Untitled - Oxfam Blogs

Executive Summary
1. Between May and August 2008, Oxfam and ActionAid Viet Nam in conjunction with local partner
institutions conducted a joint study on the impacts of price hikes on the life and livelihoods of the
poor in selected communities in the three provinces of Dien Bien, Dak Lak and Quang Tri and
two major cities of Hai Phong and Ho Chi Minh City. The study is a thematic study within the
framework of the “Participatory poverty monitoring in selected communities in the context of WTO
accession” initiative implemented by Oxfam, ActionAid Viet Nam and local partner institutions between
2007 and 2011.
Overview
2. High inflation is currently a great challenge that Viet Nam is facing following its accession to the WTO.
During the time of the study, between June 2007 to June 2008 price hikes were highest amongst food
products. Viet Nam is a surplus producer of rice and in general terms may benefit from the rise
in rice prices in the world market. However, the impact varies between household groups. As the
price of rice increases net rice sellers will benefit and net rice buyers will be worse off. It is therefore
important to consider both net rice sellers and buyers, especially among poor households when
discussing the production, distribution and export of rice products.
3. VHLSS 2006 data show that 60 percent of poor people (as per expenditure poverty line, including
expenditure for food intake of 2100 calories/person/day and expenditure for essential non-food items)
are net food sellers compared to 41 percent of the non-poor. On average a poor household earns a net
value of VND two million from selling food, less than the VND 3.7 million earned by the average nonpoor
household. Therefore a rise in food prices will benefit a greater proportion of the poor than
the non-poor. However in terms of absolute value and share of expenditures on food, the food
price hike will benefit the non-poor more than the poor.
4. Thirty percent of households – including 34 percent of poor households and 29 percent of non-poor
households - are net rice sellers. The average poor household sells 61 kg of rice while the average nonpoor
household sells 496 kg – or eight times more. Therefore, poor households who are net rice
sellers benefit less than their non-poor equivalents from increasing rice prices.
5. Fifty-five percent of rural households and 92 percent of urban households are net rice buyers. 53% of
the poorest quintile are net rice buyers. Thus a rise in the rice price will have an adverse impact on the
majority of households in Viet Nam, particularly urban households. Rice is most important to the
poorest quintile of the population as rice provides 78 percent of their daily food intake and
constitutes nearly 50 percent of the total food expenditure of this group.
Findings at the Study Sites
6. The “double-edged price” effect (a higher increase in the price of inputs than the price of outputs) was most
evident between June 2007 and June 2008. The sale price of goods and labour (wages) increased at a
slower pace than the purchase price of materials, services and foods. The cost of low-end food products
consumed by poor households rose faster than high-end products consumed by better-off households.
Such a situation has had a negative impact on the poor and near-poor groups as they are at the
same time producers, labourers and consumers. Meanwhile the role of cooperatives and other forms of
farmers’ cooperation has been weak in supporting farmers’ access to input and output markets.
7. In rural areas the income per hectare for rice farmers in 2008 is about 30 percent higher than 2007,
while the income of producers of other types of commodities such as corn and coffee that require more
intensive use of fertilisers and out-sourced labour is 30-40 percent lower. The income of cassava farmers
7