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Fruits and Vegetables in Vietnam - International Food Policy ...

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clear how the plan will be implemented. Certa<strong>in</strong>ly, greater attention <strong>and</strong> <strong>in</strong>vestment <strong>in</strong> the<br />

fruit <strong>and</strong> vegetable sector is justified, <strong>and</strong> it is encourag<strong>in</strong>g that program has an explicit focus<br />

on exports. On the other h<strong>and</strong>, the program appears to have elements of top-down central<br />

plann<strong>in</strong>g, which are unlikely to succeed <strong>in</strong> the long run. If the fruit <strong>and</strong> vegetable program<br />

follows the pattern of other commodity campaigns, the national production target will be<br />

disaggregated to prov<strong>in</strong>cial targets. Prov<strong>in</strong>cial authorities will then implement the plan,<br />

persuad<strong>in</strong>g farmers to plant the new crop us<strong>in</strong>g various levers <strong>in</strong>clud<strong>in</strong>g l<strong>and</strong>-use regulations,<br />

subsidized loans, the provision of subsidized <strong>in</strong>puts, pressure from extension agents, <strong>and</strong> the<br />

promise of guaranteed prices to be paid by a prov<strong>in</strong>cial state-owned enterprise.<br />

To the extent that farmers feel obliged to comply with the fruit <strong>and</strong> vegetable<br />

promotion campaign, this system goes aga<strong>in</strong>st the basic pr<strong>in</strong>cipals of the doi moi reforms,<br />

which were to make the household the economic decision-mak<strong>in</strong>g unit. It would also go<br />

aga<strong>in</strong>st the lessons of agricultural development over the last 40 years, which <strong>in</strong>dicate that<br />

programs that dictate farmers’ decisions <strong>in</strong>variably <strong>in</strong>troduce <strong>in</strong>efficient production methods<br />

<strong>and</strong> reduce farm <strong>in</strong>come. The dramatic growth of the <strong>Vietnam</strong>ese agricultural sector s<strong>in</strong>ce<br />

1988 certa<strong>in</strong>ly confirm the pr<strong>in</strong>cipal that growth is stimulated by giv<strong>in</strong>g farmers decisionmak<strong>in</strong>g<br />

responsibility <strong>and</strong> allow<strong>in</strong>g them to capture the benefits (<strong>and</strong> losses) associated with<br />

those decisions.<br />

To the extent that farmers comply with fruit <strong>and</strong> vegetable targets because of the<br />

<strong>in</strong>centives provided, there is less chance that the household is be<strong>in</strong>g hurt, but one can still<br />

question the value of this use of public resources. If the subsidized prices of credit, <strong>in</strong>puts,<br />

<strong>and</strong> market<strong>in</strong>g are ma<strong>in</strong>ta<strong>in</strong>ed year after year (as <strong>in</strong> the case of sugarcane), then the<br />

government has created .a distorted <strong>and</strong> <strong>in</strong>efficient market, susta<strong>in</strong>ed only by public subsidies.<br />

The hope that subsidized production will become more efficient over time is, based on<br />

<strong>in</strong>ternational experience, not realistic. If the subsidies are withdrawn after a year or two, the<br />

damage is more limited, but farmers are likely to become disenchanted with such campaigns.<br />

Furthermore, the large organizational effort to manage the campaign uses the valuable time<br />

<strong>and</strong> skills of extension agents <strong>and</strong> local officials that could be better spent dissem<strong>in</strong>at<strong>in</strong>g<br />

improved technology, provid<strong>in</strong>g market <strong>in</strong>formation, controll<strong>in</strong>g plant diseases, <strong>and</strong><br />

improv<strong>in</strong>g market<strong>in</strong>g <strong>in</strong>frastructure..<br />

Rather than creat<strong>in</strong>g artificial price <strong>in</strong>centives for grow<strong>in</strong>g fruits <strong>and</strong> vegetables, the<br />

government should promote the sector by improv<strong>in</strong>g the public services <strong>and</strong> <strong>in</strong>stitutions that<br />

serve the sector. This strategy would <strong>in</strong>stead devote more resources to agricultural research,<br />

extensions, plant protection, market <strong>in</strong>formation, market<strong>in</strong>g <strong>in</strong>frastructure, a comprehensive<br />

SPS strategy, relaxation of l<strong>and</strong>-use regulations, <strong>and</strong> the removal of official <strong>and</strong> unofficial<br />

barriers to the movement of goods.<br />

Chapter 9. Conclusions <strong>and</strong> <strong>Policy</strong> Implications Page 9-17

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