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Urbanisation and Rural Development in Vietnam's Mekong Delta

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Urbanisation and Rural Development in Vietnam's Mekong Delta Urbanisation and rural development in Vietnam’s Mekong Delta Revisiting livelihood transformations in three fruit-growing settlements, 2006–2015 Hoang Xuan Thanh, Dinh Thi Thu Phuong, Dang Thi Thanh Hoa, Le Dinh Lap Ageless Consultants Working Paper Urban Keywords: November 2015 urbanisation, livelihoods, Mekong Delta, rural-urban linkages About the authors Hoang Xuan Thanh, Senior Researcher, Ageless Consultants, Vietnam. Corresponding author: [email protected] Produced by IIED’s Human Settlements Group The Human Settlements Group works to reduce poverty and improve health and housing conditions in the urban centres of Africa, Asia and Latin America. It seeks to combine this with promoting good governance and more ecologically sustainable patterns of urban development and rural-urban linkages. Partner organisation IFAD invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience. Since 1978, we have provided about US$16.6 billion in grants and low-interest loans to projects that have reached some 445 million people. IFAD is an international financial institution and a specialized United Nations agency based in Rome – the UN’s food and agriculture hub. Acknowledgements The authors would like to thank IFAD, IIED, especially Cecilia Tacoli, and the cadres and local people at the survey sites who assisted valuably with the research. Published by IIED, November 2015 Hoang Xuan Thanh, Dinh Thi Thu Phuong, Dang Thi Thanh Hoa, Le Dinh Lap, Ageless Consultants. 2015. Urbanisation and rural development in Vietnam’s Mekong Delta: Revisiting livelihood transformations in three fruit-growing settlements, 2006–2015. IIED Working Paper. IIED, London. http://pubs.iied.org/10751IIED ISBN 978-1-78431-256-5 Printed on recycled paper with vegetable-based inks. International Institute for Environment and Development 80-86 Gray’s Inn Road, London WC1X 8NH, UK Tel: +44 (0)20 3463 7399 Fax: +44 (0)20 3514 9055 email: [email protected] www.iied.org @iied www.facebook.com/theIIED Download more publications at www.iied.org/pubs IIED WORKING PAPER Rapid urbanisation and industrialisation have had multiple impacts on rural Vietnam since economic reform in the mid-1980s. In 2006, the authors conducted a study of the social and economic transformations in three rural settlements in the area often described as Vietnam’s rice bowl and where livelihoods and the nature of the local economic base, including farming, had changed radically. All could be described as success stories, especially when compared to other rural areas in the Mekong Delta region. Almost a decade later, this paper revisits the same settlements and describes their social and economic evolutions and the key factors that help decipher three distinct but similar trajectories. Contents Executive summary 4 5.4 Cooperatives 33 5.5 Enterprises 34 1 Introduction 6 5.6 Supermarkets 35 1.1 Objectives 6 5.7 Wholesale markets in cities 35 1.2 Methodology 7 6 Factors affecting livelihood transformation 2 Urbanisation, migration and evolving and market access 37 rural–urban linkages in Vietnam 8 6.1 Fruit cultivation techniques 37 2.1 Overview of the study settlements 11 6.2 Market information 40 6.3 Capital 40 3 Livelihood diversification 14 6.4 Land 41 3.1 Agricultural activities 14 6.5 Infrastructure 42 3.2 Non-agricultural employment 17 6.6 Sanitation conditions 42 3.3 Outcomes of livelihood transformation 20 6.7 Climate change 43 4 Labour mobility 23 7 Conclusions 45 4.1 Out-migration and mobility 23 4.2 In-migration 25 Annex 1: Overview of the fruit industry in Vietnam 47 5 Market access 26 5.1 Market chains 26 Annex 2: Characteristics of the specialty fruits 5.2 Fruit farmers 28 in the three study settlements 56 5.3 Private traders 29 www.iied.org 3 URBANISATION AND RURAL DEVELOPMENT IN VIetnam’s MEKONG DELTA Executive summary Rapid urbanisation and industrialisation have had while the quality of fruit has improved, thanks to better multiple impacts on rural Vietnam since the economic techniques and also driven by demand, the trade and reforms in the mid-1980s. In 2006, the authors marketing system has hardly changed since 2006. conducted a study of the profound social and economic The close relationships between private traders and transformations in three rural settlements in the area small-scale farmers remain the basis of local economic often described as Vietnam’s rice bowl, and where development. With improved transport infrastructure livelihoods and the nature of the local economic and with most farmers now owning motorbikes, which base, including farming, had changed radically. Rice allows them to transport fruit to traders’ warehouses, production had virtually disappeared, giving way to the role of traders who collect fruit at the farm gate fruit orchards, and fruit acted as the key driver of has declined. However, the role of large traders in the diversification of the economic base of the study settlements has become even more important, as they settlements. Rising urban (and rural) demand for fresh collect about 70 per cent of the total fruit production, fruit and vegetables was supported by increased similar to the 2006 levels for Vinh Thoi, the market node, average incomes, reflecting Vietnam’s success in but much higher than the approximately 20 per cent at reducing poverty. At the same time, employment in the time in the other two settlements. the growing industrial and services sectors absorbed As noted in 2006, what makes private traders more large numbers of increasingly mobile rural residents, successful than cooperatives and government initiatives especially but not exclusively the young, contributing is their flexibility and the access to a wide range of final substantially to rural incomes and to rural households’ markets, as well as the resilience of the ‘traditional’ capacity to invest in high value agricultural production. markets of which they are part. Supermarkets, which Within the three settlements, the expansion of non- in 2006 seemed to be on the verge of transforming farm activities related to fruit (processing and trade) domestic markets, have been far less influential than opened up opportunities for wealthier and poorer expected; in part, this is because they cannot offer the groups alike. This increasingly blurred distinction advantages of private traders. between ‘rural’ and ‘urban’, whereby the complementary links between different sectors (agriculture, trade and In all three study settlements, population has grown and services) not only become stronger but also take place non-farm employment opportunities have increased, within the same space, contributed to local economic either locally or within a short distance. Living conditions growth and poverty reduction, albeit with widening have also improved, and the official poverty rates income inequality. have declined substantially. Farming has remained an important activity, and even the most ‘urbanised’ village, In 2006, all three settlements could be described as Vinh Thoi, maintains a close connection with farming success stories, especially when compared to other through its role as a market node specialising in fruit. rural areas in the Mekong Delta region. However, Moreover, in all three settlements, farming is almost the study also pointed out that maintaining the exclusively of speciality fruits, which are well-adapted to momentum would depend not only on the capacities local conditions and fetch high prices. However, farming of local residents and enterprises but also on wider is the sole income source for only a small and shrinking socioeconomic transformations. Almost a decade later, minority of residents, and their number has decreased this paper revisits the same settlements and describes sharply since 2006; now almost half the households their social and economic evolution and the key factors have relatives who work in industrial zones, compared that help decipher three distinct but similar trajectories. to less than 20–30 per cent in 2006. The number of All three settlements continue to be success stories of households that have developed non-farm income- synergetic rural–urban development. Speciality fruits, generating activities within the settlements has also almost exclusively for the domestic market, remain the increased substantially, and this is especially important key economic activity in the three settlements, and for low-income groups that have little, if any, access to 4 www.iied.org IIED WORKING PAPER productive land. The nature of waged employment has basis for successful local economic development. At the also changed, with an increase in jobs related to fruit same time, access to non-farm employment within the processing and grading and services, but with a decline settlements and within commuting distance has reduced in agricultural wage labour. With general improvements the need to migrate to the cities, while retaining the in incomes and living conditions, inequalities have also all-important access to non-farm income that supports increased. Land and family labour remain crucial assets, investment in high value fruit production. and better-off groups engage in social mobility by At the same time, new challenges have emerged. The investing in higher education for their children. first regards quality standards (GAP) in production, Migration remains an important component of which still seem to be out of reach for most producers livelihoods, but is gradually being replaced by because of high registration costs
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