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The Mekong Delta Needs a Strategic Shift toward Sustainability

April rice paddies in Vietnam’s Mekong Delta

The rice yielding Mekong Delta of Vietnam needs to be less yielding in rice to develop economically. In other words, over-reliance on a single crop is now viewed as a market risk. At least, this was the consensus reached at a recent Mekong Delta Development Conference held in Can Tho City under the chairmanship of Prime Minister Nguyen Xuan Phuc in September 2017. Upbeat notes were heard echoing from the conference, which was the largest of its kind ever held and appears to mark a dramatic pivot in the Delta’s development. One of the main take-aways from the conference was to shift agricultural production from traditional crops to technology-intensive farming.

Per capita income in the Vietnam’s Mekong Delta is much lower than other parts of Vietnam, but the people of the Delta are surrounded by a landscape of natural wealth. The Delta accounts for up to 90 percent of Vietnam’s rice exports—however, low educational levels, poor healthcare, and inadequate infrastructure continue to characterize the Delta despite the important role it plays as home to rice fields, lush orchards, and the biggest freshwater fish stock in the country.

This paradox supports the argument that the Mekong Delta is not on the right development path. Worse still, these problems are compounded by hydropower dams upstream, the increasing effects of climate change, and rising sea level which, in the worst-case scenario, threatens to submerge the entirety of the Delta.

However, reducing the role of rice in the local economy is an uphill task. The economy of the Mekong Delta has always been framed in terms of rice: its soil, its extensive network of canals branching from the Mekong River, and its climate all make it perfectly fit for growing rice. Families inhabiting the Delta have toiled on paddy fields for generations. Delta-wide rice output in recent years has regularly topped 25 million tons – well over half of what the whole country produces annually. As a result, both regional authorities and individual farmers’ mindsets are geared toward rice.

Given Vietnam’s history of food scarcity in the years following the US war in Vietnam, it is understandable that authorities obsess over rice output as an indicator for food security. Local authorities built an extensive dyke network to divert seasonal flood in order to support an additional third rice crop during Fall-Winter. This is despite the fact that years of evidence show that the profits from additional crops cannot make up for the costs of soil degradation, loss of fluvial nutrients, and depletion of fish stock associated with intensive rice-cropping.

Volatile markets, fierce competition, high logistical costs, and low prices—especially when Vietnam has been unable to compete with Thailand in the high-quality rice market— render rice a low-value commodity for export. In addition, the benefits are largely reaped by middlemen while farmers usually bear the brunt of loss when prices dip. After decades of contributing to the country’s standing in the world rice market, the biggest rice bowl provinces in the Delta are still lagging their neighbors in the north in terms of industrialization and foreign investments.

“Being the world’s number one or number two rice exporter is much more about empty reputation than substance,” Dr. Vo Tong Xuan, a noted agro-scientist in the Mekong Delta, said after attending the Mekong Development Conference in September 2017. “It’s no point to become a leader in rice exporting while farmers are still poor and rice-exporting businesses still incur losses.”

Despite the losses, farmers have found few incentives to turn away from rice. Since local officials are judged and considered for promotion based on rice output, they try their best to discourage farmers from converting to other crops.

But this is going to change, according to Dr. Xuan. During the conference, various government departments reached a consensus that farmers should be placed at the center of all development in the Mekong Delta. Instead of prioritizing rice output, the top objective of the government is now to help farmers get rich.

“[Places that meet] all the conditions for growing rice, we should keep doing that, but where rice farming is not economically viable, let’s try other industries,” he explained. “For instance, at salt-water coastal areas, farmers who alternate between rice crops and shrimp aquaculture can earn five times as much as those harvesting only rice.”

Ideally, the other industries should suit the Mekong Delta’s natural environment, create high economic value, and be more resilient to the impacts of climate change. A segment of the local population has already shifted to aquaculture, most notably shrimp and catfish. Prof Xuan recommended alternative crops like sugarcane or sorghum which are less water-intensive and could more easily be sustained during harsh dry seasons that now happen more frequently in the Delta.

The shift in crops must also be accompanied by a reorganization of the supply chain to better link farmers with businesses. Doing so would save farmers from having to navigate the global market by themselves and insulate them from volatility of the market. Larger businesses would also be better situated to organize mass production and work with scientists to make sure that produce meets the high standards of the international marketplace. In fact, linkages have already been established at some locations in the Delta:  many farmers in An Giang Province practice contract farming, growing a special strain of Japanese rice specifically to export to Japan. Participating farmers are ensured a fixed buying price at the start of the crop cycle, no matter how much the market fluctuates. This allows them to focus on farming without having to worry about going bankrupt. The challenge now is to learn from these examples and expand that to farmers elsewhere in the Delta.

The conference consensus is an important breakthrough. A next step will be translating the consensus from the strategic level to affect actual practices by farmers. A key signal of progress will be whether the local government steps in to encourage farmers to diversify crops and to facilitate linkage between farmers and businesses.  The benefits of doing so are widespread, as shifting to less water-intensive or salinity-resistant crops will also help reduce the local economy’s exposure to climate change and rising sea-levels. As it gets richer, the Delta will be in a better position and have more resources to battle climate change and rising sea level.

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Filed under Environment and sustainability, FEATURES, Mekong River, SLIDER, Sustainability and Resource Management, Vietnam, water

Bottlenecks to Development: Challenges in the Mekong Delta

Last week, ExSE took a hard look at the environmental challenges facing the Mekong Delta region and found that the prospects are not good. Due to unenviable geography and global warming, rising sea levels, higher average temperatures and irregular precipitation patterns will all converge in the next 50 years to change the face of the Mekong Delta (MKD). That’s to say nothing of salinity intrusion, flooding and tropical storms. However, the MKD’s problems are not only environmental in nature; the region’s economy also faces a host of challenges, many of them tied to the Delta’s environmental changes.

Issues in the Mekong Delta are of course significant for its residents, but they also carry great importance for those outside the region because of the MKD’s role in national and regional food security. The statistics on the Delta are incredible. In an area taking up just 36,000 square kilometers (12 % of Vietnam’s total area), the Delta’s 22 million inhabitants plant 2.6 rice crops per year totaling 25 million tons of rice. The MKD’s rice production accounts for over half of Vietnam’s total and the seven million tons rice that the Delta exports has helped Vietnam become the world’s second largest rice exporter after Thailand. In addition, the Delta accounts for 70% of Vietnam’s fruit production and three-quarters of its fish catch.

The Delta’s massive agricultural output is no accident. The region is perfectly situated to receive large amounts of water and sediment from the three main stems of the Mekong Delta and the many thousands of canals that intersect them and a tropical temperature allows for farming year-round. What’s more, concerted efforts in the past 30 years to improve the region’s water infrastructure have doubled arable land in the MKD. Combined with advances in genetically modified rice strains, yields in the Delta have increased by 30% and total production has doubled, all within the past 20 years.

Incomes have also increased. According to the General Statistics Office of Vietnam (GSO), the average income of Delta residents has gone from 50 cents USD/day in 1999 to $2/day in 2010 and the region reached it Millennium Development Goals in 2006. However, despite impressive improvements in agricultural output and per capita income, the Delta has lost ground to other regions of Vietnam and now lags behind in important measurements of human and economic development.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

In the late 1990’s, the Delta was actually 20% above the national average in per capita income. However more than 10 years later, the number stands at a little more than 80%. In the first decade of the new millennium, Vietnam underwent a period of intense economic growth through industrialization and people all over the country got richer as a result. The benefits of economic growth were not felt equally by everyone, however. Due to development bottlenecks, some regions, including the Mekong Delta, did not industrialize like others

One of these bottlenecks is a lack of infrastructure. The proportion of waterways, intra-provincial roads and inter-provincial roads per thousand people are all behind the national average. Of these three measures, the proportion of inter-provincial roads stands out. For one, there are only 0.34km of them per 1000 people in the Delta, standing at only half of the national average. This is especially important because of the nature of the Delta’s economy. The MKD, because its economy is so heavily concentrated in agriculture, lacks many necessary products and thus has a long history of importing and exporting nearly everything. While this may be good for enterprising middlemen, it is not good for the region’s economic development. With so few avenues for importing and exporting goods, the logisitical cost rises and because the MKD lacks so many raw materials, industrial development becomes disadvantageous. In fact, unless an investor is interested in agricultural processing, building a factory closer to Ho Chi Minh City is probably a better business plan in many cases.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Measure of waterway, inter-provincial roads and intra-provincial roads in the Delta. Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

A second bottleneck, and another reason a potential investor might not consider the Delta, is a lack of skilled labor. Like the region’s road density, the MKD’s percentage of trained labor lags behind the national average; according to data collected by GSO (General Statistics Office of Vietnam) the Delta’s percentage of trained labor stood at just over half of the national average. In addition, the proportion of Delta residents with some sort of higher education stood at less than 1%, or in other words, just a fifth of the national average. With a workforce that is so poorly trained and educated, the Delta becomes an even less attractive region for investment, especially when compared to the populations near the Red River Delta (Hanoi and its environs) or Ho Chi Minh City.

What’s more, those Delta residents that have some technical training and/or higher education do not stay in the Delta for long. As the region’s economy falls farther behind the rest of Vietnam, more and more Delta residents are moving to urban centers to look for work. One of the main destinations for these people is Ho Chi Minh City, where over half of the city’s migrant workers come from the Mekong Delta. What trained labor the MKD might have ends up leaving the region for greener pastures, thus widening the gap between the Delta and places like Ho Chi Minh City.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

One reason that the MKD has such a low percentages of trained labor and educated inhabitants is that in the past there was no need for supplementary education of any form. In an environment where the annual rice yields are stable and prices are good enough, investing time and money for a new career is an unnecessary risk and one that Delta residents have not taken. Paddy rice cultivation requires little technical skill yet provides a modest, usually stable income. However, the income provided from rice is rarely enough to invest in the expansion of other industries and in the Delta’s case, the lack of infrastructure makes such an investment an even more expensive proposition.Unfortunately for the farmers of the Mekong Delta, rice cultivation is becoming a less and less stable enterprise. For one, the price of rice has dropped in the past decade. As more and more rice is produced worldwide, the seven tons of rice the Delta exports annually decreases in value and farmers lose out.

However, shifts in the world rice market are nothing compared to problems farmers face due to global warming. As detailed here, rising temperatures, sea level rise, an erratic precipitation and flood schedule and more frequent tropical storms all threaten to radically alter the Mekong Delta in the next century. The region already has enough impediments to development with its lack of infrastructure and trained labor; its environmental issues only add to the severity of the situation. The Delta, now more than ever, is in acute need of solutions. However, who’s coming up with these solutions, if there are any to begin with, is another question unto itself and one that needs to be answered before any future for the Mekong Delta can be imagined.

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Filed under Agriculture, Economic development, Environment and sustainability, Mekong River, SLIDER, Sustainability and Resource Management, Vietnam

A Flood of Challenges: Climate Change and the Mekong Delta

As loyal readers of ExSE have probably noticed by now, this site, at its core, is dedicated to Mekong River and the people who are connected to it. Thus it seems odd that so little attention has been given to the Mekong Delta on ExSE. As is the case with most international coverage of the Mekong, the upper and lower reaches of the river are largely ignored in favor of stories about hydropower projects and the livelihoods they will affect. However, the challenges that the Mekong Delta (MKD) is currently facing and will face in the future are also serious. These challenges are directly related to global warming and are shared with other deltas, though the unique geography and ecology of the Mekong makes the consequences of climate change here even graver. Continue reading

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Filed under Agriculture, Environment and sustainability, Mekong River, SLIDER, Sustainability and Resource Management, Vietnam, water