Will Mekong Delta People Benefit from WTO Accession?

Vietnam has become a member of the World Trade Organisation (WTO). Entering the WTO, Vietnam will begin a new ‘journey’ with its committed contents producing impacts on all aspects of the social life. As Vietnam is a country with 70 per cent of its population living in rural areas, the question is what Vietnamese farmers, especially farmers in the Mekong delta, the rice bowl of Vietnam, will benefit from the country’s accession to WTO and how they will cope with challenges.

 

Over the past years, alongside the renovation process of the country, the Mekong delta in general and its agriculture in particular have changed for the better. However, many local farmers are in difficulties. Their lack of knowledge has become a big challenge for the region during international integration. According to latest statistics, at present, the number of poor household in the Mekong delta accounts for around 20 per cent of the whole country’s total number. Also, the region is facing difficulties in transportation, education and training.

 

According to a survey conducted by the Ho Chi Minh City University of Economics, the Mekong delta contributes 17 per cent of Vietnam’s GDP, 92 per cent of its food output, and 66 per cent of seafood output. At the same time, the farm-produce market is beyond the control of local farmers. Concretely, price of rice has stood at VND 2,500 per kilogram on average for two years while prices of oil and petrol have doubled. So have prices of fertilisers and pesticides. Many local households can earn between VND 50 million and 100 million per hectare per annum.

 

According to economists, after Vietnam joins the WTO, foreign-made goods will flood the Vietnamese market. As a result, farm-produce is expected to face the fiercest competition. With a low starting points and the above mentioned landscape of agriculture in the Mekong delta, many products of the region are difficult to compete with products of the same kind from other localities in Vietnam. Also, according to experts, entering the WTO, Vietnam has just begun a new ‘journey’ to conquer knowledge and information to control markets, and improve productivity. The journey is expected to be hard with fierce competition right in the local market. Concretely, farmers have to improve the quality and trademarks of their products to get them accepted by the market. After joining the WTO, import tax will be cut, the market will have more goods to meet the local people’s demand. However, should Vietnam become a large market of the world? To whom will local farmers sell their vegetables and fruit if local consumers rush in buying imported fruits and vegetable of high quality at cheaper prices?

 

At a recent seminar, Professor Dao Cong Tien, former director of the Ho Chi Minh City University of Economics, said Vietnam’s accession to WTO would offer more opportunities, including expanded foreign markets for Vietnamese goods, an equal, fair and transparent playground and opportunities for investment, management and technology attraction, thus helping tap creative labour of the Vietnamese people.

 

However, Vietnam faces many challenges, such as fierce competition and the State-removed protection. Production should be renewed for improved effectiveness and competition.

 

Many economists propose in the short term, apart from building strong trademarks and improving the quality of farm-produce of the Mekong delta, localities in the region should focus on developing their human resources. Also, a concentration should be given to developing infrastructure of agriculture in accordance with WTO’s regulations. At the same time, education should be promoted to help local farmers to know about markets and promote technological application into agriculture to increase productivity, quality and reputation of the delta’s farm-produce.