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5. Rising Prices, Poverty
Reduction and Relevant
Policies
5.1 Poverty Reduction
The “double-edged price” effect, unsecured jobs, unfavourable weather conditions, disease and land
infertility make the division between the poor and non-poor more fragile. The number of poor households
in terms of the ability to meet their basic needs may be increasing at the study sites.
Poverty: rising rather than falling
The poverty rate in Xy commune, Huong Hoa district, Quang Tri, fell from 70 percent at the end of
2006 to 53.4 percent at the end of 2007. According to the commune leaders “this was because the
output of cassava crops increased sharply and people were hired to transport wood from Laos. At the
end of 2007 when the price of rice was lower, people in the commune purchased TVs and motorbikes.
However, towards the end of this year, 2008, the poverty rate may be increasing rather than falling as
there is no more extra land for cassava cropping. There is still some in the former villages. However
there is no road access for vehicles. Productivity is also declining because of deteriorating soil conditions
and wood exploitation from forests in Laos is no longer allowed”. Prices continue to rise.
The Thai village of Pa Dong is considered one of the poorest villages in Thanh Xuong commune, Đien
Bien. The village head noted “Paddy land allocated to this village is very limited (only 500 m 2 /head on
average). Households who failed to repay loans to the Cooperative only got 200-400 m 2 /head. During
the dry season there is often water supply shortage (even the fish ponds dry up) so we can only grow
one single upland paddy crop per year. Only a few households have forest land. There are no crafts
available locally so people seek work elsewhere. Drug use is still a problem and meant the village was
not recognized as a “cultural village” (two people died of HIV/AIDS in 2007 and five more died in the
last six months of 2008). That’s not to mention the district town development project that has been
pending for the last three years now. In order to survive each household needs at least 700m 2 of farm
land. As prices continue to rise I believe the poverty rate will increase rather than fall. The number of
poor households in Pa Dong village has actually risen from 27/72 at the end of 2007 to 35/77 as of
mid 2008 (including six new poor households and two who have fallen back into poverty)”.
Of the 2,896 households in Lam Ha ward, Kien An district, Hai Phong only 25 are officially recognized
as “poor”. However the real figure must be much higher given that most have moved from city centres
or other suburban districts in order to move from farm work to small jobs such as construction workers
or cyclo drivers and because land in this ward is still rather cheap to buy. According to the ward
management, 50 percent of households do not have permanent residence (classified as KT3 and KT4
households). The actual number of poor households at present must be approximately 200-400,
including new residents and those whose land has been recalled for industrial development (with
compensation of 20-30 million VND for each 4-5 sao).
The existing criteria for identifying poor households appear to be no longer appropriate. At the study sites
both the local residents and the grassroots cadres feel the current poverty rate is too low when increases in
the cost of living are considered. The nominal reduction of the poverty rate according to the existing poverty
line simple indicates which households “are removed from the list of poor households” but does not say
anything about “whether their quality of life has been improved or not”.
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