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Large -Scale Field Model: A Policy Implication for Viet Nam ? ANH H. LA Centre for Analysis and Forecasting Viet Nam Academy of Social Sciences Virtual Institute Seminar on Trade and Poverty Geneva, September 8-10, 2014. Content. The Large-Scale Field Model implementation:

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  1. Large-Scale Field Model:A Policy Implication for Viet Nam?ANH H. LACentre for Analysis and Forecasting Viet Nam Academy of Social SciencesVirtual Institute Seminar on Trade and PovertyGeneva, September 8-10, 2014

  2. Content • The Large-Scale Field Model implementation: • Technical problems facing An Giang Plant Protection Joint Stock Company • Policy design: technical issue • Conclusions

  3. Technical problems facing An Giang Plant Protection Joint Stock Company (1) • Couldnotinvest in building more millingplantsandwarehousesbecauseoftheirunderuse (twocrops per year) andlackofbudget (onlyloanswithmarketinterest rates available). • Unevenrice qualityduetolackofdryingfacilitieswithsamequalityatharvest time whileopportunitycostofbuildingdryingplantsis too high. • Face brokencommitmenttodeployLSFM when a outputs contract is unenforceable or any crop is affected by weather or natural disasters.

  4. Technical problems facing An Giang Plant Protection Joint Stock Company (2) • Difficult to get bank loans for paddy seed or fertilizer purchase to supply to farmers because of contract breach risk from farmers (paddy sold to collectors with higher prices or poor crop) • Cannot predict the impact of climate change and sea level rise on rice production • Underdeveloped agricultural insurance instruments

  5. Policy design: Technical issue • Lack of competition in rice exports • Lack of investment in rice growers from exporters • Habit of small-scale rice producers and lack of mutual trust between enterprises and farmers, causes the breaking of the contract. • No clear rules for handling cases of dispute • 30% profit to rice farmers is not guaranteed • Inherent conflict of interest in regulating rice exports • Lack of rice farmers’ participation in policy-making

  6. Conclusions • LSFM cannot be expanded if farmers’ benefit is not guaranteed. • Successful implementation of the LSFM would require some level of competition among Vietnamese rice exporters and hence access to the rice export quota.

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