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SAP 2.74/WP.128
Agrarian transition in Viet Nam
Agrarian reforms in Viet Nam have come in fits and starts and with many roundabouts. After the victory over the French and the division of the country, North Viet Nam embarked on a radical land reform programme from 1953 to 1955. The two targets were the landlords, who, although under 3 per cent of the population, had owned over one-half of the land, and French-owned plantations (Phan Xuan Nam, Be Viet-Dang and Hainsworth, 1997). Over 800,000 hectares of land were taken in this way and turned over to 2 million households. Output increased to 367 kg of paddy-equivalent per capita in 1959 compared to 278 in 1955 (GSO, 1960). However, despite this success, a programme of collectivization was imposed in the north between 1959 and 1960, bringing 85 per cent of all peasant households and 68 per cent of total farm land into "low-grade" cooperatives. When output fell (to 293 kg per capita) the reason was thought to be that the collectives were still in a rudimentary stage and needed to be upgraded to the "high-grade" stage where all agricultural processes, from soil preparation to pest control, could be undertaken by specialist teams. Between 1961 and 1965, nearly three-quarters of households were brought under membership of such high-grade cooperatives. Efficiency levels declined further but the cooperatives nevertheless made an important contribution to the war effort against the United States (1966-75), and, based on this, in the 1976-80 Five-Year Plan a campaign was launched to increase the size of the northern cooperatives and to impose the cooperative model in the south. By late 1979, 1,286 cooperatives and 15,309 production groups had been established in the south encompassing half of all peasant households. One year later most of these cooperatives had disintegrated. The dissipation of nationalistic feeling with the end of the war contributed as well as the spread of cooperatives beyond the familiar village level (see Elson, 1997; Hy V. Luong, 1992; and Kerkvliet, 1995). The general demoralization -- in both the north and the south -- resulted in per capita food production falling to its lowest level ever in 1980 (215 kg per capita), requiring the importation of over 1 million tons of food. At this time peasants also began to question the lack of correlation between effort and reward, partly due to the growing proportion of output that was being withheld to support the cooperative cadre. The result was a neglect of communal lands, animals, and tools and a general minimization of collective work in favour of household plots. Estimates suggest that household activities generated 40-60 per cent of all output and 60-70 per cent of household income around this time (Dao The Tuan, 1995, p. 156). The cooperatives then began to negotiate with members to fulfil the production targets and the latter responded by asking for increased resources for their private use (Fforde, 1990). Land cultivated by individual households began to increase beyond the 5 per cent norm; the actual share of land used for household production was estimated at between 7 and 13 per cent (Kerkvliet, 1995, p. 69).
Part of the post-reunification collectivization drive also targeted the south, but there was even stronger resistance here and success was limited, particularly in the Mekong Delta where in 1986 less than 6 per cent of the farmers had joined (Vo Tong Xuan, 1995, p. 187). However, although production continued to be done on a household basis, tractors, pumps, and draft animals were collectivized. The assumption of formal land ownership by the State reduced the security of tenure.
Stagnating output in the late 1970s set the scene for the first round of agrarian reforms. Decree No. 100 of 1981 legalized practices that had already emerged informally (Dao The Tuan, 1997; Fforde and De Vylder, 1996), reconstituting the household, rather than the cooperatives, as the main economic unit. Cooperative land was allocated to households which signed a contract to deliver a set amount of output at fixed prices. Any surplus could be freely disposed of by the household for its own use or for sale to private traders. The cooperatives remained responsible for tasks such as ploughing, irrigation and marketing, and for the supply of seeds, fertilizers and pesticides. As part of the reforms the purchasing price of paddy was increased but so was the price of inputs. In fact the relative price of fertilizer, petrol and tractors increased with respect to paddy (Nguyen Thi Song An, 1996).
Despite the adverse price trends, the core reforms gave farming households the incentives that had been lacking under the cooperative system and output responded correspondingly, with most households finding themselves easily in a position to surpass the quota (Nguyen Sinh Cuc, 1995). Paddy output, which had stagnated between 1976 and 1980, jumped by over a third between 1980 and 1986, but by the latter year growth slowed down and in 1987 food output per capita actually fell and parts of Viet Nam suffered a famine. The weather played a role but so did problems inherent in the production system. A long list has been identified (see, for example, Vo-Ton Xuan, 1995; Hy V. Luong, 1992; Nguyen Sinh Cuc, 1995), the distribution of tasks between households and cooperatives being at the core. Cooperatives still effectively controlled production, along with input supply and crucial tasks such as irrigation. Their decisions about the crop mix did not always conform to local conditions, inputs distribution was unreliable, and common tasks such as land preparation and water management which were paid on the basis of piecework were often sloppily done, with little consideration for quality or yield. Although more and more land was allocated to households, it did not belong to them and without security of tenure farmers remained reluctant to invest in land improvement. Production quotas regularly raised to pay for salaries of the cadres too discouraged households from "over-producing" to avoid the spiral of increased quotas. The reduction in work points to be paid for common tasks did little to improve the efficiency with which these tasks were done. Reports also began to accumulate of delayed purchase of crops by the cooperatives. On the macro front, the instability in the period 1986-88 was contributing to the erosion of farming incomes.
By 1988 it was clear that, while Decree No. 100 had shifted production responsibility to households, practical constraints prevented the latter from working efficiently. Decree No. 10 of 1988 and a set of subsequent decisions addressed these problems. The security of tenure was increased, with households receiving 10 to 15-year leases for their land. The contract system was abolished (1989), all price controls were lifted, and internal and external trade liberalized. In 1993 a new Land Law further extended the lease period and recognized the households' right to sell, lease and inherit land or use it as collateral. Private ownership of animals, equipment and agricultural machinery and the right to sell and buy them freely was recognized. Cooperatives sold their buffalos and other assets to members. The responsibilities of cooperatives were reduced to water management mainly. Implementation of the land decree was slow; by the beginning of 1995 only 31 per cent of households had been granted formal rights (Nguyen Sinh Cuc, 1995, p. 117). But with these measures agriculture was basically privatized and cooperatives became marginal institutions. The sharp fall in inflation in 1989 and the devaluation of the dong, which improved prices for agricultural exports, provided further incentives for production increases which indeed followed. Paddy output, which had fallen in 1987, increased by nearly 50 per cent between 1988 and 1995. New crops were introduced, multiple cropping spread, and usage of new seeds increased.