A Dissertation Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Doctor of Technical Science, School of Environment, Resources and Development

Thesis (Ph.D.) - Asian Institute of Technology, 1994

For more than one decade, Vietnam has been implementing economic reforms to decollectivize her agricultural systems. As a consequence, the country attained self- sufficiency in rice production by 1989 and has become the third largest rice exporter in the world market. However, in analyzing Vietnam{u2019}s rice economy as well as agricultural sector, there arise certain important questions, particularly, whether Vietnam can sustain its status as a major rice exporter in the long run, and what comprehensive strategies are needed for further agricultural development to alleviate poverty in rural areas. Addressing these issues, (1) an overview of the rural society regarding different farmer groups and agro{u2014}econon1ic zones is given; (2) responses of farmers to the new environment of market systems are analyzed; and (3) policy implications for the agricultural sector with special emphasis on the rice economy are drawn. The study employed a survey of 201 farm households including high, medium and low{u2014}income ones in three selected districts representing one agro- ecological zone each, namely, the intensive, lowland and coastal zones of the Red River Delta, one of the two largest rice producing regions of Vietnam. Findings indicate that at present, the rural society is composed of three distinct groups of people including the wealthy, those with sufficient means and the indigent. The high-income farm households are characterized by diversified occupations and higher economic endowments than those of the medium and low{u2014}income ones, causing significant differences in efficiencies of resource use and household income. Having more employment opportunities and larger production capacity, the intensive and coastal zone farmers earned more income than the lowland ones. The degree of income disparity widened as the level of income increased. The widest disparity was in the coastal and the narrowest one in the lowland zone. In the new environment that is forming ever more vigorously during the transition to a market oriented economy, farmers have positive responses to improved incentives provided under the new government policies, in accordance with their economic endowments, accessibility of markets and local conditions. They also have a positive perception of a more liberalized policy framework for the further development of rural society. For the 19905, at least, Vietnam{u2019}s economy must continue being agriculture-driven, with the rice economy still playing a vital role in warranting national food security and generating export earnings. Prospects for the further development of the agricultural sector are heavily dependent on the continued success of the reforms. Evidence presented in this study shows that a continuation of the economic reform through comprehensive implementation of policy means concerning an open rural land market, more liberalized and efficient mechanisms for input and output markets, generation and adoption of quality oriented technologies for rice surplus producers and quantity oriented ones for rice deficit farmers, diversification of the rural economy according to regional comparative advantages, adequate "and {uFB02}exible credit supply, and development of rural infrastructure point into the direction of sustainable development in the agricultural sector as well as rural society.