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.