VietNamNet Bridge - In the current period, the Party and State are focusing efforts on the issue of restructuring the economy, renovating the growth model, and institutional reform. The Fourth Conference of the Party Central Committee recently adopted Resolution No. 05-NQ/TW on a number of significant guidelines and policies in order to continue renovating the growth model, improving the quality of growth and labor productivity and the competitiveness of the economy.

The National Assembly recently discussed economic restructuring with the necessary funds estimated by the Ministry of Planning and Investment up to VND10 million of billion, which will be used to restructure many areas such as commercial banks, state owned businesses, human resources training, etc. The National Assembly also discussed the restructuring of agriculture and the construction of the new rural areas.

In fact, the favorite terms in Vietnam today are restructuring, which sound magnificent. The story becomes complicated and there must be a lot of money to rebuild the structure.

Going in this direction, we should remember the story of the Ministry of Education and Training, which initially proposed a draft scheme on renovating textbooks for general schools with the estimated cost of up to VND70 trillion in mid-2011, then fell to over VND34 trillion in April 2014. Looking at this scheme, everyone would see that the center of comprehensive education reform is not the people, but money.

VietNamNet would like to introduce three articles by Prof., PhD Dang Hung Vo about this issue.

Looking back at history

The Party decided to implement “Doi Moi” (renovation) in 1986, also started from the fact that our agriculture was very weak. At that time, Vietnam was an agricultural country but it was in serious shortage of food.

The success of renovation proceeded from the land policy: allocating land of agricultural cooperatives to farmers for long-term use. This policy has brought Vietnam from a food-deficit country to a a world-leading rice exporting nation. The cooperative-based economy was replaced by the household-based economy.

In fact, before 1986, in most provinces in the country, the output of agricultural products harvested from the land allocated to farmers by cooperative farms (accounting only 5% of the total agricultural land) was higher than the total output harvested from the 95% of land held by cooperatives. That situation was the basis for the Party to make the decision of allocating land of cooperatives to farmers.

A suitable land policy was what led to the miracle for Vietnam's agricultural economy and the huge success of renovation and build the trust of people in renovation. At that time, people did not talk about money for renovation of agriculture, just about renovation thinking and policy renovation that put the farmers at the center.

Reviewing the renovation of the agricultural economy, many theorists have agreed that: the high-grade relations of cooperatives were inconsistent with the nature and level of the small production forces of Vietnamese farmers, inconsistent with the cooperative production relations, so it must be changed to household production relations. The comment was in line with the basic rule that Marx pointed out in his economic - politics theory. Of course, that statement is absolutely correct in a general perspective.

The situation at high-level cooperatives at that time can be described by two folk verses that were very popular in the countryside: "Nông dân làm việc bằng hai/Để cho cán bộ mua đài, mua xe" (Farmers work hard to enrich officials"). The verses reflect the serious corruption at cooperatives at that time. Farmers did not want to work for cooperatives, but only sought ways to take care of their land, which accounted for just 5% of the total agricultural land. In other words, at that time there was no measure to eliminate corruption in high-level cooperatives, which cooperative members had no right to monitor.

The story today

Renovation started in 1986, and in 1990, Vietnam became the third largest rice exporter in the world, and today it is among the group of leading agricultural exporting countries, with not only rice but also coffee, cashew nuts, pepper, shrimp, fish, and more.

The motivation from the policy of allocating agricultural land of cooperatives to farmer households has created success of renovation. This motive-force expires when farmers cannot enhance the quality of agricultural products, increase productivity and output on their own fragmented plots of land. Moreover, it is very hard for them to have access to bank loans while they are allowed to use agricultural land for only 50 years and the area of agricultural land for each farmer is also restricted. These factors have hindered Vietnamese farmers from becoming and thinking like professional farmers.

They only care for the short-term benefits. They don’t dare accumulate more land or invest in infrastructure and technology because they don’t know whether their land will be revoked tomorrow or not.

The current situation of the agricultural economy in our country is like a country with average income, which makes it more difficult to become a high-income country.

To become a large-scale agricultural economy, it is necessary to create new impetus for development. This new driving force is in the three following points: a land policy that enables accumulation of agricultural land for long-term use; a policy that helps farmers approach loans for development of modern infrastructure and application of modern equipment; and a policy for technological development that allows farmers to apply new technologies, mainly biotechnology and information technology.

Of these policies, the land policy has a direct impact on the farmers, while the two other policies are still unfamiliar in the existing knowledge of Vietnamese farmers. In other words, farmers can make good use of the advantages of the land policy, but they are not used to using large investments and do not know much about new technology.

To connect these policies, experts say the link between strong businesses and farmers play a decisive role. The new impetus lies in the link of the three policies.

To create this new momentum, the link between strong businesses and the community of farmers is a must. Farmers have land while businesses have capital and technological capabilities. Farmers benefit from agricultural products while businesses benefit from providing services to create added value for agricultural products. All of them are satisfied about the benefits they obtain if the benefit sharing mechanism is fair and transparent. That is the foundation of sustainable linkages.

In addition to links between enterprises and farmers, other models have also been considered for application; for example, a new type of cooperative. However, in the later model, cooperatives only play the role of service providers like enterprises, while farmers still cultivate their land plots in accordance with a uniform process.

The cooperative model has been successful in some areas, but this model does have a chance to be expanded. The model of a private farm economy, which is totally invested in by farmer households has formed in some localities, but these farmers have knowledge and broad relationships. It is difficult to develop this model as most farmers fail to meet these high requirements.

Thus, the model with the link between businesses and farmers is the one that is most capable of development in the current period.

Prof. Dr. Dang Hung Vo