Minutes of the ISG Plenary Meeting 2003
"International Integration and Development of Rural Areas"

Introduction of the Plenary Meeting and participants

Dr. Le Van Minh, MARD ICD Director General, Director of ISG Secretariat: the ISG Plenary Meeting 2003 entitled "International Integration and Development of Rural Areas" is an important step of the continuous policy dialogue between Vietnam's agriculture and rural development sector and the community of international donors, NGOs, and scientists. The maintenance and further development of the ISG forum showed the efforts of MARD and commitments by the international community to the sustainable development of the sector. Open sharing of ideas/initiatives at this forum would create a model for partnership-based cooperation.

The recent progress of agricultural production in Vietnam and its integration into ASEAN and world trade as well as perspectives of Vietnam's accession to the World Trade Organization (WTO) have laid out new challenges to the agriculture sector. These challenges also face many developing countries, the agricultural sectors of which are often vulnerable in the context of current patterns of the globalization. Vietnam's efforts to address the challenges are made with the support of the international community not only in terms of investment and transfer of know-how but also through frank and constructive dialogue and discussion just like ISG forum.

On behalf of the organization board of the Plenary Meeting, Dr. Minh introduced the Chairmen of the meeting, including H.E. Mr. Le Huy Ngo, MARD Minister, H.E. Mr. Joe Thwaites, Extraordinary and Plenipotentiary Ambassador of Australia to Vietnam, Mr. Alessandro Pio, Officer In-charge, ADB Mission in Hanoi, H.E. Dr. Bui Ba Bong, MARD Vice Minister; and Dr. Le Van Minh, ICDMARD Director General and also the Director of ISG Secretariat.

Participating in the plenary meeting were around 200 participants as representatives from international donors, NGOs, national relevant agencies, non-state organizations, and news agencies.

A tentative programme of the meeting was introduced and then approved by the Chairmen and the participants, becoming the official programme of the meeting.

SESSION 1:
FURTHER RENOVATION UNDER THE CONTEXT OF GLOBAL INTEGRATION
(Chaired by H.E. Mr. Le Huy Ngo, MARD Minister)

Opening Speech by H.E Minister Le Huy Ngo

In the opening speech "Integration of Vietnam's agriculture for poverty reduction and rural development", the Minister highlighted two issues: (i) the key achievements of agriculture and rural development in Vietnam over the past three years, and (ii) directions for further development in the time to come.

1. The most considerable achievements:

Since the implementation of the renovation policy (1986), Vietnam's agriculture has maintained a stable average growth rate of 4.5-5%. The most considerable achievement is that Vietnam's agriculture has been shifted from a self-sufficient production to an export-oriented agricultural commodity production one.

The important change in rural areas in Vietnam was enabled thanks to the further development of household and farming economy, and recently small and medium enterprises (SMEs), which have been encouraged by the Government to develop in parallel with all other economic sectors.

The livelihood particularly in remote and mountainous areas has been significantly improved. Over the past years, the Government's poverty reduction strategy has been very successful in rural, remote and mountainous areas. Rural infrastructure has been much strengthened, particularly power supply to rural areas, construction of roads, clinics, schools, and communication facilities, which contributed to improved livelihood, stabilised socio-political situations and to the increase of GDP for the whole economy.

Those achievements were attributed firstly to the renovation policy in agriculture and rural development, which focuses on commodity agriculture with the efforts of the farmers, farms, enterprises, and economic sectors involved in production and rural development. They were also attributed to the policy regarding markets, thanks to which farmers can choose on their own how to consume their agro-products, and also receive great support from the State in exporting their products. Rural areas are still the first priority of the Government, including priority in construction of hydraulic works, programme on animals and seedling, transferring of advanced science and technology to farmers, and extension activities linked to poverty reduction. Those efforts were jointly made by Vietnamese farmers, rural small and medium-scaled enterprises, including household and farming economy, and also by the support of the international community to farmers and rural areas. At this forum, on behalf of them, the Minister extended sincere thanks to the donor community and hoped that the cooperation would further develop.

2. MARD's priorities in the time to come for agriculture and rural development

• To constantly build a strong commodity agriculture producing diversified products with high value and competitiveness in the regional and international markets. This may be the biggest challenge to MARD in view of Vietnam's increasing integration into international markets.
• To continue rural development and poverty reduction programme, develop the economy in remote and mountainous areas to help them improve living standards, avoiding big gaps between rural and urban areas, and between remote, mountainous and delta areas. These have received a special priority from the Prime Minister and the Government.
• To prepare for the international integration of Vietnam's agriculture, some issues need further renovation as follows:
  • Reform for an efficient governance system;
  • Reform for the research and know-how transfer system for effective application of advanced technology and science (in terms of production and management);
  • Reform for an agriculture production system appropriately structured and better protected against natural disasters and market fluctuations; and
  • Reform for a better-performing rural service system (both for production and management).

The Minister stressed that those were the strategic directions that MARD would like to share with the international donor community in order to build a consensus on, problems to be addressed and potential solutions to support the sector. The Minister was confident that the active and constructive participation of the international donors at the ISG forum would open up new opportunities and bring more success to the cooperation between the sector and the donor community.

The address by the Minster was accompanies by a paper prepared by the meeting organization board briefing on main achievements of Vietnam's agriculture in 2003 and the policies on agriculture in the time to come.

Questions and answers

Mr. Nguyen The Dzung, Operation Officer, WB: each year in rural areas of Vietnam, there are more than 1 million new laborers that need jobs in the time to come, while the agriculture can provide just about 200,000 to 300,000 new jobs. What are MARD's directions to address this burning and long-term problem?

Mr. Pradeep Itty, 1st Secretary, SDC, Embassy of Switzerland: For many donors and INGOs working in Vietnam, the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) has laid out a good framework to cooperate with Vietnamese partners, and MARD has contributed many good inputs into the CPRGS's preparation. Now MARD has established a Thematic Ad-hoc Group 3 (TAG 3) on Support the implementation of CPRGS in agriculture and rural areas under ISG. So what are the action plans and priorities that MARD are working on to implement the CPRGS within MARD?

Mr. Pieter Smidt, Sr. Project implementation Specialist, ADB Mission in Hanoi: what is the role of the Ministry for the multi-national companies to support the development of agriculture sector in Vietnam, especially in the context of international integration?

The Minister's answers:

• Rural labors and jobs: Rural job creation is now one of the most urgent matters, beside the income increasing issue. What should be done now is to immediately create jobs right in rural areas, firstly to shift the structure of plants, animals, and to develop rural industries. MARD pays its great attention to development of rural trade villages, agro-product processing industries, production and exporting of handicrafts. New jobs are also created, through development of aquaculture and forestry plantation.

  MARD also promotes the development of rural industrial zones and a number of results have been produced. Each province, each district use a certain amount of land for construction of small industrial zones, in order to attract enterprises of all economic sectors to the rural areas. Those enterprises will be given priorities in terms of lands and infrastructure. By that way, more jobs can be created for rural people. Additionally, MARD also proposed to the Prime Minister that all industrial constructions such as Son La Hydro-Power Construction, hydraulic works, large factories should give priority to the use of local rural labors.

  With those efforts, annually the sector created would be able to create about 1.2 million new jobs. In reality, a lot of difficulties are still ahead.

• CPRGS is a very important strategy of the Government. MARD advocates some following issues:
  • Allocate lands to the poor for carrying out production to generate incomes by readjusting lands in agro-forestry farms, and some of the forest lands not yet used.
  • Support farmers to expand some industries especially breeding, forestry plantation and support them to buy breeds and seedling.
  • Attract farmers to get involved in such big projects as rubber plantation in the South, tea plantation in the North, reforestation of five million hectares for additional income. MARD has a separate programme to support agro-extension, transferring of breed and seedling, small irrigations, and small processing in order to generate income to reduce poverty.
• The role of international companies: at present, direct investment by international companies to agriculture is still low. Even though many international companies are still uncertain about the land policy, risks or rural infrastructure issues, there are a lot of international companies successful in Vietnam. From these companies, Vietnam can learn a lot of experiences regarding the models and methods for management of agriculture. This is one of the very important factors to the agriculture sector. MARD expects the concerns and direst investment from the enterprises to agriculture, and will support them.

SESSION 2:
MARD ORGANISATION & RESPONSIBILITIES
(Chaired by H.E. Mr. Le Huy Ngo, MARD Minister)

Main Presentations:

1. Mr. La Van Ly, Director, PAR in MARD Project (VIE/02/016) made a presentation "Decree 86/2003-ND-CP dated 18th July 2003, and MARD's public administration reform process".

In the presentation, Mr. Ly talked about two issues:

Some main changes in the functions and organizational structure for all Ministries in accordance with Decree 86 dated 5 November 2002 by Government:

• A ministry is a Government body member that (a) performs the state management functions over the branches nationwide, (b) performs the state management over public services in these branches, and (c) represents the state in the State Owned Enterprises.
• Separation between state management functions (11 functions) & public service delivery functions.

Introduction of some main changes to the organizational structure of MARD.

In terms of functions and duties:

• Water resources management over the country transferred to MONRE.
• Salt production: MARD.
• Settlement and New Economic Zones: Government's Committee on Mountainous and Ethnic Minorities Groups

In terms of organization:

• New Departments include Legal Department; Department of Cooperatives and Rural Development (on the basis of grouping together Department of Agriculture and Rural Development Policy and Department of Settlement & new economic areas); Department of Agriculture (on the basis of the Department of Agro-Forestry Extension divided into Department of Agriculture to perform state management functions and the National Centre for Agro-extension to perform public services delivery functions); Department of Scheme Construction Management (on the basis of the Capital construction & Investment Department, an advisory Department become an operational department).
• Public Services delivery Agencies: National Agro-Extension Centre; Informatics Centre (former ICARD); Rural Water Supply and Sanitation Centre;
   

2. Mr. Daniel Bollinger, STA, VIE/02/016, made a presentation "Provincial DARD restructuring issues"

In the presentation, Mr. Daniel Bollinger mentioned four issues: (a) a need of organisational improvement; (b) General organisation of DARD and SARD; (c) Why provincial agriculture services are they organised in this way?; (d) and Some proposals for improving DARD's efficiency.
 

Discussion:

Mr. Pieter Smidt, ADB: What about the appointment of DARD Directors? Does it conflict with the policy of decentralization? What are the distinctions between state management functions and public services providing functions at provincial level?

Mr. La Van Ly's answer:

The appointment of DARDs' Directors still depends on a Government decree on decentralization between the Government and the local authorities. This decree will be approved by the Government in its next session. On that basis, the appointment of DARDs' Directors as well as of the Directors of other provincial Departments will be decided.

The management over the implementation and delivery of public services in localities will also be specified in the above-mentioned decree on decentralization. The management and delivery of public services will of course be mainly managed by the local authorities.

3. Mr. Nguyen The Dzung, Operational Officer, WB made a presentation titled "Vietnam: rural development strategy update".

In his presentation, Mr. Dzung briefed about the objective and focuses of the update which is to orient and guide WB investment & sector work to support Vietnam's rural development.

The strategy will help the Government of Vietnam/MARD to establish a clear, long-term and consistent vision on priority directions of Vietnam's agriculture and rural development to further develop its partnership with the WB. Particularly, it will contribute to efforts of the Vietnamese Government to formulate a strategy for agriculture and rural development and update the CPRGS for the next five years.

The Bank expects to receive strong cooperation and collaboration of MARD and other donors and NGOs through the mechanisms of ISG and TAG 3.

Mr. Le Quang Binh, Program Coordinator, Oxfam Great Britain: will the WB's exercise touch upon the impacts of trade liberalization to agriculture of Vietnam, and especially to the poor and women?

Mr. Nguyen Thanh Tung, Programme Coordinator, CARE International Vietnam: Over the past few years the people's organizations such as the rural community-based organizations, NGOs, professional associations and mass organizations have greatly contributed to the socio-economic development in Vietnam. The WB-led policy update study should look also at the issues of grassroots democracy and participation of people's organizations in implementation of the CPRGS?

Mr. Dzung answered:

• The Bank has already been carrying out some studies on the impacts of trade liberalization and Vietnam's accession to WTO and possible overlapping shall be avoided. However, relevant results of the studies will be drawn upon in the update, say impacts of trade liberalization and WTO accession to less developed regions.
• The study would try to explore issues related to producers' associations in the rural sector, as this has been recognized as a weak element in existing value chains. WB would welcome cooperation/collaboration with CARE Vietnam and other NGOs.

SESSION 3:
THE SECTOR'S ROADMAP FOR INTERNATIONAL INTEGRATION
(Chaired by H.E. Mr. Joe Thwaites, Extraordinary and Plenipotentiary Ambassador of Australia to Vietnam)

4. Mr. Alan Oxley, CTA, Strengthening Capacity for Agriculture and Rural Development Sector on International Integration, funded by Australian Government made a presentation titled "Global Integration of Vietnam's agriculture; The impact of the WTO Cancun meeting"

In his presentation, Mr. Alan mentioned two important issues:

• Global Integration of Vietnam's agriculture:
  • Brief picture of WTO and agriculture
  • Brief summary of WTO rules on agriculture
  • Brief description about what happened at Cancun
  • What does it mean for Vietnam's accession?
• The impact of the WTO Cancun meeting:
  • The breakdown was unexpected, because developing countries, not all but a very large number, particularly African countries and some Asian countries. Developing countries refused to agree that there should be negotiations on transparency in government procurement and trade facilitation - these were not significant trade issues.
  • What was proposed on agriculture: A framework for negotiations which set out: - targets to reduce tariffs, domestic support and export subsidies, - dates by which these targets were to be achieved, - special terms for developing countries.
  • What does it mean for Vietnam's accession?
    Accession process unchanged; Terms of China's and Cambodia's accession should be studied closely- likely to be less demands on developing economies;
  • Guiding principles for Vietnam: Follow model of WTO Agreement on Agriculture - Cancun negotiations showed future rules will be based on the Agreement; Set domestic policy targets for integration and tailor approaches to WTO to them.
     

5. Pieter Smidt, ADB Resident Mission and Dominic Smith, Agrifood Consulting International made a presentation titled "Agricultural Science and Technology: A Vision to Address the Challenges of International Integration"

The presentation touched upon five issues:

• Why International Integration is important to Vietnam's Agricultural Sector;
• The Importance of Agricultural Science and Technology in the context of International Integration;
• Future of the Agriculture Sector in Vietnam;
• Vision for Agricultural Science and Technology; and
• Comments on how donors are supporting and realizing the Vision.

   

Discussion:

Mr. Daniel Bollinger, STA, VIE/02/016:
Attention should be paid to the aims of extension activities in coordinating projects working in the same fields, which is appropriate to farmers' needs.
In the project, what should be done? How to do to attain out set objectives?

Dr. Le Van Minh:

• Under the ISG framework, TAG 3 on support of implementation of CPRGS in the rural areas has been established, with ToR approved by the ISG Steering Board. A technical coordinator has been appointed for the TAG 3.
• The proposal by Mr. Bollinger was one of the tasks of the TAG 3.
• Expressed thanks and gratitude to the Australian Government for supporting the agriculture and rural development sector in the context of international integration.
• Also expressed thanks and gratitude to ADB for their strong support in the research activities of MARD. MARD is now preparing a new TA supported by ADB for dealing with research activities in the sector.

Mr. Rob Swinkels, from WB: what are particular plans/ideas/ how to improve the research particularly for the uplands areas where most poor people live? And what about economic evaluation of the technologies and extension packages that will be promoted? This will be important to see whether they really are more 'profitable' than alternative practices (and improve returns to farmers land and farmer's labour).

Dominic Smith: public sector in research extension should be more and more focused to communities in mountainous and remote areas. We do not have capacity to touch upon private extension and research services.

SESSION 4:
ROLES OF NON-GOVERNMENT PARTNERS (NGOs, BUSINESSES, RESEARCH INSTITUTES) IN SUPPORTING INTERNATIONAL INTEGRATION AND RURAL DEVELOPMENT
(Mr. Alessandro Pio, Officer In-charge, ADB Mission in Hanoi)

6. On behalf of Mrs. Carol Sherman, Country Director, CARE Vietnam, Ms. Chitose Noguchi, Assistant Country Director made a presentation on the Contribution of INGOs to the country rural development and poverty reduction.

The presentation was made with the following main points:

INGOs have added value to rural development and poverty reduction particularly through:

• Building Capacity of local partners
• Introducing Innovative and Participatory Approaches
• Advocating for the Poor
• Assisting People's Organisations' Engagement in Rural Poverty Reduction
  Tangible Contributions of INGOs include participation in the formulation of the CPRGS and strategic planning for poverty reduction.
  
   

7. Prof. Dr. Vu Tuyen Hoang, President, Vietnam's Union of Science and Technology Associations-VUSTA made a brief introduction about the establishment and operation of VUSTA, and delivered a presentation titled "Building up agricultural models toward industrialization".

In the presentation, Prof. Hoang highlighted that it was defined in 1999 that rural industrialization was to converse a small production into a more and more large-scaled commodity production, with higher productivity and better quality.
 

Discussion:

Mr. Rob Mcgregor, First Secretary, Australian Embassy made a question to CARE presentation: regarding the international integration challenges to agriculture particularly in relation to productivity and income distribution in rural areas, how INGOs see their engagement in the agenda and how it influences the setting-up of INGOs strategy in particular?

Ms. Chitose Noguchi answered: one of the main concerns of INGOs regarding integration is the increasing gap between the rich and the poor. INGOs have always focused on poverty alleviation, but we need to better target our programmes to serve the poorest of the poor, which include ethnic minorities, women, and other disadvantaged people. In terms of discussions, INGOs collectively have not been involved in larger discussions about WTO. It is an important issue that can be discussed in the working groups under the NGO Resources Centre.

A representative from SNV provided information: SNV supported VUSTA and VNFU to organise their workshop on the impact of WTO on poverty and food security. The report of the workshop was also circulated at this ISG Plenary meeting 2003.

Mr. Le Quang Binh, Program Coordinator, Oxfam Great Britain, made a question to Prof. Hoang: in the time to come, will VUSTA participate in challenging the Government policies such as the ones on trade liberalization, or on poverty reduction?

Prof. Hoang answered: VUSTA will challenge the programmes at the request of the Government. VUSTA has established 19 councils to do this job. VUSTA already signed cooperation agreements with many Government's relevant agencies such as MARD, MONRE, Vietnam's General Confederation of Labour, VCCI, etc.

Ms. Nguyen Thi Kieu Vien, from SNV: The Workshop by VUSTA and VNFU on the impacts of WTO to poverty and food security also laid out a very important issue, namely to share information among the stakeholders not only among State agencies with a view to find out solutions to reduce negative impacts of WTO to Vietnamese poor farmers.

Mr. Alessandro Pio/ADB: Building demonstration models appears to be a good method for dissemination of know-how among farmers. However, their mass replication shall be carefully considered as an increase in supply of agricultural products may lead to drops in their price, as often observed in Vietnam.

Mr. Rob Swinkels, from WB, gave the forum updates of the multi-donor effort underway that tries to take the comprehensive approach to capacity building for policy analysis in rural sector. This effort is implemented through ISG mechanism, and aims at helping policy makers in MARD and others to base decisions more on high quality analysis and high quality data collected from the fields. This is done through close collaboration with the International Food Policy Research Institute (IFPRI).

 

Mr. Alessandro Pio, Officer In-charge, ADB Mission: suggested that efforts be made at future ISG meetings to also have some representatives of the private sector, given the
important role the private sector can play in the development of
agriculture in Viet Nam.

Meeting conclusion:

On behalf of MARD, H.E. Dr. Bui Ba Bong, MARD Vice Minister concluded:

• Thanked H.E Minister Le Huy Ngo for kind attendance and giving important remarks on the key emergent issues of the agriculture and rural development in Vietnam.
• Thanked distinguished guests and delegates for their participation and contribution to the success of the meeting.
• Despite of time limit, the outputs of the meeting are highly significant thanks to the climate of the forum, which is very intellectual, constructive and very open.
• The theme of the meeting is appropriate at this pace, addressing two important issues: (i) how to successfully transfer the Vietnamese agriculture to be able to integrate into the global economy, and (ii) how to improve the livelihood of the poor in the rural areas. These two issues are separated but very closely related. To address these issues, the meeting had excellent presentations. We must thank the speakers for the presentations. Certainly, policy dialogues and donor coordination in this direction shall be continued.
• The meeting is closed, but challenges for the agriculture and rural development sector are still ahead, so certainly we will meet again to continue sharing experience, resources, and will work together more closely.
• Thanked H.E. Mr. Joe Thwaites, Extraordinary and Plenipotentiary Ambassador of Australia to Vietnam, and Mr. Alessandro Pio, Officer In-charge, ADB Mission in Hanoi for their kind co-chairmanship of the meeting.
• Thank Dr. Le Van Minh and ISG Secretariat for their excellent preparation for the success of the meeting.

The meeting ended at 12:00
Hanoi, 22 September 2003
Chairman of the Meeting

(Signed)

Le Huy Ngo
Minister, MARD
Chairman, ISG Steering Board

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