poverty incidence the highest.
The capacity to engage in market transactions with few intermediaries leads
to increased incomes. In lowland communes, with favourable transport roads, people
have more choices for selling agricultural produce or purchasing agricultural supplies.
In Cu Hue-Dak Lak, people can sell agricultural produce (hybrid corn, coffee and pepper)
directly to agents or traders. They can also buy agricultural supplies directly from private
sales agent networks. In remote communes, local shops play a very important role. People
can borrow rice, seeds, fertilizer and other necessities for home consumption. They can
even borrow money to attend weddings and funerals and to pay children’s school fees.
Although repayment is often in kind, interest rates tend to be high (up to 3-4%/month).
The Government no longer supports households with transportation or price subsidies,
but, since 2010, provides cash or kind of 80,000 VND per person per year in Category
II communes and 100,000 VND per person per year in Category III communes (Decision
102). Most communes at the monitoring points apply for in-kind support, based on the
stated needs of poor households. However, the system has had some difficulties: as
funds were not disbursed in time the costs of seeds increased as a result of inflation
and seeds were provided too late for planting. In a number of instances prices for
agricultural output rose slower than inputs, reducing farmers’ purchasing power (see
Section 4 “Coping with Price Volatility”).