PowerPointprsentation

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Vietnams Rice Policy Recent Reforms and Future
Opportunities
Chantal Pohl Nielsen
University of Copenhagen, and Danish Research
Institute of Food Economics
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• Background
• 1980s Vietnam a chronic importer of rice
• 1997 Worlds 2nd largest exporter after
  Thailand
• In part due to Doi moi policy reform in 1986
• collectives ? individual farm households
• New trade-off between policy objectives
• 1. Sufficient rice supplies at affordable
  prices
• 2. Foreign exchange earnings from rice exports
• Objective 1 very important

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• Objectives
• Explore the economic consequences of
• Removing the rice export quota fertilizer
  import quota
• Current inflexibilities regarding land
  allocation and recent land re-allocation plans
• Current preferential trade agreements that
  Vietnam does not yet benefit from, ex. European
  Union rice imp. regime
• Methodology and data
• Model Standard GTAP has been extended to
  represent the above policy instruments and
  structural features
• Using complementarity feature of GEMPACK
  (beta-vers. 8.0)
• Data GTAP version 5. Aggregation 12 commodities
  
• (6 prim. agric., 2 proc. food) and 19
  regions
• (Vietnam data is a 1997 IO table contributed
  by author)

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• 1. Rice export quota and fertilizer import quota
• Rice export quota is represented as a global
  export quota,
• i.e. trigger mechanism is aggregate export flow

The functioning of the export quota
Introduce new price Px and redefine
Pfob Complementarity statement lets us trace
whether quota is binding or not External price
data
Fertilizer import quota is represented using TRQ
module (Elbehri and Pearson 2000) External price
data
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• 2. Restrictions on land allocation
• a. Land re-allocation plans
• to diversify Viet. agric.
• Convert 5 of paddy land
• to alternative uses
• Land allocation in model
• amended to enable exog.
• shift of land out of paddy
• and endog. distribution
• among other agriculture
• b. Quantification of restrictions on land
  mobility is difficult, very little information
  available
• Represented such that land allocation across
  sectors is more sluggish in Vietnam than in other
  countries/regions

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• 3. Preferential access agreements of the EU
• The EU provides preferential access to
• Thailand
• USA
• Australia
• Guyana (ACP)
• OCT
• India
• Pakistan

40 of EU imports enter on preferential terms
TRQs
Rice is an exception to the EUs Everything But
Arms initiative. Vietnam is not classified as
an LDC.
Tariff rebates
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Selected production, trade and price results for
Vietnam, change
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Welfare results for Vietnam, change
Conclusions

• The rice export quota has been a strong
  regulatory tool that has kept Vietnamese rice
  production exports well below potential.
• The simultaneous removal of the fertilizer import
  quota has been a correct policy action, improving
  allocative efficiency.
• Land mobility restrictions are a serious
  constraint on rice production and exports.
• The attempt to control agricultural
  diversification through land re-allocation comes
  at the cost of reduced allocative efficiency.
• Vietnam has so little initial trade with the EU
  that levelling the playing field will not
  increase Vietnamese rice exports much.
• Providing Vietnam with preferential access
  similar to that of e.g. India will have a
  significant impact on Vietnamese-EU rice trade.