Farmers struggle against “shocks”

VietNamNet Bridge – The panorama of agriculture and the rural is grey and bleak. Farmers have to “tighten their belts” because their income is decreasing since they suffer more “shocks” from natural disasters, epidemics and market fluctuations.

How to make the rural picture brighter, to help farmers overcome the “shocks” and escape poverty was the hot topics at the recent conference on agriculture and rural Vietnam in Hanoi.

Farmer’s income gradually reduces


According to the survey of the Institute of Policy and Strategy for Agricultural Research and Development (IPSARD), conducted between 2006 -2012 in 12 provinces across the country, the income and expenditure of rural households increased sharply, reaching VND13 million ($800)/ person in 2010 but then it reduced to VND12.7 million/person in 2012. The poverty rate did not decrease. The rate of households that felt into poverty again rose.

Income from agriculture is declining because farmers are suffering the shocks from natural disasters, epidemics, market volatility … besides subjective reasons such as health status, loss of land…

Mr. Nguyen Anh Tuan, Director of the Center for Policy Advisory, said the “shocks” that farmers are suffering from are diverse, from natural disasters to epidemics, market fluctuations, illness, the death of family members, losing their jobs and their land and the burden from fees… On average, each “shock” causes damage of VND15-20 million/household/year.

Whenever farmers meet distress, they have to use the accumulated funds, sell assets and withdraw the savings account. “In fact, the average cumulative amount of rural households now is only VND5-8 million per year, sometimes the savings is not enough for one time of treatment at the hospital so they have to borrow from relatives and friends. Therefore, up to 45 percent of rural households said they are in debt,” Tuan said.

Meanwhile, government support for farmers is very limited. Insurance is the best way to respond to the “bad luck” but most of the farmers do not buy insurance, especially agricultural insurance, Tuan added.

To cope with these shocks, farmers have to cut spending. This ratio accounts for 61 percent in the poorest group and 43.7 percent for the richest group. Selling land, seeking loans, enlisting the help of relatives, friends … are the solutions for farmers against shocks.

Because of poverty, the sums annual accumulated money of rural household is very low, only about VND5-8 million ($250-400)/ household/ year, accounting for 10-15 percent of household income, for the use in case of risk natural disasters, epidemics, sickness or old age. Only 15 percent of the savings is used for investment.

Notably, the level of difficulty is increasing for the rural poor. Over 50 percent of surveyed households have debt, mainly individual debts, bank loans accounting for over 13 percent only. It is said that formal credit does not help much for the rural households to solve their problems.

Mr. Dang Kim Son, Director of the Institute of Policy and Strategy for Agricultural Research and Development, said: “As time goes on, especially in the 2012 survey, the growth of farmers’ income increasingly reduced, particularly in the poorest group.”

A large proportion of farmers have to tighten their bell, cut down spending in life, especially ethnic minority groups. This fact shows that the effect of the state’s support policy is not high.

How to help farmers?

At the conference, many participants pointed out the limitations and shortcomings of the farmer supporting policies.

Mr. Nguyen Van Vy, Deputy Chairman of the Farmers’ Association of Soc Son District, Hanoi, said the State has a lot of policies but these policies must be concretized to be effective in fact.

Mr. Nguyen The Dung, representative from the World Bank suggested to clarify the support policy for 26 percent of households losing land in the study.

Dung said among the support policies for farmers, it is needed to clarify the policies that are active and those are inactive policy. “Without this clarification, it is possible to have overlapping policies, the policies to help the poor but finally they help the rich,” he added.

Expert Pham Quoc Doanh argued that the report of IPSARD pointed out a series of risks but it lacks the most important risk – the risks from policies. “For farmers, please do not sit in the air-conditioning offices to issue policies. Policy makers have to meet the people, listen to people’s opinions,” he said.

Bao Han