Economic Growth and Transition in Vietnam and China and its Consequences for their Agricultural Sectors: Policy and Agricultural Adjustment Issues

Secondary data are used to discuss and compare the consequences for agriculture of economic growth and transition in Vietnam and China. It is found that China and Vietnam have experienced similar adjustments in their agricultural sectors and face at this time, similar agricultural policy problems. China began its economic reforms in 1979 and Vietnam followed in 1986. Since then both countries have experienced rapid economic growth, falling poverty rates and significant rises in per capita income. At the same time, substantial restructuring of their economies has occurred, a feature of which has been a decline in the relative contribution of agriculture to total employment and output. These changes are outlined. Significant changes have also occurred within the agricultural sectors of China and Vietnam and these are reviewed. In both countries, the livestock sector has grown in relative importance. Households are the main contributors to agricultural production but their individual holdings of land are small by Western standards and households keeping livestock mostly only hold a few head. Given the exit of farmers from agriculture, pressures are mounting for increasing the size of agricultural units. This exit can add to economic efficiency and growth. Policies to facilitate movements from farm to non-farm employment are discussed and analysed. Property rights and the marketability of agricultural land can facilitate such movements and contribute to economic efficiency. In recent times, China and Vietnam have extended property rights in agricultural land and have increased its marketability. These measures are outlined. With further economic development and transition, it is predicted that these rights and the marketability of agricultural land will be further extended. However, if previous practice is followed, those policy changes are likely to be gradual.