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HA NOI — There is a clear income gap between the rich and the poor in rural areas at a time when access to agricultural input materials and markets are plagued with difficulties.
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Deputy head of the Ministry of Planning and Investment's Central Institute for Economic Management (CIEM) Vu Xuan Nguyet Hong made the statement at a conference held to discuss the outcomes of the "Characteristics of the Vietnamese Rural Economy: Evidence from a 2010 Rural Household Survey in 12 Vietnamese Provinces" held in Ha Noi yesterday.
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Hong said that the survey indicated rural residents were suffering from difficulties even though their incomes and living conditions had sharply improved.

"It means that policymakers should continue to implement support policies to benefit rural residents, " she said.

She added the policies should help rural residents participate in the market and further develop agricultural production.
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"The Government should provide access to information for people who have difficulty accessing input materials for production, " she said.

Professor Finn Tarp from Denmark's Copenhagen University said the Vietnamese economy had improved and progress had been made.

"Viet Nam has the ability to face various crises. However, some people, especially those in rural areas, have not managed to respond well to the crisis or increase their incomes, " Tarp said.

He added that agricultural production should be increased but its proportion in the economy should be smaller.

"Media plays an important role in rural development because we can see from the survey that a lack of information is a challenge. To make the right decision about what to do you need to know about prices and markets, " he said.
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Findings from the survey show that the proportion of households classified as poor by the Ministry of Labour, Invalids and Social Affairs has declined significantly over the years of the survey, suggesting that conditions have improved for the surveyed households.

"This [the number of poor households] declined from 23 per cent in 2006 to 16 per cent last year, " said head of CIEM's Rural Development Policies Section Luu Duc Khai, adding that there had been a downward trend in poverty in nearly all the provinces with the exception of Dien Bien, Khanh Hoa and Long An.

He said it was clear that some provinces and groups remained more vulnerable than others. Large discrepancies in education by gender and poverty status had been noted while improvements in living conditions in terms of access to safe water and energy usage had been observed.

"The impact of migration on rural communities and on migrants should also be researched, " he said.

The survey also show that the surveyed households experienced a significant increase in average annual income levels between 2008 and 2010.

"Agriculture remained the most important source of employment and income but poor households diversified their income sources to a greater extent than wealthier households, preventing them from enjoying gains from specialisation, " he said.
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The average annual household income last year was VND80. 9 million (US$3, 950) while in 2008 the number was VND52. 7 million ($2, 570). About 28 per cent of the surveyed households operated a non-farm household enterprise which were mostly small and required only modest amounts of start-up capital.

Household enterprises have become more common among rural households with the exception of former Ha Tay, Khanh Hoa, Lam Dong and Long An provinces.

The survey found that there was a growing trend in the proportion of rice output that was sold. The commercialisation of agriculture could be an important mechanism for rural households to break out of poverty.

Khai said savings and credit had also been important mechanisms for coping with unexpected income losses

"We find that households were better able to cope in 2010 compared with 2008 but the poor remained the most vulnerable group. It was suggested that financial markets were better able to assist households in coping with shocks, in particular credit and insurance markets, but the informal sector played an important role with informal savings, " he said.

Danish Ambassador to Viet Nam John Nielsen said agriculture accounted for two-thirds of the country's exports with an annual growth rate of 4 per cent.

However, he said the poverty rate in rural areas was high. The survey was expected to provide data for policymakers to develop measures for rural people to improve their lives.
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Hong said the Government should develop policies to support farming households in establishing large-scale enterprises as well as services to gather them into bigger productions.

"The best way to make the improvements is to accelerate production infrastructure to help farmers benefit from commercialisation in relation to supply and demand, " said director of the Institute of Policy and Strategy for Agriculture and Rural Development's (IPSARD) Agriculture Policies Advisory Centre Nguyen Do Anh Tuan.

The survey, which was first conducted in 2002, builds on the three previous surveys and provides an insightful overview of the surveyed households over a long period.