Rice prices - Viewed from Vietnamese fields


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I just returned from the Mekong Delta – Vietnam’s “rice basket” – to look at the results of development projects partly financed by the World Bank. With rice prices going through the roof, I expected to see farmers enjoying a financial boom. But, reality was more nuanced and underscored how difficult it is to grow more rice at the drop of a bamboo hat.

One of the projects I looked at improved water management in the delta by upgrading canals and building more gates (known as sluice gates). The idea is to prevent water from the sea from intruding and ruining crops in the dry season; and stop floods from washing away the harvest during the rainy season. The results have been dramatic.

Better irrigation and more security have allowed farmers like Ngo Kim Tan, 64 years old, in Can Tho province, to plan ahead and plant more crops. Keeping salt water out has translated into tastier fruit and higher rice yields. Her rice yield has gone from about 700 kilos of rice per “cong” (1,000 m2) to about a 1 ton per cong. Meanwhile the price of paddy has been multiplied by 1.5 in one year (from 3,000 VND per kilo to 4,500 VND – about 28 cents ofa US$ - this year).

Ngo Kim Tan is expanding her house.
Her income has doubled, she says. Feeling flush, she has decided to extend her house. The addition will go to whichever child gets married first. Inflation, though, is denting her happy bubble. The price of bottled gas has gone up drastically (from $12 to $20 per month) and so has the price of food she buys at the market.

The price of fertilizer, pesticide, fuel – and the uncertainties linked to climate, the environment and plain old luck, kept most farmers I talked to cautiously optimistic.

Doan Van Den, a 48 year old farmer whose land borders a secondary canal protected by a new sluice gate in Kien Giang province, spoke about his switch from harvesting rice once a year, to two crops of rice and one vegetable crop. Like his neighbors, he has seen his yield increase since the network of canals and gates has been completed. “Our income has increased. But when we grow rice more intensively, it costs more in fertilizer. We’ve benefited from prices going up but we’re still very poor.” The father of eight children sat in a simple thatched-roof house with a mud floor. He served us tea made with water from the murky Mekong River – there was no running water. “We can’t afford to fix the house yet.

Doan Van Den (shown here with his children) has benefitted from rising rice prices but is still very poor.
One farmer who tried growing three rice crops, suffered losses last season because of pests. “If you plant rice continuously it tires the land, so the yield is reduced,” said Trinh Van On, 53 years old, in Soc Trang province. “You need double the amount of pesticides and fertilizer for the third crop because the land is exhausted.”

As I traveled on the small roads and waterways that connect farmers to markets in the delta, I kept wondering how the environment would with-stand the pressure to grow more rice. If better irrigation allows rice intensification but intensification pollutes the very water that sustains the delta’s life and fields, how do you maintain a sound balance between food production and water quality?

The Ministry of Agriculture’s advice to farmers has been to stay away from rice intensification to keep pests and disease in check. Two rice crops and one cash crop allow the land to rest more than three rice crops with no break. The advice has been to reduce three inputs: the amounts of seeds, pesticide and fertilizer – by applying new seedling techniques, fertilizing land more accurately, and using water and other techniques to get rid of pests.

Since I’m no agricultural expert (more of an in-house journalist reporting on development impact), I wonder what safeguards are really in place to avert the kind of rush to solutions that have perverse effects so often. Will sustainable farming practices survive the pressure to produce more and more food? It would be nice to feed the planet without killing it…

The sluice gate, at left, helps manage water flows to farmers' benefit.


Flore de Préneuf

Senior Communications Officer

Join the Conversation

Richard Chisholm
April 14, 2008

Its interesting to see the responses to high food prices in terms of policy recently. Its all about short term solutions rather than addressing the fundamentals. Somehow the development community seems to have come to the conclusion that there is no more life left in agricultural improvement to solve the problem. Not surprising I suppose, when so few Agricultural technical specialists have been hired by the Bank over the past 10 years.

In fact there are lots of things that can be done in improving rice productivity, but they have to happen in Asia where rice is grown on large areas now, as well as Africa in the medium term.
For starters, Asia has adopted high yield varieties on an average 75% of crop area. In Laos, however, only about 2, perhaps 5% of the area is cropped with such lines. In Cambodia, between 11 and 15%. In many remote areas, just replacing seed that has been constantly replanted without reselection can add 3-40 % to yield.

Then there is the fertilizer problem. Sure the absolute rates of application are high- maybe too high. But most of it is urea ( nitrogen), a little is phosphorus but scarcely any is Potassium. Micronutrients are hardly used at all because there are no consistently reliable publicly available soil test labs and because the investment in agricultural outreach has been neglected for years. Instead, in places like the Philippines, subsidies have bred complacency in research funding.

Cutting back on urea to pay for more potassium and micronutrients could be an environmental win-win too. In China, for example, potassium deficiency accounts for about 12% of the yield gap . But farmers use nitrogen at up to half a ton per hectare!- because they don't always have good extension and outreach and because potassium is in short supply . Most has to be imported from Canada. The result is that the excess nitrogen is contaminating water bodies, particularly in Yunnan.

In Indonesia, though, the situation is worse. On rainfed areas of central Java, potassium at adequate rates boosted yields 58% in trials over a five year period. Similarly, responses are seen in a range of IRRI sponsored long term trials across Asia. Dr Swaminathan,a former Director of IRRI, predicted these problems ten years ago.

Of course irrigation systems are only about 40-50% efficient in water delivery and could benefit from not only farmer control of allocation but also a range of canal and system modernization investments.

We need to look seriously at a partnership between the Bank, bilateral agencies and IRRI to address these simple measures to improve yields. Cambodia and Indonesia should be joining the exporters club again in the next 5 years. China could boost rice yields at least 5-10% over that time on massive areas.

The solution is a combination of long term policy, services and technology. Not short term patches.

Flore de Préneuf
April 15, 2008

Thank you for your thoughtful comment. It's reassuring to hear there are so many well-documented ways of increasing yields in Asia without busting the environment. The Vietnamese officials I spoke to seemed well versed in these areas and genuinely keen on balancing environmental and development demands. Irrigation modernization was an inspiring example - and by no means an overnight achievement (the Mekong Delta Water Resources project I looked at was conceived 10 years ago but only closed last year.)

A second project I looked at during my trip to the Mekong - mangrove forest plantations to fight coastal erosion - showed, again, a positive correlation between long-term green approaches and increased yields for fishermen and farmers alike. (Because fish, shellfish, clams breed in the mangrove. And crops are shielded from winds and storms by a new buffering layer of trees.)

Dayo Mejabi
April 19, 2008

The world-wide increase in rice prices has benefitted Nigerian farmers tremendously. This has been a great season for rice farmers. Question is - for how long will it stay this way?

Dupe Aina
May 11, 2008

Bros C,
Thanks for this information. I hope for a long time and I hope the govt & farmers are seeing the benefits of agriculture and realize that the way forward is being agriculturally self-sufficient. This will result in great growth for the country and improve its socioeconomic indicies as opportunities for employment will result from this move. More cash crops need to be produced and we need to de-emphsize oil and its polluting by-products and emphasize agricultureal growth and employment opportunities and the dignity of the blue collared worker.

Charles Howie
June 19, 2008

Hi Flore.

Interested to read of your statistical doubts. Im writing up some field work on yields and inputs and there are a couple of little pit falls you may be unaware of:
1 Area. Farmers with only a couple of hectares of land or less often express area in công, which is 0.1 hectare, but there is also an older measure, the farmers công which is about 0.12 of a hectare, and before that there was a previous unit, old farmers or government công, (and I cant find the definition of that today, but its babout 960sq metres). Many farmers in An Giang Province, where I have been working, express their land area in farmers công
2 In addition ,yields may be expressed in 'gia', a basket of 40 litres, rather than kg. The weight in here will depend on variety, water content and how much chaff there is in there as well. When farmers are calculating the cost of their inputs they may express each one as a number of gia, including labour, getting water out of the field and getting it in again, harvesting and transport, repairing the dykes.

So, don't get too upset by this lack of clarity, no ones trying to pull the wool over your eyes--there are lots of transformations going on along the line. I dont think its so much self deception, as an amazing ability to do mental arithmetic and round up, or down, inconvenient remainders.

I try and work by making comparisons, % increse or % decrease, rather than use absolute figures.

I hope this helps, but it may welll bring on another grey layer of statistical confusion!

June 23, 2008

Thanks for sharing that. I didn't know about the difference between farmers' congs and standardized congs. Makes sense. It did seem wonderfully coincidental that an ancient local measuring term would be exactly one tenth of something metric. The difference was lost in translation.
Like you, the thing I take away is the importance of looking at trends. Farmers I talked to reaped about 20% more rice (chaff and all) than in the past and were visibly happy with the stability and predictability of harvest now that water flows are under control. Good luck with your research.

Charles Howie
July 02, 2008

Hi Flore
Thanks for your response. I guess the farmers in the Mekong Delta will be even happier now. According to the Vietnam Daily News (http://vietnamnews.vnagency.com.vn/showarticle.php?num=01AGR100508)in May 2008, the price farmers are getting had reached 5,000VND per kg. This is more than treble what it was in 2001. Even allowing for inflation and the relative decline in the world wide value of the USD (to which the Vietnamese dong is pretty well tied), I guess this price represents a substantial increase in farmers' incomes. I am looking forward to returning next year to see what impact this will have. It will impact on everything, economic, social and most of all the environment in the Mekong Delta.
Are you due to return there soon?