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Synthesis/Regeneration 26   (Fall 2001)

Thinking Economically

Vietnam and Philippine Agriculture Fall
Prey to Globalization of Land Rights

by Shirley Nuevo, IBON Foundation

What awaits socialist Vietnam in a highly globalized economic environment?

Since the start of the doi moi (renovation) in its agriculture sector in the eighties, Vietnam developed from a food deficit nation to one of Southeast Asia’s most active food exporting countries. A key factor then was the country’s agrarian reform program and “cooperativization” of farm production. Now, socialist Vietnam is moving towards a radical reform: opening up land control to foreigners.

The Vietnamese government believes such a step would bring more investment to agriculture and pump up the lifeline of the economy.

…Vietnam is moving towards a radical reform: opening up land control to foreigners.

But peasant groups within and outside Vietnam are wondering whether the country is stepping in the right direction. Close comparison with the Philippine situation, for instance, would prove that things might not turn out as expected.

Land to foreigners?

With the vigorous implementation of capitalist reforms in the Vietnamese economy, like legal guarantees to foreign investments and the sale of government-owned assets, many foreigners have been tempted to invest in a “renovated” socialist Vietnam. Still, many remained unsatisfied. Creditors and foreign investors have repeatedly criticized the government for the slow pace of reforms. Many, in fact, have threatened to withdraw investments from Vietnam.

In a bold bid to keep the investors, the government is staking its lands via the new law.

Like its neighbor the Philippines, Vietnam does not allow foreigners to own land. But the setup is bound to change as soon as Vietnam’s legislature, the National Assembly, passes the new land law.

Under the proposed law, foreign investors in Vietnam will be allowed to buy land-use rights from government or commission Vietnamese farmers to produce specified crops by forming joint venture agreements with them. Foreign partners are expected to provide technical and financial assistance, while local farmers will offer their land and provide labor.

The proposed law will virtually transfer land control from farmers to foreign agro-investors. Similar arrangements are common in the Philippines, where the contract-growing scheme has been widely practiced in the last two decades.

Contract growing in the Philippines is an arrangement in which an agriculture-based foreign company transfers farm production processes to local independent farmers or farmers’ groups. The foreign partner normally specifies which crop to plant, impose a standard quantity and quality and dictates the price of the crop.

Contract growing has been widely practiced in large plantations, particularly in Mindanao and the Visayas. Local peasant groups like the Kilusang Magbubukid ng Pilipinas (KMP) criticize the practice for driving many farmers to bankruptcy and perpetuating unfair labor practices against agricultural workers.

Similar views

Recently, the KMP shared the views of a visiting Vietnamese economist here that the proposed land law in Vietnam may bring in more adverse affects than boost the country’s agriculture.

In a series of lectures given in the University of the Philippines in Diliman early this month, Dr. Bui Tat Thang, an economics professor from Hanoi University, attributed to the cooperative program Vietnam’s ascent in the nineties as one of the region’s biggest rice-exporting countries.

… the opening of land control to foreigners would pose a serious threat to food security

In 1996, Vietnam’s agriculture sector comprised 29% of its gross domestic product (GDP), much bigger than the Philippines’ 22%. In the same year, Vietnam’s rice production reached 28 million metric tons, more than double the Philippines’ 11 million metric tons. This despite the fact that agricultural land in the Philippines, which comprises 31% of the total land area, is far bigger than total agricultural land in Vietnam which comprise only 22% of its total land area.

Vietnam’s land reform and agricultural production policy spelled the big difference.

Although both countries were deeply entrenched in feudalism as a result of western colonization-Vietnam by the French for almost a century and the Philippines by the Spaniards and Americans for almost 400 years—Vietnam was able to free itself from the clutches of feudalism much earlier.

Land in Vietnam is owned by the state. The assumption to power of the Communist Party, first in Northern Vietnam in 1954 and later including South Vietnam in 1976, boosted land reform at a vigorous pace all over the country.

Vietnam’s land reform program, implemented for a span of 6 years in the North and 5 years in the South, has effectively ensured land for every Vietnamese tiller. Private ownership of land was eventually abolished and instead the people were allowed to secure land use rights for a specified period.

This is a stark contrast to the dismal seven decades of land reform in the Philippines, starting under the American colonial government. Until now, the biggest land parcels in the Philippines were owned and controlled by less than 5% of the entire population.

Yet despite his country’s impressive agricultural performance, Dr. Thang said the Vietnamese government is open to foreign investment in agriculture. But he was quick to point out that not all Vietnamese, particularly farmers, were as interested.

The Vietnamese government’s eagerness to tempt foreigners to invest in agriculture is driven by the desire to produce more for the international market and to modernize further its agriculture sector through technology transfer, according to Dr. Thang.

Vietnam’s agriculture directly employs about a third of its entire population. Undeniably, the effects against Vietnamese peasants would be great should foreigners be allowed to directly buy land-use rights from the government or form joint venture agreements.

The passage of the law would also entail the abandonment of the impressive gains of socialist

Vietnam’s land reform program. In the long run, the opening of land control to foreigners would pose a serious threat to food security since foreign investors will be more interested in producing export-viable crops than staple crops.

From a food sufficient country in the early sixties, the Philippines has been transformed into a grains-deficit country, particularly in the last two decades as transnational corporations and big agribusiness for export took over the agriculture sector.

Poor agriculture-based nations—“socialist” and non-socialist economies alike—are clearly the biggest casualties of this free trade setup.

This article is printed with permission of IBON Features, a weekly news and feature service on local and global issues of IBON Foundation, Inc.

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