Hue University of Agriculture and Forestry (HUAF) Department of Sciences and Technology (DOST/MARD) Integrated Assessment of Trade liberalisation in Rice Sector of Vietnam International Workshop on Trade-liberalisation in the Rice Sector

Trade liberalization in the Vietnam rice sector Trade liberalization & agreements included - Removal of domestic rice trade restrictions (1997) - Relax and Removal of rice export quota:( ) - Allow participation of private sector in export (1998) - Reduce the rice export tax: 25%-0% (1998) -Relax and remove restrictions on fertilizer import ( ) -Tariff reduction to 0-5 % by 2006 under CEPT/AFTA -Reduce tariff rates under US Bilateral trade agreement -Trade deregulation under WTO accession

Trade liberalization in the Vietnam rice sector 3 As a result, rice export and rice production increased rapidly during the 1990s Increased export/trade Increased production

Trade liberalization in the Vietnam rice sector 4 Assessment process Step 1 Description, strategic screening, and qualitative assessment - Sensitise stakeholders - Rice growth policies - Trade liberalization - Categorize impacts Step 2 Literature review, Develop in-country methodology and quantify impacts -Environmental indicators -Socio-economic indicators -Quantitative model Step 3Impact valuationEnvironmental,Economic, Social Step 4 Policy development and initial policy response -Recommendations -Policy dialogue -Develop policy responses

Trade liberalization in the Vietnam rice sector In-country Methodology Stakeholder approach was used in strategic screening the trade liberalisation impacts Qualitative analyses were applied for ex-post assessment Quantitative model (PEM) was used for ex-ant assessment PRA applications were carried out to supplement and update secondary data (available and accessible) Field surveys applied where no secondary data available Impact valuation using shadow price conversion

Trade liberalization in the Vietnam rice sector 6 Main Impacts identified The trade liberalization reduced tariff rates. This increased rice prices and reduced fertilizer prices thereby increased incomes of rice producers. The increase in rice price produced negative impact on consumers, but reduction of the poverty rate represented to the positive impacts of overall change in rice sectors. Negative environmental impact of trade liberalization was perceived mainly from the overuse of non-organic fertilisers and pesticides. Further trade liberalization resulted from regional and bilateral trade agreements would provide positive economic impacts on rice industry of Vietnam

Trade liberalization in the Vietnam rice sector 7 Farmers scoring the environmental impact of rice intensification

Trade liberalization in the Vietnam rice sector 8 Impact of trade liberalization on “implicit costs” to UREA fertilizer domestic price Reduce import tax Remove import quota Private parti. in import

Trade liberalization in the Vietnam rice sector 9 Value added from trade liberalization in rice under trade agreements and agricultural re-structure Reduction in tariff rate (AFTA/CEPT) from 20 to 5 percent produce 2,727 Billion VND (258 Million USD). Reduce US tariff rice import from 35 to 8.3 percent (VN- USBTA produce 532 Billion VND (48 million USD). The reduction of rice growing area by 10 percent or 20 percent (diversification) will produce 563 billion VND (55 million USD) or 541 billion VND (60 Million USD)

Trade liberalization in the Vietnam rice sector 10 Integrated impact on poverty of rice price and UREA price was positive

Trade liberalization in the Vietnam rice sector 11 Main lessons learned Low data availability and accessibility Timing of the study limited ability of detail. Expertise of the IA team was not so high. Stakeholder involvement is still difficult Problems of valuation of impacts Approaching and understanding the policy process Opportunities from international integration Other studies dealing with environmental impacts The team capacity to be strengethened before assessment

Trade liberalization in the Vietnam rice sector 12 Main recommendations Improve awareness of trade impacts. Encourage internalisation of environmental costs and re-assess existing policies and practices Promote integrated rice farming by providing research and technical supports Stablize the plan of rice area, production, export Remove non-tariff barriers, stop protection of state- owned enterprises

Trade liberalization in the Vietnam rice sector 13 Main activities taken to implement recommendations Publication in national and intenational jounal Assessment briefings presented in policy missions/visits Training materials in university and extension programs Stakeholder workshop for exchanges and dialogue Stakeholders involved: team, researchers, local officers, rice produccers, exporters, MARD and MONRE. Team (university/institute) to provide capacity building MARD and local management to take coordination

Trade liberalization in the Vietnam rice sector 14 Main achievements of project Improved capacity of instittuions involved Developed in-country processes and tools Raised awareness of trade liberalization in agriculture stakeholder participation in assessment increased better anaylsis and information better communication (inter-levels, inter-institutional, between stakeholder groups, etc.) Scale up integrated rice farming

Trade liberalization in the Vietnam rice sector 15 Challenges faced in follow-up - Different perception and priorities of rice stakeholders -Awareness and capacity building requires appropriate time, processes and logical steps -Methods and means supporting implementation in the field with large scale -Stakeholder participaton with felt needs & appropriate benefit sharing -Local consultations in various aspects or fields of expertises -Limited resources

Trade liberalization in the Vietnam rice sector 16 What is needed to move ahead? - Develop a country program on agricultural/rice trade and sustainability with multiple stakeholer involvements -HUAF & other institutions to develop the program, undertake capacity building, and provide policy options -MARD to work on policy decision making & proposal -MOT, MOST & MONRE to provide relevant tecnical guides on trade, tariff, and environment UNEP -Resource supports -Facilitate consensus building among ministies/stakeholders -Technical supports: tools, processes