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Journal of Agrarian Change

The Journal of Agrarian Change is a journal of agrarian political economy. It promotes investigation of the social relations and dynamics of production, property and power in agrarian formations and their processes of change, both historical and contemporary. It encourages work within a broad interdisciplinary framework, informed by theory, and serves as a forum for serious comparative analysis and scholarly debate.

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Journal of

Agrarian Change Volume 5

Number 1

January 2005

Neil Davidson

The Scottish Path to Capitalist Agriculture 3: The Enlightenment as the Theory and Practice of Improvement

A. Haroon Akram-Lodhi

Vietnam’s Agriculture: Processes of Rich Peasant Accumulation and Mechanisms of Social Differentiation

Arthur E. Neiland, Sunday P. Madakan and Christophe Béné

Traditional Management Systems, Poverty and Change in the Arid Zone Fisheries of Northern Nigeria BOOK REVIEWS

Economic Development, Inequality, and War: Humanitarian Emergencies in Developing Countries, by E. Wayne Nafziger and Juha Auvinen Banana Wars. Power, Production and History in the Americas, edited by Steve Striffler and Mark Moberg

Henry Bernstein

Farmers and Markets in Tanzania: How Policy Reforms Affect Rural Livelihoods in Africa, by Stefano Ponte

Carlos Oya

Political Topographies of the African State: Territorial Authority and Institutional Choice, by Catherine Boone

Tom Young

ISSN 1471-0358 This journal is available online at Blackwell Synergy. Visit www.blackwellsynergy.com to search the articles and register for table of contents e-mail alerts.

Christopher Cramer

Journal Journal of Agrarian of Agrarian Change, Change, Vol. Vol. 4 No. 5 No. 1 and 1, January 2, January 2005, andpp. April 73–116. 2004, pp. 00–00. Vietnam’s

Agriculture 73

Vietnam’s Agriculture: Processes of Rich Peasant Accumulation and Mechanisms of Social Differentiation A. HAROON AKRAM-LODHI

Vietnam’s agrarian transition is reviewed and, against the World Bank view that land markets in Vietnam have been pro-poor, it is suggested that access to land has become stratified within specific provinces, districts and communes. Aggregate data and field research both demonstrate that the technical coefficients of production differ between farms when grouped according to a proxy for wealth, and that this is correlated with productivity per unit of land. It is therefore argued that there are emerging differences between farms that reflect divergence in the scale of production. At the same time, when grouped according to wealth there are differences between farms in terms of crop mix, the degree of market integration, and the extent of rural diversification. Holistic examination of the evidence suggests that Vietnam has an emergent group of rich peasants with relatively larger landholdings, amounts of capital stock, and use of hired labour-power; and higher yields per unit of land, a greater degree of market integration, and more marked productive diversification. This class can be set beside a numerically preponderant class of relatively small peasants, with smaller landholdings and amounts of capital, a heavier reliance on family labour, lower yields per unit of land, and less market integration and diversification. The evidence further demonstrates the rapid growth of a class of rural landless who are largely separated from the means of production, who survive by intermittently selling their labour, and who are the poorest segment of rural society. Keywords: Vietnam, agrarian transition, agrarian structure, peasant class differentiation, choice of technique, factor intensity, agricultural development

A. Haroon Akram-Lodhi, Rural Development, Environment and Population Studies, Institute of Social Studies, PO Box 29776, 2502 LT The Hague, The Netherlands. e-mail: [email protected] The research for this paper was carried out under the auspices of the Vietnamese–Dutch Project for MA Programme in Development Economics, located at the University of Economics, Ho Chi Minh City, and in conjunction with the Centre for the Study of Transition and Development at the Institute of Social Studies. The author would like to thank Nguyen Thi Song An, Karel Jansen, Adam McCarty, Ardeshir Sepehri, Tran Vo Hung Son, Max Spoor, Vieu Thieu, Róisín Akram-Lodhi, and the numerous students from whom I have learnt, in both southern and northern Vietnam. I would also like to thank Terry Byres for stewarding this paper over three years into its current form, and two very good, anonymous, referees of the Journal. © Blackwell Publishing Ltd, Henry Bernstein and Terence J. Byres 2005.

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74 A. Haroon Akram-Lodhi INTRODUCTION Following a series of piecemeal agrarian reforms in the early and mid 1980s in 1988 Vietnam fundamentally reconfigured rural society by formally decollectivizing agriculture and in so doing re-establishing peasant family farming as the dominant mode of economic organization in the countryside. Thus, the management of land that had been under the control of co-operatives was contracted out to farm households, in the first instance for 15 years for annual crops and 40 years for perennial crops. Although the terms of land allocation varied across Vietnam, in most instances it was allocated on the basis of the size of the family and, as a consequence, in less than a year a relatively egalitarian distribution of land was introduced across the country as peasant family farming emerged from within central planning. Concurrently, while co-operatives retained formal ownership of capital stock, working capital and other means of production, they were obliged to rent it out to farm households. Moreover, farm households were allowed to buy their own capital stock and working capital irrespective of the supply available from the co-operative. They could thus buy and sell animals, equipment and machinery. All told, the relationship of peasants to the principal means of agrarian production was fundamentally transformed by decollectivization.1 As Watts (1998, 483) has argued, the social relations of production that emerged from decollectivization resembled those of a ‘modified Chayanovian (household demographic composition)’ type. In so proceeding, the Vietnamese state appeared to pursue an egalitarian redistributive land reform of the kind advocated by Griffin, Khan and Ickowitz (hereafter GKI) in their article in this journal (2002). GKI, indeed, discuss the Vietnamese experience favourably, if briefly (2002, 313). In the subsequent double special issue of JAC devoted to considering critically the GKI logic and case studies (Byres 2004a, 2004b), Vietnam is not discussed. The present article was intended to stand alone, but may also be seen as a contribution to that debate on Redistributive Land Reform Today. The social relations of production in the Vietnamese countryside, in fact, I argue here, did not retain their Chayanovian, or GKI, flavour. This article suggests that the transformation of the relationship of peasant farm households to the means of production facilitated a dynamic reconfiguration of the rural labour process within and between rural households. Shaped by the interlocking of only partially complete land, labour, capital and credit markets, shifts in the choice of technique and consequently factor intensity both facilitated and influenced the emergence of differentiated access to capital, technology and labour-power, and thus a process of peasant class differentiation amongst farm households. With peasant class differentiation exploitative relationships developed between 1

It is of more than passing interest to note that Truong Chinh, who wrote on Vietnam’s ‘peasant question’ in the 1930s, who was the architect of collectivization in the north of Vietnam in the 1950s, and who was an opponent of the ‘fence-breaking’ experiments of the 1970s, had, by 1986, come to support the shift to peasant family farming (Langguth 2000, 94–5; Fforde and de Vylder 1996, 165, fn 29).

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Vietnam’s Agriculture 75 an emergent class of relatively rich peasants, a numerically large stratum of more marginal small peasants and a rapidly growing class of landless rural wage labour. The rich peasants that have emerged have relatively larger farms, appear to pursue a technology that is more intensive in the use of hired labour-power and capital equipment, and market a larger share of their production, which can be in higher-value added perennial crops. These farms are, to a greater or lesser extent, more productive, in terms of yields per unit of land; farm productivity has thus become linked to the scale of production as accumulation has proceeded in rural Vietnam. This stratum can be set beside the small peasants that dominate Vietnamese agriculture, and which have relatively smaller farms, pursue more labour-intensive production techniques predicated upon the use of family labour, and which produce a larger share of their crop for their own use. Finally, there are the landless, a rapidly emerging class that, as a result of mechanisms of social differentiation, have become divorced from the means of production and who therefore are compelled to sell their labour-power in order to survive. Hence, the article argues that the process of agrarian transition in Vietnam has been shaped by the evolution of differences amongst farm households in their respective endowments of productive assets, by the emergence of exploitation, and by the establishment of particular agrarian class relationships. The article is structured as follows. Following this introduction, the second section (‘Conceptualizing “Transition” ’) briefly reviews the key theoretical parameters of agrarian political economy, and indicates the concepts that will be used in analysing processes of rich peasant accumulation and mechanisms of social differentiation in rural Vietnam. Thereafter, the third section (‘Agrarian Transition in Vietnam, 1975–2005’) examines the process of agrarian transition in Vietnam since the early 1980s, and documents how the agrarian structure, the technical coefficients of production, and hence the rural labour process, have been reconfigured. The outcome of this process on production and productivity, and thus on accumulation, is also discussed. The fourth section (‘Accumulation and Differentiation: Four Case Studies) provides field-level evidence from four surveys that complements the findings of the preceding section. These data reinforce the suggestion that there are differences between farms in their technical coefficients of production, in their purpose of production and in their productivity. Together, the third and fourth sections suggest that a small stratum of relatively richer peasants has emerged in rural Vietnam and that this stratum can be set beside the small peasants and the landless that dominate the Vietnamese countryside: agrarian classes differ in terms of their resource constraints, their productive purpose, and their pattern of accumulation. The final section offers some conclusions. CONCEPTUALIZING ‘TRANSITION’ Over the last 20 years the Vietnamese economy has shifted from operating within central planning to a market-led, state-regulated mode of production. This process is commonly described as a ‘transition’ from ‘socialism’ to ‘capitalism’.

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76 A. Haroon Akram-Lodhi A fundamental tenet of the analysis contained within this article is that understanding this process of ‘transition’ requires an understanding of the social relations that structure production prior to any exchange taking place. In this sense, then, this article is clearly located within a Marxist political economy approach. Within this approach, the social relations that structure production are a function of two mechanisms. The first is the private ownership of productive assets and, more precisely, an ongoing process of differentiation of asset ownership between those with relatively larger and those with relatively limited quantities of productive assets. The structure of asset ownership determines the capacity to control, and hence accumulate, resources. The second is the capacity to generate and control technical change, which is contingent upon differentiated control of productive assets and which allows those with assets to capture the benefits of technical change and thus enhance their dynamic productive efficiency. Within political economy, explorations of ‘transition’ are, of course, most fully developed in work that investigates the transition from pre-capitalist to capitalist agricultural production. Thus, within agrarian political economy the occurrence of ‘those changes in the countryside of a poor country necessary to the overall development of capitalism’ is defined as an ‘agrarian transition’ (Byres 1996, 27). In addition to the two general mechanism just noted, changes in three sets of accompanying social processes have been identified as being necessary if an agrarian transition is to succeed: production, accumulation and politics (AkramLodhi 1998; Bernstein 2004). Here the focus will be on the economic dimensions of transition, and thus politics will not be explored (but see Akram-Lodhi forthcoming). In terms of production, it is necessary for petty commodity-producing peasant labour to be commodified through processes that, as just noted, differentiate access to productive assets and in so doing restructure rural labour processes. The commodification of labour allows those with sufficient productive assets to change their purpose of production, towards exchange-oriented generalized commodity production. These changes in production in turn affect the capacity of agriculture to supply a net marketed surplus that has the potential to meet the resource needs of structural change, the ways by which such a surplus can be appropriated, and the ease with which such an appropriation may occur. Thus, obviously, changes in production affect accumulation. Although the issue will not be pursued below, changes in production and in accumulation have at the same time implications for rural politics, because the focus of rural politics for peasant households is usually around issues of production and accumulation. Thus, an agrarian transition requires that production and accumulation be transformed, and that political constraints to the structural transformation of agriculture be eradicated. In light of this discussion, agrarian political economy offers four ‘parameters of transition’. The first is the differentiation of land and non-land productive assets. The second, related, parameter is the extent to which there are changes in the organization of the production process, and in particular changes in the ways in which labour regimes (Bernstein et al. 1992) are constructed. The third is

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Vietnam’s Agriculture 77 technical change, which both reflects and affects the differentiation of assets and the organization of production, in that technical change facilitates structural shifts in dynamic productive efficiency. The fourth parameter is the process of accumulation unleashed by these changes in the production system. These parameters will be used to frame the analysis that follows. AGRARIAN TRANSITION IN VIETNAM, 1975–2005 Collectivization and Decollectivization Vietnam’s post-unification pre-reform agrarian structure was built upon an extensive collectivization campaign conducted in the north of Vietnam between 1958 and 1960 and in the south of Vietnam between 1976 and 1978. In 1979 the average size of a co-operative in the north of Vietnam was 202 hectares, on which an average of 378 households lived and worked (Que 1998). This average, however, masked wide variation: in some areas co-operatives were in excess of 1000 hectares. Almost 97 per cent of rural northern Vietnamese households belonged to the 4151 co-operatives that were in existence. In southern Vietnam, the situation was much different. In 1979 there were only 272 co-operatives, and in 1980 only 24.5 per cent of farm households belonged to a co-operative. This figure, however, concealed regional variations in the south. In the central coastal regions, by 1980 84 per cent of agricultural households had joined co-operatives, in which land, animals and other productive assets were collectively owned and basic production teams established to perform agricultural tasks. By way of contrast, by 1980 in the Mekong Delta only 1.7 per cent of farm households had joined co-operatives. Moreover, it would appear that some co-operatives listed as such in official reports did not exist in actuality, with farmers continuing to operate their own individual holdings under the guise of a notional ‘cooperative’ (Kerkvliet 1995, 69; Que 1998, 32). Those farms in the south of Vietnam that did not join co-operatives continued to work the household’s holding using predominantly family labour, as they had done before unification. However, the often coercive efforts by the state to force households into cooperatives resulted in petty commodity production becoming increasingly squeezed. As a consequence, an increasing amount of land was left fallow and many farm households ‘retreated’ into subsistence farming. In the latter half of the 1970s, when a collective agrarian structure was established in Vietnam, there was a precipitous decline in per capita foodgrain availability. This decline is illustrated in Figure 1. This occurred despite a sharp rise in foodgrain imports. Vietnam was facing an agrarian crisis, and the cause of the crisis was twofold (Akram-Lodhi 2001a). The first cause related to the incentive structure. As has been noted by Kerkvliet (1995, 68), there was ‘little or no incentive to work diligently nor disincentive to farm poorly’ in collective agriculture. The incentive structure resulted in low prices for farm output produced in excess of the quota, consumer subsidies that devalued the outcomes of collective labour and an overvalued exchange rate that encouraged imports

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78 A. Haroon Akram-Lodhi Figure 1 Per capita foodgrain availability, 1961–1997

Source: Author’s calculations from Food and Agriculture Organization (1999). Note: Production data were obtained from the Food and Agriculture Organization’s web site for the pre-1975 period and are for both the northern and the southern halves of Vietnam. This data appear to be the only available consistent agricultural data set for the whole of Vietnam from the early 1960s to the present.

(Men 1995, 39). The second cause related to investment. In the period between 1976 and 1980 there was inadequate investment in agriculture (Akram-Lodhi 2001a). This was in large part due to the heavy industry bias of the State Planning Commission. The consequence of inadequate investment in agriculture was that in many parts of the country the productive capacities of the sector deteriorated in the late 1970s. The weaknesses of the collectives had long been recognized amongst peasants and local cadres of the Communist Part of Vietnam (CPV). The success of local initiatives in the late 1960s and early 1970s to alter the organization of production within collective agriculture encouraged the CPV to begin a process of restructuring that ultimately decollectivized agriculture and unleashed an ongoing process of agrarian transition (Akram-Lodhi 2001a, forthcoming). Changes in agrarian relations covered tenurial arrangements, access to inputs, resource allocation decisions, output marketing and taxation, and are summarized in the Appendix. They thus fundamentally transformed the organization of rural production, replacing central planning with state-guided, but nonetheless market-based, commodity production predicated upon peasant family farming. Of the reforms

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Vietnam’s Agriculture 79 summarized in the Appendix, probably the most important were Resolution 10 of 1988, the 1993 Land Law, which strengthened property rights in land, and, perhaps, Resolution 6 of 1998, which liberalized the rural land and labour markets (Akram-Lodhi 2001a). Access to Land in the 1990s A stark contrast of views Decollectivization initially resulted in an apparently equitable distribution of land, of the kind favoured by GKI. However, liberalization also ushered in the operation of land markets. In the early 1990s these land markets were fragmentary (Chung 1994), although over the course of the decade they became less so, even if they remained only partially complete (Ravallion and van de Walle 2003). However, partially complete ‘real’ markets are capable of being ‘regulated’ by dominant economic agents that can take advantage of asymmetrical information and bounded rationality (Bernstein 1996; Akram-Lodhi 2001b) to shape the operation of markets to their own advantage. Thus, it comes as little surprise that Fforde and de Vylder (1996, 189) were able to show that as early as 1991 there was differentiation amongst net savers in the rural economy. The poorest 65 per cent of the rural population were net dissavers while the richest 15 to 20 per cent of the rural population were net savers. Fforde and de Vylder suggested ‘that over one-half of the rural population was likely to be losing control over assets’. During the 1990s the view that the operation of partially complete ‘real’ land markets was fostering differentiation in access to land gained some currency (Phong 1995). More recently, the Vietnam Development Report 2003 has unambiguously stated that ‘the tendency towards the concentration of land is clearly visible’ ( Joint Donor Report to the Vietnam Consultative Group Meeting [henceforth Joint Donor Report] 2003, 38). This is clear enough. In stark contrast to this position, recent research – largely done within the auspices of the World Bank, published as World Bank Policy Research Working Papers, and apparently bearing out the GKI logic – has suggested that land markets in Vietnam are pro-poor. This is so, it is held, in the sense that land sales are not concentrated amongst the poor, and that demand for land to rent comes principally from those with lower levels of assets, most particularly land (Deininger and Jin 2003; Ravallion and van de Walle 2003). What, then, precisely does this research purport to show? This I will now summarize. I will subsequently suggest why one may regard the results with some scepticism. The World Bank view: pro-poor land markets Clearly, the impact of the emergence of partially complete ‘real’ land markets on the distribution of land and wealth is an empirical question, and in this regard Vietnam has a good initial source of data, in the form of the Vietnam Living Standards Surveys (VLSS) published in 1994 and 1999 and the Vietnam Household

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80 A. Haroon Akram-Lodhi Living Standards Survey (VHLSS) completed in 2002.2 Table 1 collates the data contained in these surveys, arraying crop land and perennial land per household and, in the case of crop land, per worker, by per capita expenditure quintiles. Table 1 also contains data on crop area in three important agricultural regions of Vietnam: the Mekong Delta, the Red River Delta and the Central Highlands. Cumulatively, then, Table 1 provides an overview of broad trends in agrarian structure across all of Vietnam and in selected regions of Vietnam between 1993 and 2002. Per capita expenditure quintiles are used as a proxy for wealth, and while their use is far from ideal they can be justified on the basis that consumption expenditure data tend to be more accurate than income data and are, moreover, a better illustration of household welfare (Glewe et al. 2000). Several important points seem to emerge from Table 1. First, it is apparent that farms in rural Vietnam are on average small, and thus for many farmers land held under the land use certificates issued by the Vietnamese authorities is likely to be insufficient to meet the subsistence needs of the household. In this sense, then, land rental and sales markets have the potential to have a significant effect on the welfare of rural households. Second, when examining crop area per household across Vietnam, it seems apparent that land distribution has improved in favour of those households in the relatively poorer per capita expenditure quintiles. This is true on the basis of both per household and per worker. Thus, whereas in 1993 the average cropped area for the relatively richer households was almost double that of the relatively poorest, by 2002 there was no significant difference between the cropped area of the relatively richer households and the relatively poorer.3 Third, the data demonstrate a significant shift in how land is used. There have been, across all per capita expenditure quintiles, increases in the share of the cropped area devoted to perennial crops (for example, coffee, cashews and citrus fruits). Examining the elasticity of perennials with respect to cropped area, on a per worker basis between 1993 and 1998 the elasticity is smallest for those households in the middle of the per capita expenditure distribution, and greatest for those in the relatively richer households. On a per household basis, between 1993 and 2002 the data indicate again that the shift to perennials is weakest amongst households in the middle of the per capita expenditure distribution and fairly uniform across the other per capita expenditure quintiles. The figures for perennial

2

In 1993 and 1998 the General Statistical Office (GSO) undertook two nationally representative living standards surveys, with financial and technical assistance from donors. The first VLSS surveyed 4800 households, while the second VLSS surveyed 6000 households, including 4300 that had been surveyed during the first VLSS. Thus, Vietnam has a rich panel data set, even though the 1998 VLSS is ‘not a true random sample of Vietnamese households’ (Desai 2000, i). The full details are contained in GSO (1994, 1999). In 2002 the GSO undertook the first of what is expected to be a biannual Vietnam Household Living Standards Survey (VHLSS). The VHLSS is also a nationally representative living standards survey, but has a much larger sample size than the VLSS, uses a shorter survey protocol and did not interview households that had been surveyed by the VLSS ( Joint Donor Report 2003). Thus, its findings, while representative, cannot be integrated into the previous panel. 3 As both the VLSS and the VHLSS are statistically representative, this finding cannot be explained by the simple fact that the three surveys together do not form a panel.

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Table 1. Agrarian structure in Vietnam 1. All Vietnam 1993

1998

2002

Elasticity of perennials with respect to crop land

81

Crop Perennial Cropped to area per area per perennials, household household % Poorest Near poor Middle Near rich Rich

3808 4042 4583 5534 7373

362 539 956 952 1488

9.5 13.3 20.9 17.2 20.2

Crop area per worker

Crop area per household

Perennial area per household

1719 1713 1910 2233 3207

4052 4508 5130 5366 5079

654 1002 1188 1668 3740

Cropped to Crop perennials, area per % worker 16.1 22.2 23.2 31.1 73.6

1468 1598 1788 1724 1770

Crop area per household

Perennial area per household

Cropped to perennials, %

Per worker, 1993–1998

Per household, 1993–2002

4778 3898 4333 4610 4867

1114 1189 1427 2239 2649

23.3 30.5 32.9 48.6 54.4

2.1 2.0 1.3 2.3 4.6

2.5 2.3 1.6 2.8 2.7

2. Regions Red River Delta

Central Highlands

Crop area per household

Crop area per household

Crop area per household

1993

1998

Percentage change

1993

1998

Percentage change

1993

1998

Percentage change

5355 6361 8680 9681 11828

5699 8057 8997 8756 9930

106.4 126.7 103.7 90.4 84.0

2482 2639 2522 2186 1711

2451 2731 2710 2444 1702

98.8 103.5 107.5 111.8 99.5

4892 6883 5607 7177 11009

4842 6889 6242 3643 1564

99.0 100.1 111.3 50.8 14.2

Source: GSO (1994, Tables 5.1.1, 5.1.5, 5.1.8, 5.1.13); GSO (1999, Tables 5.1.1, 5.1.4, 5.1.5); Joint Donor Group (2003, Table 3.2). Note: Area is per square metre.

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Poorest Near poor Middle Near rich Rich

Mekong Delta

82 A. Haroon Akram-Lodhi crops are important in understanding patterns of agricultural accumulation in rural Vietnam, and will therefore be explored in more detail later in the article. In part, the data in Table 1 may reflect the increasing use of freshly cleared land in upland areas as well as the administrative reallocation of land to individuals that had been previously retained by local government following decollectivization, trends that have been well documented ( Joint Donor Report 2003; Marsh and MacAulay no date; Asian Development Bank (ADB) 2002). Notwithstanding this, it might be inferred from the all-Vietnam data in Table 1 that the emergence of partially complete land markets during the 1990s served to redistribute land towards those households in relatively poorer per capita expenditure quintiles. This seems to have been confirmed in a number of econometric studies of the land market in Vietnam that have examined the panel data in the VLSS. Thus, Schipper (2003, Table 2) reports changes in landholdings between 1993 and 1998 by form of ownership and by landholding quintiles as a percentage of the land area in 1993. The evidence seems to indicate strongly that the distribution of land has become more equal over the 1990s, with the most land-poor landholding quintile increasing its control of land by 265 per cent between 1993 and 1998. Supporting this finding, Ravallion and van de Walle (2003) argue that over the 1990s the land market served to iron out some of the inefficiencies in land allocation generated by initial administrative decisions. Rural households that had too little land after decollectivization used the emerging market to acquire additional land, and witnessed the largest increase in holdings, while those that had too much land disposed of it through the market. Deininger and Jin (2003) reinforce this finding, and argue that in addition to the equity enhancements generated by the land market, land transfers have improved efficiency because the demand for land, either to buy or to rent, was driven by those households that were more productive but that had lower endowments. This is consistent with the much earlier findings of Chung (1994), who argued that farmers leased-in land to supplement operational holdings, to boost income and to fully utilize available assets, principally labour. Land is leased out for a variety of reasons, including a lack of capacity to invest in productivity enhancements, fragmentation of holdings, lack of access to labour, economic shocks at the household level such as illness, and because of income and asset diversification into rural non-farm household enterprises (Deininger and Jin 2003; Ravallion and van de Walle 2003; Vijverberg and Haughton 2004). In this light it is not surprising that the number of households in the 1998 VLSS that sold land was five times the number of households that sold land in the 1993 VLSS and that the number of households that bought land in the 1998 VLSS was seven times the number of households that bought land in the 1993 VLSS (Deininger and Jin 2003, Table 2). Clearly, land markets, even if only partially complete, are operating in rural Vietnam. Similarly, in terms of land rental in the 1998 VLSS it was demonstrated that 4.1 per cent of farm households rented out land, while 15.8 per cent of farm households rented in land (Deininger and Jin 2003, Table 2). Estimates from the 2002 VHLSS suggest that the 15 per

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Vietnam’s Agriculture 83 cent of rural households that currently lease in or lease out land represents a threefold increase in land market participation since 1993 ( Joint Donor Report 2003, 38), and for this to make sense in the context of the data contained in Table 1 it would have to be the case that land rentals are principally the provenance of relatively poorer per capita expenditure quintiles. Although fixed rents are more common than sharecropping, perhaps the most interesting aspect of the land rental market is that in terms of both renting in and renting out it is most common for land to be leased for free, a finding that requires further research but which may be a consequence of the enhanced power of local officials to intervene in the land market as a consequence of land market legislation (Ravallion and van de Walle 2003). This would help explain, for example, why Ravallion and van de Walle (2003) find that despite continuing administrative obstacles in some regions that had the potential to restrict land markets, in many circumstances non-market land administration is ‘cooperant’ with the market forces that are operating, albeit unevenly and partially. Vietnam is a spatially diverse country, and it could be the case that pooling national data obscures significant inter- and intra-regional differences. Therefore, the second part of Table 1 examines the distribution of crop area by per capita expenditure quintiles for three agricultural regions between 1993 and 1998. Consistent with the all-Vietnam data, a redistribution of crop area that is not in favour of relatively richer per capita expenditure quintiles is confirmed in all three regions, most starkly the Central Highlands. Thus, both the survey data and econometric analysis based upon it appear to suggest that the ‘real’ land market, as it has been developing, has been operating to the benefit of the relatively poorer per capita expenditure quintiles in Vietnam and in this sense the land market is pro-poor. Questioning the World Bank view What does one make of these findings in relation to the argument that I have developed earlier in this paper? In previous research I have argued that rural differentiation in terms of access to land in Vietnam proceeded during the 1990s (Akram-Lodhi 2001a). The basis of this argument is provided by the case studies presented in the fourth section below (‘Accumulation and Differentiation: Four Case Studies’), unpublished fieldwork conducted in northern, central and southern Vietnam between 1998 and 2002, as well as the research of a host of Vietnamese MA and PhD students. Clearly, however, the survey data and the econometric analysis render my earlier argument open to question. Nonetheless, the concerns that I have about the veracity of the conclusions that can be drawn from the survey data and the econometric analysis remain. If one puts to one side the case studies presented in the fourth section and considers, to start off with, the price of land, one finds the following. The average price of crop land per hectare, in current Vietnamese dong (VND), jumped from VND 11.9 million in 1993 to VND 26.1 million in 1998, a period in which inflation was very low. This increase is significantly faster than the

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84 A. Haroon Akram-Lodhi growth in either per capita income or per capita expenditure, and calls into question how rural households were able to finance land purchases. Deininger and Jin (2003) find that asset endowments and access to credit are important determinants of land purchases, but there are clear inequities in access to credit that will be discussed below. Inequities in access to credit would reinforce inequities in asset endowments, and these, together with price levels, suggest that relatively poorer rural households would not be likely to be able to purchase land. As a result, the land sales market might well be segmented on the basis of wealth. In this light, the finding that in 1998 some 9.8 per cent of agricultural households sold land, but only 2.5 per cent of agricultural households bought land (GSO 1999, Table 5.1.10) might be possible evidence of a land sales market that was generating differential access to land.4 In addition to the issue of price, it should also be noted that the quality of land held by relatively wealthier households is improving. In 1993, some 16 per cent of land held by the wealthiest quintile was classified as good, and 41.5 per cent of their land was irrigated. By 1998 the former figure had risen to 21 per cent, while the proportion of land irrigated amongst wealthier households stood at 82 per cent (GSO 1994, 5.1.11; GSO 1999, 5.1.7). By way of contrast, the relatively poorer households are more likely to have a significant proportion of their total holding forested, which is far less remunerative ( Joint Donor Report 2003, Table 3.2). One important indicator that would seem to support the possibility that the operation of the land market has been fostering the emergence of divergent access to land and a gradual concentration of land ownership in some parts of the country is the rise of marginal holdings and landlessness in the Mekong Delta, the ‘rice bowl’ of Vietnam. Whereas 28 per cent of rural households in the Mekong Delta in 1994 had less than 0.2 hectares of land, by 1997 the figure had risen to 37 per cent (World Bank and ADB 2002, 49). Similarly, whereas 16.9 per cent of rural households in the Mekong Delta were landless in 1993, by 2002 that figure had risen to 28.9 per cent ( Joint Donor Report 2003, Table 3.1). Moreover, the rise in landlessness in the Mekong Delta is both concentrated amongst the poorest and is very rapidly increasing. Thus, whereas in 1998 the poorest per capita expenditure quintile in the Mekong Delta contained 26 per cent of all landless rural households, by 2002 this figure had increased to 39 per cent ( Joint Donor Report 2003, 39). Indeed, it is a long-standing claim by some that rural differentiation in Vietnam has been and continues to be most pronounced in the Plain of Reeds, in the Mekong Delta (Phong 1995, 167). The growth in rural landlessness, however, is not restricted to the Mekong Delta; landlessness in rural Vietnam as a whole is increasing. In 1993, some 8.2 per cent of rural households did not have any land. By 1998, this figure had increased to 9.2 per cent. In the four years between 1998 and 2002 it doubled, to 4

Interestingly, Deininger and Jin’s (2003) econometric analysis finds that the proportions of agricultural households buying and selling land are the reverse of those reported by the GSO. Clearly, further research is required here.

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Vietnam’s Agriculture 85 18.9 per cent ( Joint Donor Report 2003, Table 3.1). The rapid acceleration in landlessness is found across all regions of Vietnam. Admittedly, significant factors in the rise of landlessness, which will be discussed below, are the diversification of relatively richer rural farm households into, in the first instance, rural non-farm household enterprises and, secondly, wage labour, as a means of raising household living standards and welfare (Vijverberg and Haughton 2004). However, given the continuing importance of on-farm activity in sustaining rural livelihoods and building diverse asset portfolios (Deininger and Jin 2003) the apparent fact that ‘a rural proletariat is emerging’ (Haughton 2000) is a significant issue in rural Vietnam. This is not only because, as Haughton (2000) notes, agricultural labour is the poorest occupational category in the country, with 55 per cent falling below the poverty line. In the Mekong Delta, for example, agricultural labour is highly seasonal, with employment being available for only between 110 and 150 days a year, and is very low paid ( Joint Donor Report 2003, 111–12). It is also because the rapid growth in landlessness between 1998 and 2002 might be taken to be prima facie evidence that divergent access to land is deepening in rural Vietnam. Thus, while it may be that land stratification is proceeding in Vietnam, as I have argued previously, it is further the case that this process is witnessed within particular provinces, and, more specifically, within particular districts and communes. If this is so, all-country evidence such as that produced by the VLSS and the VHLSS, and even regional and provincial data, may hide emerging intra-provincial, and indeed intra-district and intra-commune divergence in access to land during the 1990s. This more nuanced perspective is consistent with both my own fieldwork across Vietnam as well as the extensive fieldwork conducted by my Vietnamese MA and PhD students. Possible mechanisms underpinning land dispossession and concentration have been explored in two studies of three southern provinces in the Mekong Delta where the problem appears to be acute (Oxfam (GB) 1999; AusAid 2003). These studies cumulatively identified eight reasons why relatively poorer rural households might liquidate landholdings. The first related to formal sector credit. Thus, some people who took out formal loans for the first time in the early and mid-1990s found that they were unable to meet their obligations and had as a consequence been forced to sell their land. The second was output failures, often as a result of climatic shocks, which resulted in the need to make distress sales of land in order to repay accumulated debts. The third was ill health, which resulted in distress sales of land in order to pay for medical treatment. The fourth was the operation of land markets which had made the sale or mortgaging of land considerably easier while at the same time serving to exclude some of those who lacked land from either earning enough money or accessing adequate credit to purchase additional land. The fifth reason was the increased prosperity of some, which had given them both the resources and the willingness to buy additional land in order to enhance their productive base. The sixth was that many farmers with a very small holding of land had come to believe that the returns to productive activity in farming were less than migrating to the city and

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86 A. Haroon Akram-Lodhi engaging in wage labour. The seventh reason was that there were more wage labouring opportunities, and although rural wages are very low the relative return to rural waged labour had increased. The final reason was that salinization and poor irrigation had, on occasion, led to low land values that had in turn encouraged sales by very small farmers.5 Debt has played an especially pernicious role in fostering dispossession. A vignette from Tien Giang province in the Mekong Delta can illustrate the way in which debt in particular has become an important mechanism of social differentiation (AusAid 2003). The farm household under consideration inherited a 7 acre holding, which is very large by Mekong Delta standards. In 1995 the household borrowed VND 3 million from a rural bank to renovate their home. In 1996 the household borrowed a further VND 17 million to shift their farm land into paddy production. However, the crop became diseased, which meant that productivity was much lower than the household had expected. At the same time, the price of paddy fell. Costs of production thus exceeded the return the household earned from the crop. The household was therefore unable to meet some of the costs that it had incurred for farm inputs, and fell into debt. As a result, in 1997 the household sold 3 acres to some relatively more prosperous farmers, to offset both debts incurred from the previous year’s production as well as debts incurred in renovating the household’s home. On the remaining 4 acres the household produced paddy, while at the same time the household bought some pigs for breeding. However, the pig price fell after the household completed the purchase, resulting in a loss of VND 2 million when the pigs were sold. Therefore, in 1999 the household sold its remaining land to liquidate all outstanding debts, both to rural banks and to local merchants. The land was sold to local farmers whose production decisions had been more fortuitous. At this time the household’s remaining savings amounted to 4 troy ounces of gold. The household moved to another province and mortgaged the gold in order to hire 23 acres to crop paddy. However, the soil was acidic, and the household incurred a loss in the first season of VND 4.5 million. This was followed by further losses of VND 3.5 million and, the following season, an inability to cover fertilizer expenses. Finally the household hired in an extra 3 acres, but in the fourth growing season a rodent infestation meant that it harvested only 26 bushels of rice from a holding of 26 acres. Unable to meet its mortgage payments, the household’s collateral was seized by the lender. In 2001 the household returned to Tien Giang and, having lost its land and its savings, commenced hiring out its labour. The household now earns a meagre living from seasonal wage labour. In this fashion, a farm household with a large holding of land gradually moved from a situation of relative prosperity to that of chronic poverty as a result of its acquisition and use of debt. The land that the

5

I have witnessed each of these in operation at least once in my fieldwork, and several – debt in particular – tend to interlock with other mechanisms of dispossession.

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Vietnam’s Agriculture 87 household had inherited shifted to the control of relatively more prosperous farmers, and while the debts owed by the household had been met, the cost had been high: dispossession from the means of production and the complete commodification of household labour. As these mechanisms and the accompanying vignette make clear, if access to rural land is becoming differentiated in particular districts and particular communes, an important factor in this process may be the way in which a ‘real’ credit market interlocks with a ‘real’ land market, with the latter being the mechanism by which the redistribution compelled by the former is carried out. This finding is reinforced by data in the VLSS. According to the 1998 VLSS some 54 per cent of rural households owed money, which was greater than the 47 per cent of rural households that reported being indebted in 1993 (GSO 1999, Table 8.2.1; GSO 1994, Table 8.2.2). However, in both the earlier and the later VLSS fewer households in the relatively richer per capita expenditure quintiles were in debt when compared to households in the relatively poorer per capita expenditure quintiles (GSO 1994, Table 8.2.7; GSO 1999, Table 8.2.3). This was so even though the volume of borrowing amongst relatively poorer households was, on a unit of land basis, much lower than that of the relatively better-off rural households (Wiens 1998, 77). Glewe et al. (2001) note that increases in the ratio of debt to assets tend to cut per capita expenditures and thus household welfare. In this light, it is clearly possible that the emergence of differential access to land in particular provinces, districts and communes may be debt-driven, as the credit market interlocks with the land market to facilitate alterations in the pattern of access of farm households to the means of production.6 One may, then, argue the following regarding access to land in Vietnam in the 1990s. Firstly, there is clearly a lack of consistency between nationally representative data and the evidence that has accumulated as a result of fieldwork. As has already been indicated and as will be further considered in the fourth section below (‘Accumulation and Differentiation: Four Case Studies’), there is clear variation in access to land, particularly as regards certain districts and communes in the Mekong Delta, where evidence of increasingly divergent access to land remains reasonably strong. Secondly, tenancy relations, including sharecropping, have returned to rural Vietnam during the 1990s, as the land market has become increasingly active. Thirdly, landlessness in rural Vietnam is increasing dramatically. As already noted, land sales and mortgage losses, along with the growth of the rural non-farm household economy amongst relatively richer rural households, appear to have a major role to play in explaining landlessness. Fourthly, fragmentation of landholdings has increased significantly since decollectivization despite the emergence of the land market. Thus, it is estimated that 11 million farming households currently operate 100 million plots (World Bank and ADB 2002, 47). In the Red River Delta, where the average size

6

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I have witnessed such processes at work in three different fieldwork sites in rural Vietnam.

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88 A. Haroon Akram-Lodhi of a farm is less than 0.3 hectares, the average number of plots that constituted an operational holding were already between 8 and 9 only a few years ago (World Bank 1998, 10); now, the number of plots is greater. Fifthly, stratification of landholdings in particular localities may help explain Resolution 6 of 1998, described in the Appendix, and its attendant easing of restrictions on the operation of the rural land and labour markets. Although the 1993 Land Law stipulated a maximum farm size of 5 hectares, by 1995 there were already 113,700 farms in excess of this limit and 1900 farms in excess of 10 hectares. Indeed, in some southern provinces it is possible to come across privately owned farms that are implicitly condoned by the state and by the CPV which are in excess of 1000 hectares.7 While these farms constituted only 1.1 per cent of farm households, it is worth stressing that 66 per cent of them were in the Mekong Delta. In a sense then Resolution 6 was, in 1998, simply an ex post recognition of changes in the agrarian structure that had already occurred as the ‘real’ land market had developed. In February 2000, when the state reiterated its intention to implement Resolution 6, it was revealed that these so-called ‘large scale’ farms generated an average household income of US$7500 per year, well above the average per capita national income of US$350 (Vietnam Investment Review, 14 February 2000). Resolution 6 suggests that there are those in the state and in the CPV that are not concerned about the possible impact of the emergence of the ‘real’ land market on land stratification, and that these people have, in effect, won the argument within major Vietnamese institutions. That this is the case has been recognized by Vietnam’s major donors, including the World Bank, which have recently written that ‘the tendency towards the concentration of land is clearly visible’ ( Joint Donor Report 2003, 38; Ravallion and van de Walle 2001). One final concern can be voiced. Land is the principal agrarian asset, but the effective use of this asset requires other, complementary assets such as farm equipment, machinery, livestock and labour, whether it be owned or hired, and which are therefore acquired through partially complete ‘real’ markets. Indeed, it is possible for land distribution to become more equitable even as the distribution of total farm assets becomes more inequitable, and, in this instance, changes in the production process would not necessarily be reflected in changes in the distribution of land but rather in changes in the labour process, as reflected in changes in the technical coefficients of production and hence the scale of production. It is therefore to this issue that I now turn. It is of considerable significance.

7

Although the local authorities do not like it, I have visited several such farms. It is notable that one was controlled by a CPV district secretary, while another was controlled by the Deputy Director of the provincial Department for Agriculture and Rural Development. It is, in my experience, quite common to find the wealthiest farmers in communes having strong CPV connections such as being Party Secretary, and this may help explain why Ravallion and van de Walle (2003) find that local administrations have by and large not sought to thwart the emergence of land markets. Watts (1998) terms those who use party connections in business and trade ‘nomenklatura entrepreneurs’. Perhaps it is time to call those farmers with CPV connections ‘nomenklatura proto-capitalist farmers’.

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Vietnam’s Agriculture 89 The Technical Coefficients of Production in the 1990s Re-emergent peasant farm households have responded to the new agrarian environment in rural Vietnam vigorously since decollectivization, transforming the rural labour process. Table 2 demonstrates changes in the structure of farm inputs between the late 1970s and the late 1990s. Despite the decline in the amount of arable land per capita the total amount of land devoted to cereal production, primarily rice, increased by almost 40 per cent during the period. The extension of the area devoted to rice was accompanied by an intensification of production. The proportion of the cropped area irrigated increased by almost 70 per cent; the use of fertilizers increased eleven-fold, and the number of tractors increased by almost a factor of six. Clearly, there have been changes in the technology used in Vietnamese agriculture, although, consistent with the argument of the previous sub-section, these changes differ between and within provinces, districts and communes. The only variable that did not radically alter was the use of hired labour, although, as will be discussed below, hired labour employment has restructured. In terms of household labour, between 1993 and 1998 household farm employment of males decreased by 0.3 per cent per annum, while household farm employment of females increased by 0.9 per cent per annum (Government of Vietnam-Donor-NGO Poverty Working Group [PWG] 1999, Table 3.2). Farm production is, in this sense, becoming – somewhat – ‘feminized’. The aggregate impact of rural restructuring on per capita output in Vietnam is demonstrated in Figure 1, in which increases in the trend rate of growth since the late 1980s are clear. It is worth stressing that the cereals output illustrated in Figure 1 is dominated by rice. Over the period between 1990 and 1998 paddy production accounted for an average of 90.3 per cent of all foodgrain production when measured by volume, and for almost half the gross value of agricultural production (World Bank 2000, Table 7.1). In order to assess the significance of the growth of foodgrain production since the late 1980s, median growth rates can be plotted on a scatter plot and a negative reciprocal regression line fitted to Table 2. Key indicators of production inputs Input Arable land per capita, in hectares Land under cereal production, in thousands of hectares∗ Irrigated land as a share of cropland Fertilizer use per hectare of arable land, in hundreds of grams Tractors per 100 hectares of arable land

1979–1981

1998–2000

0.11

0.07

5963 24.1

8322 40.9

302 38

3420 224

Note: ∗ 1999–2001. Source: World Bank (2003, Table 3.2).

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90 A. Haroon Akram-Lodhi Figure 2 Growth rates in foodgrain production, 1962–1997

Source: Author’s calculations from Food and Agriculture Organization (1999).

the trend.8 This is done in Figure 2, which demonstrates a rise in estimated median growth rates from about 2 per cent a year in the early 1960s to about 6.5 per cent a year by the late 1990s. Moreover, just as importantly, the pattern is heteroscedastic, with variation around the regression line visibly diminishing over time. Similar patterns can also be observed for food availability and per capita food availability, although the growth rates are not nearly as dramatic. Clearly, there has been a dynamic supply response. As Jansen (1998, 9) observes, the growth in gross agricultural output was a function of two factors: intensity and yields. In 1985, prior to formal decollectivization, the ratio of the sown area to the cultivated area stood at 1.3 (ANZDEC 2000, 7). By 1998 the ratio of sown area to cultivated area stood at 1.7, a rate of growth of cropping intensity of some 2.1 per cent per year. In terms of yields, in 1979–81 cereal yields per hectare amounted to 2049 kilograms. By 2000, this had risen to 4048 kilograms per hectare (World Bank 2003). It is a dramatic improvement in agrarian productivity. Table 2 indicates a shift in choice of technique during the 1990s, with a move towards greater capital intensity. However, it is well established that the inputs necessary to enhance factor intensity are neither scale- nor resource-neutral. At the same time, the previous sub-section suggested that access to land is becoming differentiated, albeit subject to district and commune-level variation. This suggests in turn that it is possible that use of key production inputs may 8

I am indebted to Marc Wuyts for demonstrating the properties of the negative reciprocal transformation to me.

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Vietnam’s Agriculture 91 also become differentiated. If such were the case, there would be differences in the technical coefficients of production across farms, as differentiated access to capital, technology and labour power emerged. Table 3 presents evidence on changes in crop cultivation expenses by per capita expenditure quintile, as derived from the VLSS. Four important points can be made regarding Table 3. The first is that working capital continues to be, as would be expected, an important expense. However, for wealthier expenditure quintiles working capital became a relatively less important expense between 1993 and 1998. Thus, while expenses on seed, fertilizers and insecticides amounted to 85 per cent of total expenses for the poorest expenditure quintile in 1993, they also amounted to 72 per cent of total expenses for the wealthiest expenditure quintile. By way of contrast, in 1998 such expenses amounted to 78 per cent of total expenses for the poorest expenditure quintile, but only 40 per cent of expenses for the wealthiest expenditure quintile. Secondly, one notes the source of the difference: the provision of private productive services such as the rental of draft animals, the maintenance and repair of agricultural equipment, and fuel, along with equipment rental. Equipment rental became, in absolute terms, more important for all farmers between 1993 and 1998. However, for the wealthiest expenditure quintile equipment rental grew in both absolute and relative importance. By 1998 equipment rental accounted for almost 37 per cent of crop cultivation expenses, which was almost three times that of any other expenditure quintile. Considering productive services and equipment rental together, whereas in 1993 the amount spent on these expenses averaged between 11 and 12 per cent of all expenses regardless of expenditure quintile, by 1998 a reasonably clear positive relationship between expenditure quintile and productive services and equipment rental expenses had emerged. Thus, for the poorest expenditure quintile in 1998 such expenses accounted for 19 per cent of all expenses. By way of contrast, for the wealthiest expenditure quintile such expenses accounted for almost 49 per cent of all expenses. The third point is that the table understates the role of hired labour in crop cultivation expenses, as a result of a quirk in the presentation of the data of the VLSS. In addition to the expenses for labour indicated in the labour hiring column, labour expenses for those providing draft animals and those operating equipment are included in the services column. Thus, although the data show that labour hiring is indeed important for the wealthiest expenditure quintiles, it is in fact more important than is indicated in the table. The fourth point that emerges is a function of the previous three, and is the most important: clearly, the use of technology differs across expenditure quintiles in rural Vietnam. This finding is not surprising. The ability to rent draft animals and equipment, hire labour and maintain machinery is not resource-neutral. Neither is the ownership of these inputs (Akram-Lodhi forthcoming). Differences in the technical coefficients of production, when considered in light of the fact that certain inputs are not resource-neutral, suggests that there has been a reconfiguration of rural labour processes within and between households as access to these production technologies becomes differentiated on the basis of the resource capacity of farms. Farms in rural Vietnam may be

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92 A. Haroon Akram-Lodhi Table 3. Crop cultivation expenses by expenditure quintile, 1993 and 1998 1993 Expenditure quintile

Poorest Near poor Middle Near rich Rich 1998 Expenditure quintile Poorest Near poor Middle Near rich Rich

Total expenses = 100 Seed

Chemical Organic Insecticide Transport fertilizer fertilizer

Services Equipment rental

Labour hiring

34.45 27.11 24.58 23.62 20.13

44.31 47.89 47.64 45.03 41.04

0.28 0.48 0.74 0.84 1.21

6.60 7.92 8.63 9.42 9.24

0.19 0.30 0.46 0.58 1.06

7.09 6.31 5.34 4.02 2.09

5.07 6.02 7.24 6.89 8.49

2.03 3.97 5.38 9.60 16.73

23.07 19.59 18.16 15.85 10.73

45.85 42.40 40.72 36.55 22.25

0.30 0.32 0.93 3.26 0.87

8.53 10.03 9.88 9.30 6.41

0.52 0.63 0.71 0.76 0.69

8.75 10.45 10.99 12.49 11.94

10.24 11.62 11.97 12.49 36.65

2.74 4.96 6.63 9.30 10.47

Source: GSO (1999, Table 5.2.10); GSO (1994, Table 5.2.10).

diverging in terms of their scale of production. Indeed, for some relatively wealthier farm households the shift in the technology they use may represent a shift in their loci of accumulation, as they intensify their use of capital and labour power in an effort to overcome constraints on accumulation arising out of the partially complete character of land and labour markets, as well as the possible monitoring and supervisory problems that may be associated with usage of labour. Moreover, acquiring these inputs is not only done so that they can be used on the owner’s farm. An increasing share of these inputs is owned by relatively wealthier farmers and they are rented to relatively poor farmers. As one farmer operating 900 hectares in the Plain of Reeds in the Mekong Delta stated, I used my savings to buy a water pump which I use to water neighbouring rice fields. The money that I earn from this is just enough to cover the cost of cultivating my rice field. As I result, I lose nothing and keep all the income from the crop. (Vietnam News 9 April 2001) Thus, the resource capacity of farms should be considered in light of the variety of assets that the household may possess. Assets, whether they be land or non-land, are used to sustain the accumulation of some rural households by facilitating the emergence of scale economies that overcome constraints to accumulation while at the same time opening up the possibility of new avenues of accumulation. So far, this article has noted the restructuring of rural production that occurred in Vietnam during the 1980s and 1990s. It has suggested that divergent

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Vietnam’s Agriculture 93 Table 4. Paddy productivity by expenditure quintiles Expenditure quintiles

Poorest Near poor Middle Near rich Rich

Total output, 00s of kilos per hectare 1993

1998

29.28 30.89 31.91 32.53 31.24

33.7 38.4 39.2 40.9 41.1

Source: GSO (1999, Table 5.2.4); GSO (1994, Table 5.2.5).

access to land in rural Vietnam has in fact been proceeding, albeit with regionally specific variation; has demonstrated that there have been changes in the technical coefficients of production both across and between farms that reflect differentiated access to capital, technology and labour power; and has shown an impressive aggregate supply response. Given these apparent processes, it might be suggested that the supply response of farms might also be differentiated. This is confirmed in Table 4, which displays differences in productivity amongst farms by arraying paddy productivity per hectare in 1993 and 1998 by expenditure quintiles. The results are quite striking. In 1993 the difference between the least productive expenditure quintile and the most productive expenditure quintile was 325 kilograms per hectare. Although wealth was correlated with productivity, the relationship was not linear: the wealthiest expenditure quintile was not the most productive. By 1998, circumstances had dramatically changed. The difference between the least productive expenditure quintile and the most productive expenditure quintile was 740 kilograms per hectare. Whereas productivity for the poorest wealth expenditure quintile increased by just over 15 per cent, productivity for the wealthiest expenditure quintile increased by 31.6 per cent. Possible differences in access to land, a principal productive asset, differential technical coefficients of production, and differential productivity strongly suggest that farms in rural Vietnam may not necessarily be pursuing the same production purpose. This is supported by three pieces of evidence. The first is that the most dynamic agricultural growth has occurred in nonrice production (Watts 1998; Benjamin and Brandt 2004). As reflected in Table 1, there has been an important shift away from rice production and towards the use of land for higher value-added food and industrial perennial crops such as coffee, cashews and citrus, along with the development of aquaculture. In this light, it is not surprising that between 1993 and 1998 farm revenues from perennial crops increased by 127 per cent, from fruit trees by 112 per cent and from livestock and aquaculture by 52 per cent (PWG 1999, Table 3.8). However, there are significant regional differences in the distribution of land use (Benjamin and

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94 A. Haroon Akram-Lodhi Brandt 2004): Do and Iyer (2002) found, for example, that the shift to perennials occurred more rapidly in areas where the issuing of land use certificates was faster. Equally importantly for the purposes of this article, an especially biased distribution of perennial crop land towards relatively richer farm households is witnessed in some of the poorest parts of Vietnam ( Joint Donor Report 2003, 39). Similarly, relatively richer rural households tend to have larger areas devoted to aquaculture than relatively poorer rural households, particularly in the Mekong Delta ( Joint Donor Report 2003, 40). At the same time, in absolute terms the shift to perennials is clearly concentrated in relatively richer per capita expenditure quintiles, as demonstrated in Table 1. Moreover, in terms of the relative redistribution of cropped land from paddy to perennials, Table 1 demonstrated that the shift has been weakest amongst those in the middle of the per capita expenditure distribution. In a differentiating and divergent agriculture, the increasing absolute share of output accounted for by higher value-added crops amongst relatively richer per capita expenditure quintiles while relatively poorer per capita expenditure quintiles continue to devote significant proportions of their cropped area to paddy could promote further differentiation between richer and smaller peasants. Taken together, this suggests that rural accumulation is driven by the non-rice sector, that this accumulation may be inequalizing, and that this sector is located amongst relatively richer farmers, a suggestion consistent, interestingly enough, with the class analysis of Watts and the neoliberal analysis of the donor community in Vietnam (Watts 1998, 492; World Bank/ ADB/United Nations Development Programme [UNDP] 2000). The second piece of evidence concerns the commercialization of agriculture. Overall, Vietnamese agriculture became significantly more market oriented between 1993 and 2002 ( Joint Donor Report 2003, 41). Thus, whereas in 1993 some 48 per cent of agricultural production was sold, by 2002 this had risen to 70 per cent. Again, there are important regional differences in the degree of commercialization, with the south in general and the Mekong Delta in particular being much more highly commercialized and the Red River Delta having amongst the lowest rates of commercialization (Benjamin and Brandt 2004). However, there are also differences in commercialization based upon relative wealth, when represented by per capita expenditure quintile, which are displayed in Figure 3. Figure 3 demonstrates that relatively poorer per capita expenditure quintiles retained the bulk of their paddy and marketed proportionally less than relatively richer per capita expenditure quintiles. Thus, the relatively poorer per capita expenditure quintiles were, in 1998, at best, only partially integrated into generalized commodity production. As a consequence, one group of farmers produced for the market, and one group of farmers produced for subsistence. Clearly, the purpose of production can differ across farms. The third piece of evidence concerns rural diversification. While clearly important for the welfare of rural households, access to land does not ensure sustained improvements in living standards (World Bank and ADB 2002, 45). Rather, there is a clear positive association between, on the one hand, the degree of diversification and, on the other, household welfare and living standards,

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Vietnam’s Agriculture 95 Figure 3 Market integration in Vietnamese agriculture, 1998

although farms that are more diversified still tend to maintain cultivation activities (van de Walle and Cratty 2003). The reason is simple: as households become relatively richer, the drive to sustain growing incomes may require moving into less constrained, more remunerative productive activities, as a way of easing constraints on accumulation, and these activities need not be in agriculture. Thus, ceteris paribus, those households that undertake rural non-farm household enterprise activity have a significantly higher probability of being non-poor, and vice versa for those households that do not undertake rural non-farm household enterprise activity (van de Walle and Cratty 2003; Vijverberg and Haughton 2004). As households begin to accumulate resources, they are more likely to become engaged in rural non-farm household enterprise activity, while those households that are falling into a systematic resource deficit become less likely to become so engaged (Vijverberg and Haughton 2004). In a nutshell, this suggests that relatively richer per capita expenditure quintiles are more likely to diversify than relatively poorer per capita expenditure quintiles. Indeed, Benjamin and Brandt (2004) find that the shift of rural households into non-farm enterprises is a principal source of rural inequality, a finding that is supported by Glewe et al. (2000). If the extent and purpose of farm production between these relatively richer and relatively poorer groups of farmers is different, it is not surprising that there are differing degrees of integration into generalized commodity production in rural Vietnam. One group, small peasants, produces under the compulsion of survival, and must often sell its labour in order to survive, while the second group, rich peasants, produces to accumulate and often, as a result, has diversified into both higher value farm production and rural non-farm household enterprises. Cumulatively, one might say, the contours of the agrarian transition in rural Vietnam are becoming clearer. It is important to reiterate that this transition is context specific, and thus that there are differences across the regions, provinces, districts and communes of Vietnam. Nevertheless, some broad generalizations

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96 A. Haroon Akram-Lodhi seem possible. In general, I would suggest, there are three broad classes of peasants. The first are the landless, who are the poorest occupational group in Vietnam, and who, lacking access to the means of production, solely rely on working for others in agricultural and non-agricultural activities, on a casual, piece-rate, or fixed contract basis. Secondly, small peasants have relatively small holdings of land, use more labour-intensive methods of production, hire-in modern farm equipment and machinery when possible, produce predominantly rice, retain a significant proportion of that rice for subsistence, supplement their incomes by casual labour, but have not diversified into rural non-farm household enterprises. Thirdly, rich peasants have insignificantly larger holdings of land than small peasants in many cases, but may, in some cases, acquire sizeable farms. They use relatively more capital-intensive methods of production on their farms, hire out modern farm equipment and machinery, and hire in labour. They seek to produce higher value-added perennial crops along with rice, and sell the former, in particular, in output markets in which they are active participants. As rich peasants begin to accumulate some resources, they seek to further diversify their economic activity by beginning to shift into rural non-farm household enterprises, which, they hope, will allow them to continue to accumulate. For some of these rich peasants, then, the agrarian transition has encompassed different loci of accumulation, and has seen them shifting out of agriculture. Processes of rich peasant accumulation are clearly predicated upon mechanisms of social differentiation during Vietnam’s agrarian transition. In order to explore these processes in more detail, the article now turns to present evidence on rich peasant accumulation and mechanisms of social differentiation from four case studies in paddy-producing areas of southern Vietnam in the late 1990s and early 2000s. ACCUMULATION AND DIFFERENTIATION: FOUR CASE STUDIES9 Case 1 The data The data used in this sub-section come from a field survey in four provinces of the Mekong Delta conducted during May and June 1999. One district in each province was purposively selected because of its relatively high performance in terms of rice production. Within each district local authorities gave permission to gather data in two communes that, based on agroecological conditions, visual observation, focus group discussions and production outcomes, appeared to be reasonably representative of the district as a whole. Within each commune residences were randomly selected for the survey. In total, 160 households in the 9

The case studies were undertaken Tran Thuy Binh (2000), Duong Thanh Binh (2002), Luong Mai Ngoc Tuan (2002) and Pham Le Thong (1998) for their MA theses, organized under the auspices of the Vietnamese–Dutch Project for MA Programme in Development Economics. The theses are available in the Project Library or from the Project Office.

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Vietnam’s Agriculture 97 eight communes were administered a closed question survey examining the input choices and output outcomes of the 1998–99 winter–spring paddy crop. The sampling procedure appears to have produced a set of data that is reasonably consistent with that generated by other surveys in the Mekong Delta. The results of the survey Table 5 describes the inputs and yields of the 1998–99 winter–spring paddy crop. In the sample, the average size of a farm was 10.7 cong, with one cong being equivalent to 1000 square metres. The minimum was 1.6 cong and the maximum was 36.4 cong. The distribution of farm sizes displayed in Table 5 shows that over 60 per cent of the farms in the sample were between 5 and 20 cong, and that only 11 per cent of the farms in the sample had holdings in excess of 20 cong. The distribution of farms in the sample is consistent with the distribution of farms in the Mekong Delta as a whole (Binh 2000, 57). In the sample, some 12 per cent of farms lease in some land to supplement their operational holdings. Those that leased out land tended to be farms with holdings that were inadequate to support their household, and which therefore opted for participation in the labour market. However, these households were unwilling to reveal the extent of the land that they leased out. Be that as it may, the sample does contain landlords, the Vietnamese equivalent of owner-occupiers10 and owner-tenants. Table 5 demonstrates that an average of 67 labour days per hectare were devoted to the winter–spring rice crop. Although family labour was clearly important for the production of the crop, the purchase of labour power was also very important. Exchange labour, which had been important in the past, had all but disappeared. As a result, almost 42 per cent of labour requirements of farms were met through the hiring of labour from the local labour market.11 Wage rates varied according to the task that was performed, and were often paid at a piece rate. Males received wages that were between 1.5 and 2 times that paid to females. Although more hired labour was used on larger farms than on smaller farms, the relationship is not linear. It may be noted that some of the small farms that hired-in labour did so to replace family members who were in fact hiring themselves out to larger farms. In terms of non-labour inputs, farmers used an average of 262 kilograms of seed per hectare. There was no systematic relationship between seed utilization and farm size. Similarly, although farms spent an average of VND 1,199,000 per hectare on fertilizer, there was no systematic relationship between fertilizer use and farm size. I will return to this shortly. Surprisingly, however, Table 5 appears to indicate a broadly inverse relationship between renting machinery and farm size. Farms of less than 5 cong spent on average VND 1,046,500 per hectare

10 The Vietnamese equivalent of an owner-occupier would be a farm in possession of a land use certificate. 11 It is, in this context and in the context of the other case studies, important to recall Lenin’s (1964) stress, in The Development of Capitalism in Russia, that the presence of labour hiring is the principal indication of the development of capitalism in agriculture.

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Size of operational holding

Less than 5 cong 5–10 cong 10–20 cong More than 20 cong Average

Proportion of observations

Total labour days per hectare

Hired labour as a share of total labour

Fertilizer use per hectare (VND 000)

Machinery rental cost per hectare (VND 000)

Value of owned machinery and equipment per hectare (VND 000)

Yield per hectare, in metric tonnes

27.4 31.1 30.4 11.1

78 66 61 63 67

38.4 39.4 45.9 44.4 41.8

1149 1360 1142 1030 1199

1046.5 957.7 994.1 877 985

1438 1681 2233 2425 1917.5

6.05 6.28 6.45 6.46 6.29

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Source: Compiled from Binh (2000, Tables 11, 7C, 8C, 10C, 26, 31 and 33).

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Table 5. Inputs and yields in the Mekong Delta, winter–spring crop, 1999

Vietnam’s Agriculture 99 on machinery rental, while farms of more than 20 cong spent only VND 877,000 per hectare on machinery rental. The reason for this is that, as demonstrated in Table 5, larger farms owned more machinery and equipment. In Table 5 farms with holdings of more than 20 cong owned 68.6 per cent more machinery and equipment than those farms that had holdings of less than 5 cong. Overall, there is a positive relationship between the value of owned machinery and equipment and farm size. This also helps explain why larger farms use less fertilizer than smaller farms – their access to machinery and equipment make them less reliant on fertilizer to sustain productivity. In other words, processes of rural accumulation appear to be driven by shifts in factor intensity towards capital, which facilitate increases in the scale of production. However, the positive relationship between farm size and size of non-land assets actually masks some of the extent of differentiated access to non-land production assets. Within the sample some 55 per cent of households owned no machinery or equipment. These households all had farms of less than 10 cong. By way of contrast, nine households owned non-land assets worth more than VND 5 million, and four households had non-land assets worth more than VND 20 million. These four households all had farms of more than 20 cong. The non-land assets owned by these four households consisted of tractors, pumps and threshers. Indeed, these four households possessed 75 per cent of the large tractors that were owned in the sample. There was a clear association between size of holding and value of modern equipment and machinery. At the same time, those households that owned farm machinery and equipment were substituting hired labour and machinery for family labour. Thus, the four households with the highest value of non-land assets used an average of 31 days of hired labour per hectare on their holdings of more than 20 cong. When hired labour utilization is arrayed by value of non-land assets, this was the highest use of hired labour in the sample. There thus appears to be within the sample an emergent group of rich peasants with larger landholdings, larger amounts of capital stock and larger use of hired labour. Increased capital intensity therefore represents the dominant strategy pursued by large-scale farms to sustain processes of accumulation, possibly in part because such a strategy might obviate the possible constraints to accumulation that an increase in labour intensity might entail. This can be contrasted to smaller peasants who do not possess capital stock, and thus who have a smaller total asset base. Admittedly, the use of hired labour was, at 28 days per hectare when arrayed by value of non-land assets, also high on farms that had a small non-land asset base and hence a small total asset base. However, the motivation behind the use of labour power is different between the richer peasants and smaller peasants. For the small peasants, hired labour was often used to substitute for family labour that was hired out. At the same time, farmers that did not own modern machinery and equipment still needed it, and they had to pay VND 320,000 per hectare for it, a very large component of overall farm costs. In hiring this machinery, farmers also had to hire the labour necessary to operate the machinery, and this also helps explain the recourse to hired labour on small peasant farms. Farms that hired modern machinery and

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the labour necessary to operate it did so from rich peasants. Therefore, rich peasants were receiving income from land, labour and machinery as processes of accumulation flourished alongside mechanisms of social differentiation. Table 5 demonstrates a positive yet weak relationship between farm size and yields per hectare. The relationship is not statistically significant. However, although weak, the positive relationship should be placed within the context of the other data contained within the Table. Farms with larger landholdings, larger amounts of capital stock and larger use of labour-power are more productive. Farms with smaller landholdings, smaller amounts of capital stock and lesser use of labour-power are less productive. There are, within the sample, differences in the technical coefficients of production, and hence the scale of production, and these differences are reflected in productivity outcomes. Case 2 The data The data used in this sub-section come from a field survey in four exclusively paddy-producing districts of one province of southern Vietnam during May and June 2001. Within each district a list of all paddy-producing households was obtained from government officials, and a linear systematic sample was extracted. In total, 148 households were finally administered the short closed question survey examining the input choices and output outcomes of the 2000–01 winter–spring paddy crop. The sampling procedure appears to have produced a set of data that is reasonably consistent with that generated by other surveys that have been undertaken for the provincial Department of Agricultural and Rural Development. The results of the survey Table 6 describes the land, labour, working capital, draught power and machinery inputs, and yields, of the 2000–01 winter–spring paddy crop. In the sample, the average size of farm was 8.2 cong. The minimum size of farm was 2.4 cong, while the largest was 21 cong. However, the distribution of farm sizes displayed in Table 6 shows that 50 per cent of the farms in the sample had holdings of less than 7.5 cong, and that only 8 per cent of the farms in the sample had holdings of 12.5 cong or more. Thus, the distribution of farm households is skewed towards smaller farms. Table 6 reveals that an average of 53 labour days per holding was devoted to the winter–spring rice crop. As in all Vietnamese farms, family labour was important for the production of the crop. However, the purchase of labour power was also important. Overall, over 18 per cent of the labour requirements of farms were met through the hiring of labour from the local labour market. Moreover, in general, there is a trend for farms to increase their use of hired labour as farm size grows. Thus, very small farms rely on hired labour for over 14 per cent of their total labour inputs. Farms of more than 10 cong, however, rely on hired labour for almost 22 per cent of their total labour inputs, which indicates a 35 per cent greater reliance on hired labour amongst relatively larger farms.

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Table 6. Inputs and yields in southern Vietnam, winter–spring crop, 2000/2001 Size of operational holding

Less than 5 cong 5 to less than 7.5 cong 7.5 to less than 10 cong 10 cong or more Average

Total labour days per holding

Hired labour as a share of total labour

Fertilizer and pesticide use per holding (VND 000)

Draught power and machinery rental cost per holding (VND 000)

Yield per hectare, in metric tonnes

8.1 41.2 25.0 25.7

46.3 46.4 54.1 65.2 53.1

14.4 16.4 18.8 21.9 18.6

620.5 1195.9 1704.5 2550.4 1883.4

537.9 1005.0 1469.9 2023.6 1344.9

2.17 3.43 4.34 6.3 4.30

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Source: Binh (2002).

Proportion of observations

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In terms of the draught power and machinery, Table 6 demonstrates a clear positive relationship between farm size and the use of draught and mechanical power. Farms of more than 10 cong use 37 times the draught and mechanical power used by farms of less than 5 cong. Moreover, although it is not presented in the Table, detailed examination of the data demonstrates that, as in Case 1, relatively larger farms owned more draught animals and machinery and equipment, while relatively smaller farms still needed to hire draught and mechanical power and the labour power necessary to operate it, indicating the emergence of differences in the scale of production across farms. Table 6 shows a positive relationship between yields per hectare and size of farm. Across the sample, the average yield is 4300 kilograms per hectare. This is less than, but consistent with, provincial norms. However, this average conceals variation. The smallest farms have an average yield of only 2170 kilograms per hectare, while farms of 10 cong or more have an average yield of 6300 kilograms per hectare, almost three times as much. Regression analysis indicates that the source of positive relationship lies in the use of draught power and machinery and equipment, along with the use of modern chemical fertilizers and pesticides.12 It should be noted that, as already mentioned, the former inputs are also related to the hiring of labour power, in that labour is required to manage the draught power and run the machinery and equipment. Here a capital-intensive scale of production represents both a means of sustaining accumulation while possibly at the same time precluding the emergence of possible constraints upon that accumulation by limiting already significant reliance upon hired labour. Processes of rich peasant accumulation are clearly linked to ongoing processes of social differentiation. Case 3 The data The data used in this sub-section come from a field survey in five paddyproducing districts responsible for 90 per cent of the rice output of one province of central Vietnam during the period between July and September 2001. The provincial Department of Statistics compiled a list of ten communes within the districts that, on the basis of agroecological conditions and production outcomes, were reasonably representative of the districts as a whole. Within each commune twenty households were randomly selected for the survey with the assistance of government officials. In total, 200 households were finally administered the short closed question survey examining the input choices and output outcomes of the 2000–01 winter–spring paddy crop. From the final data set, eighteen households 12 Using a translog production function to assess the robustness of this finding, the fitted functional form produces an adjusted coefficient of determination of 0.831 (Binh 2002, 46–7). The finding of a positive relationship between size of farm and yield per hectare is statistically significant at a 1 per cent level of confidence, and there is a lack of autocorrelation and heteroscedasticity in the functional form.

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Vietnam’s Agriculture 103 Table 7. Inputs and yields in central Vietnam, winter–spring crop, 1999/2000 Size of operational holding

Less than 10 cong 10–20 cong More than 20 cong Average

Proportion of observations

Family labour as a share of total labour

Hired labour as a share of total labour

Fertilizer, pesticide, draught animal and machinery rental expenditure per holding (VND 000)

Yield per hectare, in metric tonnes

41

82

18

2885

4.64

52 6

44 23

56 77

3834 5213

6.02 7.68

56

44

3579

5.53

Source: Tuan (2002).

were dropped for methodological reasons, leaving a final sample of 182 farm households. The sampling procedure appears to have produced a set of data that is reasonably consistent with that compiled by the Department of Statistics for the annual provincial Yearbook. The results of the survey Table 7 describes the inputs and yields of the 2000–01 winter–spring paddy crop. In the sample, the average size of farm was 11.3 cong. The minimum size of farm was 3 cong, while the maximum was 25 cong. The distribution of farm size is consistent with that found in the five districts as a whole. The distribution of farm sizes displayed in Table 7 shows that 41 per cent of farm households had holdings of less than 10 cong, while only 6 per cent of farm households had holdings in excess of 20 cong. Compared with Case 2, the distribution of farms is less skewed, although farms remain very small in size. In the sample as a whole the average total labour requirement per hectare was 59 days. Table 7 demonstrates a negative relationship between the size of farm and share of total labour accounted for by the use of family labour and a positive relationship between the size of farm and the share of total labour accounted for by the use of hired labour. Thus, whereas farms of less than 10 cong relied on family labour for 82 per cent of their total labour requirements and hired labour for 18 per cent of their total labour requirements, farms of more than 20 cong relied on family labour for only 23 per cent of their total labour requirements and hired labour for 77 per cent of their total labour requirements. In terms of non-land non-labour inputs, Table 7 shows that farmers spent an average of VND 3,579,000 on seeds, fertilizer, pesticides, draught power and mechanical machinery and equipment. There is a positive relationship between spending on non-land non-labour inputs and farm size, with farms of more than 20 cong spending 80 per cent more than farms of less than 10 cong. This indicates the emergence of differences in scale of production across farms.

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Table 7 shows a positive relationship between yields per hectare and size of farm. Across the sample, the average yield is 5500 kilograms per hectare. This is consistent with provincial norms. However, while the smaller farms have an average yield of 4640 kilograms per hectare, farms of more than 20 cong have an average yield of 7680 kilograms per hectare, which is 65 per cent more. In common with Case 2, regression analysis indicates that the source of positive relationship lies in the use of draught power and machinery and equipment, along with modern chemical fertilizers and pesticides.13 It may be noted that while the regression equation does not find a statistically significant relationship between yields and hired labour, draught power and machinery and equipment are also related to the hiring of labour power, in that, as already noted, labour is required to manage the draught power and run the machinery and equipment. The case thus serves to reinforce the centrality of capital-intensity in rich peasant accumulation strategies in rural Vietnam. Case 4 The data The data used in this sub-section come from a field survey in three exclusively paddy-producing districts of one province of the Mekong Delta during April and May 1998. Within each district data were gathered in individual communes and, in the case of one district, a state farm that, based on agroecological conditions, focus group discussions and production outcomes, appeared to be reasonably representative of the district. Within each commune residences were randomly selected for the survey. In total, 100 households were administered the short closed question survey examining the input choices and output outcomes of the 1997–98 winter–spring paddy crop. The sampling procedure appears to have produced a set of data that is quite consistent with that generated by other surveys in the Mekong Delta. The results of the survey Table 8 describes the land, labour and machinery inputs, and yields of the 1997– 98 winter–spring paddy crop. In the sample, the average size of a farm was 14.6 cong. The distribution of farm sizes displayed in Table 8 shows that 50 per cent of the farms in the sample were less than 15 cong, and that only 9 per cent of the farms in the sample had holdings of 25 cong or more. The distribution of farms in the sample is thus broadly similar to that of Case 1, and indeed with the distribution of farms in the Mekong Delta. However, in the sample there was no recorded leasing of land either in or out. Thus, the sample consists of only the Vietnamese equivalent of owner-occupiers. 13 Once again using a translog production function to assess the robustness of this finding, the fitted functional form produces an adjusted coefficient of determination of 0.925 (Tuan 2002, 36). The finding of a positive relationship between size of farm and yield per hectare is statistically significant at a 5 per cent level of confidence. The regression equation is not subject to autocorrelation and heteroscedasticity (Tuan 2002, 37–8).

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Vietnam’s Agriculture 105 Table 8. Inputs and yields in the Mekong Delta, winter–spring crop, 1998 Size of Proportion operational of holding, observations in cong 0–5 5–10 10–>15 15–>20 20–>25 25–>30 30+ Average

19 21 10 3 38 8 1 100

Average area, in cong

Family labour, in days per hectare

Hired labour, in days per hectare

Machinery utilization, in hours per holding

Yield per hectare, in metric tonnes

3.5 6.8 12.0 18.4 22.1 26.0 32.0 14.6

21.51 31.60 51.09 31.75 15.65 9.88 2.00 23.54

10.67 23.45 48.67 62.00 99.72 130.81 146.00 63.50

4.11 5.75 15.91 28.66 41.69 38.99 53.33 23.94

1.39 3.00 5.67 7.77 9.84 10.79 16.00 6.46

Source: Compiled from Thong (1998).

Table 8 shows that an average of 87 labour days per hectare was devoted to the winter–spring rice crop. Although family labour was important for the production of the crop, the purchase of labour-power was very important. Almost 73 per cent of labour requirements of farms were met through the hiring of labour from the local labour market. Although family labour inputs increase with the size of the holding and then start to reduce as farm size exceeds 15 cong, there is also a clear linear relationship between labour hiring and size of farm. In terms of machinery, farmers used modern machinery for an average period of 24 hours during the 1998 winter–spring paddy crop. Table 8 demonstrates a clear positive relationship between farm size and use of modern machinery, with farms of 30 cong or more using more than twelve times the amount of modern machinery of that used by the smallest farms as shifts in the technical coefficients of production reflect alterations in the scale of production towards greater capital intensity.14 Moreover, although it is not detailed in Table 8, closer examination of the raw data demonstrates that larger farms owned more machinery and equipment, while farmers that did not own modern machinery and equipment still needed to hire it and the labour necessary to operate it. Farms that hired modern machinery and the labour necessary to operate it did so from relatively richer peasants, who thus receive income from land, labour and machinery. Table 8 also demonstrates a positive relationship between yields per hectare and size of farm. Across the sample, the average yield is 6458 kilograms per hectare. However, this average masks quite a wide variation. The smallest farms have an average yield of only 1393 kilograms per hectare, while the largest farms have an average yield of some 16,000 kilograms per hectare, a productivity record that is more than ten times that of the smallest farms. Moreover, larger 14 The simple correlation coefficient between average size and use of modern machinery stands at 0.985, indicating the strength of the relationship.

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farms are not just the most productive but are also the farms with the heaviest reliance upon hired labour and modern machinery.15 Given the previous case studies, however, this finding is not surprising, in that processes of rich peasant accumulation are predicated upon the use of capturing enhancements in the scale of production while at the same time deploying production techniques that appear to sustain control of the labour process. Agrarian Class Formation in Vietnam: A Perspective from the Case Studies Using expenditure as a proxy for wealth, the third section (‘Agrarian Transition in Vietnam, 1975–2005’) demonstrated that wealth, productivity and scale of production appear to be correlated in rural Vietnam. Tables 5–8 tentatively reinforce these findings, offering on-the-ground support for the hypothesis that both the technical coefficients of production and yields per hectare can be differentiated on the basis of scale of production. In Tables 6 and 7 there is a statistically significant positive relationship between farm size and yields per hectare. In Table 8 there is a statistical correlation between modern machinery and equipment and yields, and it is, in this light, probable that this correlation may be important in producing the statistically significant results found in Tables 6 and 7. In Table 5, there is an admittedly weak positive relationship between farm size and yields per hectare. Although weak, and not statistically significant, this positive relationship supports the hypothesis that farms with larger landholdings, larger amounts of capital stock and larger use of labour-power, and which are thus large scale, are more productive. Farms with smaller landholdings, smaller amounts of capital stock and lesser use of labour-power, and which are thus small scale, are less productive. There are, within the four case studies, differences in the technical coefficients of production and in the scale of production across farms, and these differences are reflected in productivity outcomes. Thus, the transformation of property rights during the 1980s appears to have led not only to differentiation in access to land, but also differentiation in the technical coefficients of production on farms of different sizes as well as a differentiation of productivity per unit of land. The evidence thus shows the development of a bifurcated agrarian structure. There is an emergent group of relatively rich peasants with larger landholdings, larger amounts of capital stock and larger use of hired labour-power. This can be set alongside a quantitatively larger stratum of small peasants with smaller landholdings, smaller amounts of capital stock and a heavier reliance on family labour. Farm productivity in larger sized farms is becoming linked to the scale of production, rather than the compulsion of survival, and this capacity to shift the purpose of production is made possible by the ability to deploy and benefit from more productive agrarian technology. Finally, if the argument here is correct, the implication of the four case studies is that the separation of producers from productive assets, a process 15 Indeed, the simple correlation coefficient between modern machinery and yields stands at 0.978, indicating the significance of the relationship.

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Vietnam’s Agriculture 107 that is embodied in differential ownership of land and capital inputs and which is responsible for productivity differences amongst farms, is ongoing. Indeed, such an implication is not surprising. Such a process is the key structural feature of the development of capitalism in agriculture, and the evidence presented above on the importance of labour hiring on large-scale farms is certainly consistent with the hypothesis that emergent rich peasants are transforming into capitalist farmers. One last point can be made about the emerging class of rich peasants in rural Vietnam. As has been noted, these rich peasants obtain income from land, labour and machinery. There has thus been a relative diversification of their livelihood strategy. However, this diversification is not one that has been forced upon them. Rather, diversification represents a response to underlying processes that have altered the land and non-land productive assets of the households and has fostered the emergence of partially complete rural labour markets and hence labour-power (Ellis 2000, 55–7). In this sense then diversification is a logical outcome of these processes. CONCLUSIONS This article has examined the process of decollectivization in Vietnamese agriculture during the 1980s, and the impact of this transformation on the organization of rural production. I have argued against the World Bank view that land markets in Vietnam are pro-poor. Regionally specific evidence indicated that access to land was, in some areas, becoming increasingly stratified. At the same time, it appeared that changes in the technical coefficients of production were occurring both across and between farms. The supply response fostered by these changes was demonstrated, and the correlation between rural wealth, access to land and productivity inferred. These findings were supported by evidence from field surveys in rural Vietnam, which indicated that farms of different sizes appeared to utilize different technical coefficients of production, and that these differences in production systems appeared to have an effect on yields. It appears that processes of peasant class differentiation are underway, with the apparent emergence of a stratum of rich peasants with relatively larger landholdings, relatively larger quantities of capital stock, relatively greater recourse to hired labour-power, and larger yields per unit of land. These rich peasants, some of whom may be in the process of becoming capitalist farmers, and who might best be described as proto-capitalists, could be set alongside the great mass of the small peasantry, with relatively smaller landholdings, relatively smaller quantities of capital stock, relatively lesser recourse to hired labour-power and lower yields per unit of land. Sitting below these two peasant classes are the rural landless, whose numbers are swelling as the agrarian transition proceeds. In Vietnam, the World Bank, the state and the CPV have all stressed the need to diversify agricultural production and develop rural non-farm employment (World Bank 1998). As stated by the World Bank, Asian Development Bank and United Nations Development Programme, ‘Vietnam needs to adopt the

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seemingly paradoxical stance of giving a high priority to raising agricultural productivity while recognizing that success can come only as agriculture declines as an employer of labor’ (2000, 12). The findings of this article suggest that an enthusiasm for rural diversification should be set alongside the processes underpinning the diversification process. In other words, is the process of agrarian transition making diversification possible, or is transition making diversification necessary? These two possibilities are in line with Ellis’s (2000, 55) distinction between diversification out of necessity and diversification out of choice. Indeed, the social relations underpinning diversification differ according to the position of the household in the agrarian structure. The fact that diversification by rich peasants is occurring does not necessarily mean that diversification for poorer small peasant households that continue to be engaged in agriculture is to be advocated. If partially complete rural land, labour and capital markets work to favour rich peasants, there is clearly a need for caution when it comes to considering the case for rural diversification in Vietnam. One might finally suggest that if the argument proposed in this article is valid, it bears upon the case for extreme redistributive land reform made by GKI (2002). An extreme redistributive land reform might be secured. However, the equal distribution, once achieved, may be put under great pressure, as processes of social differentiation assert themselves and, perhaps, a form of ‘capitalism from below’ begins to emerge. Byres has suggested: ‘They [GKI] nowhere consider the possibility that the redistributive land reform that they advocate might, if it were successful, lay the basis for capitalism from below; might create structures within which processes of differentiation flourished and a class of capitalist farmers emerged’ (2004, 30). Byres adds: ‘This is a possibility of considerable significance’ (2004, 30). It would seem that the experience of Vietnam bears this out. APPENDIX The Agricultural Reform Process, 1979–2002

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Policy measures

Objectives

Main features

The 1979 sixth Party plenum on ‘some urgent problems in improvement of economic management’

To encourage all co-operatives to fully utilize available resources to boost output and help overcome economic difficulties and food shortages

1. Recognizing the importance of economic incentives in economic development

108

Impacts

The Do Son experiment was recognized and other cooperatives were allowed to 2. Widening the experiment in autonomy of contracting out co-operatives land to members 3. Accepting aspects of for family a market economy, production. Food such as marketproduction determined prices recovered

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Vietnam’s Agriculture 109

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Policy measures

Objectives

Main features

Impacts

Directive 100 of 1981 on ‘Output contracts to labour groups and individuals’

To provide more economic incentives to farmers so that the efficiency of resource use improved, output would grow, and the 1980 food crisis would not be repeated

The co-operative contracted out land to households against an output quota to be returned back. The co-operative retained overall control of the production process. Income distribution shifted from a per head quota to a labour force participation basis

Farmers received greater freedom to allocate family labour and dispose of output in excess of the quota. Farmers’ income improved in both cash and kind

The 1983 Agricultural Tax Ordinance

To unify and rationalize the tax base across the country, to encourage farmers to utilize fallow land, and to expand cropped area by both extensive and intensive means

Agricultural tax shifted from a focus on output and area to a focus on quality, area and average yield. The tax was in paddy, and the rate was fixed at 10% of average output for 5 years. Reclaimed land was not subject to tax for 3 to 5 years

The total sown area increased. Fallow land was brought back into use, and land was reclaimed for annual and perennial crops

The 1986 doi moi (renovation) programme

To transform a centrally planned economy into a state-regulated market economy, in order to surmount an ongoing economic and social crisis

The state officially recognized the coexistence of five economic sectors: state, state capitalist, capitalist, co-operative and private. The leading role of the state sector, and the regulatory role of the state, were emphasized

Agriculture slowed into stagnation, due to inappropriate incentive structures and natural calamities

The 1987 partial liberalization of food trade

To create a national food market capable of meeting planned food consumption targets by smoothing the flow of food across the country, subject to state control

The abolition of the policy of district-level food self-sufficiency in place since the late 1970s. State companies retained their monopoly in the inter-provincial shipment of food

Food imbalances were reduced across the country as food production in surplus-producing regions was encouraged Transaction costs in food trading were greatly reduced

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Policy measures

Objectives

Main features

Impacts

Resolution 10 of 1988 on ‘Renewal of economic management in agriculture’ and Resolution 6 of 1989 on the farm household

To overcome the food crisis of 1987 and early 1988, the management and production of agriculture was to be radically reorganized to encourage rapid growth by transforming the existing structure into a diversified, commodity-based agriculture

The farm household formally became the basic economic unit in the rural economy, with co-operatives acting to support farm households. Cooperatives contracted out land to farm households for 15 years for annual crops, and 40 years for perennial crops. Capital stock and working capital were rented or bought by farm households from co-operatives. Farmers had to pay agricultural taxes and irrigation fees to the government. Output quotas are retained, but eased, allowing farm households to keep a minimum of 40 per cent of average output. The quota was fixed for 5 years. Private food marketing was explicitly recognized

The food crisis ceased. Farmers gained greater control over the allocation and utilization of land, labour and financial resources, and collective agriculture quickly lost its meaning

The trade and price liberalization of 1989

To end the subsidy regime used in the economy, and thus further spur the growth of the market

Most macro- and micro-economic prices were liberalized, albeit to a differing extent. The quota procurement system was ended. Price controls were ended. The exchange rate was devalued. Positive real interest rates were introduced. Internal trade was liberalized. The private sector was allowed entry into a wider range of business activities, except

Agriculture grew rapidly, and in particular rice production, transforming Vietnam from being a net rice importer into being the third largest rice exporter in the world. Farm incomes increased, and rural living conditions

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The rural financial reforms of 1990 to 1995, and in particular the authorization of lending to rural households in 1993

Objectives

The Vietnam Bank for Agriculture and Rural Development (VBARD) was established in 1990 to meet the growing credit needs of farmers, traders and agribusiness The People’s Credit Funds (PCFs) were established between 1993 and 1995 to mobilize idle savings by providing local access to savings institutions, and to provide local access to credit for borrowing households and businesses

The 1993 Land Law and the 1993 land use tax ordinance

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Main features

Impacts

strategic sectors. The private sector was allowed entry into international trade, except in strategic goods such as rice and fertilizer

improved in absolute terms

The VBARD took over the State Bank of Vietnam’s (SBV) rural network of branches and expanded it. Acquiring credit from the VBARD required collateral, and land use certificates were the most commonly accepted form of collateral. Mass organizations were widely used to distribute credit and collect repayments, in order to reduce transaction costs and risk

Private credit’s share in total credit rose from 10% in 1991 to 82% in 1995. Increasing numbers of farms got access to credit, allowing them to sustain the expansion of production, and develop processing, storage and transport capacities. This speeded up the commercialization of agriculture in both the domestic and international arenas. The PCFs and VBP allow many to escape from poverty

PCFs are memberowned and seek to recover the costs of their operation

The Vietnam Bank for the Poor (VBP) was established in 1995 to contribute to hunger eradication and poverty alleviation

The VBP is a non-profit bank that operates through the VBARD network but which receives support from the SBV, in that it operates using SBVsubsidized interest rates

To provide farm households with more rights over contracted land, and in particular to secure long-term

Land tenure was extended to 20 years for annual crops and 50 years for perennial crops. Farm households could exchange,

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The total sown area increased, especially for perennial industrial and export crops.

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Main features

Impacts

tenurial arrangements, in order to improve the allocation and utilization of land, encourage investment, and increase the reclamation of land

transfer, lease, inherit and mortgage land use rights. Households were limited to 3 hectares per farm for annual crops. Agricultural land use tax was reduced from an average of 10% of yearly output to 7% of yearly output. Perennial crops farmed on newly reclaimed land were exempted from tax

Investment in land increased, boosting fertility and yields. The two contributed to high agricultural growth rates

The Price Stabilization Funds (PSFs) of 1993

To stabilize agricultural incomes and consumer supplies during periods of sharp price fluctuations

Exporters and importers were subjected to an excess profit tax. The government used these revenues to subsidize credit for state-owned enterprises (SOEs) so that they would continue to procure when farm gate prices fell and transport inputs and outputs to remoter, food deficit and disadvantaged regions

The procedures for releasing the revenues to the SOEs were complex. Moreover, those SOEs that received resources were not those that bought and sold agricultural inputs and outputs to and from farmers. Thus, the results were poor

Decision 250 of 1998

To allow private companies to export rice

A proportion of the rice export quota was to be licensed to five private companies

State-owned enterprises remained dominant in rice exports

Resolution 6 of 1998 on the farm economy and the 1998 Land Law

To recognize the position of farm households operating holdings in excess of the legal 3-hectare maximum by legalizing the role of land accumulation and larger scale farms in

The operation of the land market was further clarified, with provisions regarding the leasing, transfer, and accumulation of land in excess of 3-hectare ceilings. Legal restrictions on the hiring of labour were to be removed, with

Too soon to say

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The agricultural trade liberalization of 2001

Objectives

Main features

Impacts

the agricultural sector

negotiable salaries between employers and employees. Income tax rates for large-scale farms were to be cut from 30% to 5%

To end the rice export quota and the fertilizer import quota

All firms were to be allowed to export rice and import fertilizer

Too soon to say

Source: Adapted from van Donge et al. (1999); Vietnam Investment Review (various issues).

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