Evaluating the Effectiveness of Agricultural Production Model

Size: px
Start display at page:

Download "Evaluating the Effectiveness of Agricultural Production Model"

Transcription

1 Evaluating the Effectiveness of Agricultural Production Model Van Phong Nguyen 1,4, Quang Hien Truong 2,3, Junbiao Zhang 1 1 College of Economics and Management, Huazhong Agricultural University, China. 2 College of Resources and Environment, Huazhong Agricultural University, China. 3 Faculty of Geography - Land Administration, Quy Nhon University,Vietnam. 4 An Giang Department of Agriculture and Rural Development, Vietnam. Abstract: An Giang is a province in Mekong river delta, Vietnam, a province with quite large an area of agricultural land and convenient for agriculture development. However, determining rational organizational model of agricultural to promote potential of land, local human resources is an urgent problem. In this paper, we rely on results obtained from agricultural authorities of An Giang province, combined with actual survey to assess the efficiency of agricultural of An Giang province on models, then compare effectiveness of models. Currently, An Giang province has two main models of agricultural including traditional model of agriculture and new model of agricultural ; the study results show that new model of agricultural has brought higher economic efficiency, this model promotes effectiveness with regard to links between businesses and farmers, benefit sharing and cooperation for mutual interests. Model is evaluated successful when looking at results achieved including increased profits of farmers; products obtained of high quality, gradually assertion of brand in international market. However, for this new model of agricultural to be really developed and replace traditional model of agricultural, it would require more attention and investment from provincial agricultural management agencies, businesses and especially farmers study, learning and boldly approach to scientific and technical progress, thereby contributing to the development of agriculture in particular and socio-economic development in general of An Giang province. Keywords: New Agriculture Model, An Giang, Production Model, Production Scale. I. INTRODUCTION Agriculture is considered the strength of Vietnam's economy, in which Mekong river delta is a key economic area of agriculture, agricultural product here is rich in variety, food is sufficient for both domestic demand and export. Reality of business and activities has posed an urgent requirement, that is domestic and foreign market requires increasingly high quality; however agricultural of Vietnam in general and Mekong river delta in particular is largely undertaken by farmer households with small, fragmented scale, weak management of capital and reinvestment...meanwhile the state s support policies are insufficient and low resulting in farmers hard work but still not yet escape from circle of difficulties. [16] An Giang province in Mekong river delta with an area of 3,536.7 square kilometers, a province having considerable agricultural land and convenient for agriculture development. However, determining rational model of agricultural to promote potential of land, local human resources is an urgent problem. [2] In this paper, we focus on studying models of agricultural s of An Giang province in recent years, to assess the suitability of these models to local area, then offer solutions for development of sustainable agriculture of An Giang province in terms of economy, society and environment. II. RESEARCH METHODOLOGY A. Method of Data Collection Collecting documents and data on natural, economic social conditions, agricultural development of An Giang province in recent years and from reports of An Giang Province People's Committee to know the province s orientation of agriculture development in period of and province s overall planning of social-economic development in period of B. Method of Field Survey and Investigation, Interview During study, investigation interviews were done with farmers on agricultural (area, yield, investment...), besides field visit is to have an overview about provincial distribution of models, forms of land use and land use situation, especially areas adopting new model of agricultural in order to have more grounds to comment on the appropriateness of this model for provincial agricultural development. Household interview, survey was done by us with following scale: Survey of 300 households (300 sheets) with prepared sheet by method of convenient sampling, of which 200 households cultivating rice and 100 households cultivating other kinds of farm produce, divided into two parts: Available Online@ 128

2 + 150 sheets: to survey farmers following new model of agricultural, of these, 100 households cultivating rice and 50 households cultivating other kinds of farm produce sheets: to survey farmers following traditional model of agricultural, of these, 100 households cultivating rice and 50 households cultivating other kinds of farm produce C. Method of Data Processing Data processing consists of two stages including primary data processing and secondary data processing. Data processed will be consolidated in form of statistics, charts... on Microsoft Excel. III. RESULTS AND DISCUSSIONS A. Outline of An Giang Province, Vietnam An Giang province in Mekong river delta with an area of 3,536.7 square kilometers, ranking 4th in Mekong river delta in term of area after Kien Giang, Ca Mau and Long An provinces, bordering on Dong Thap province to the east and north, bordering on Cambodia to northwest, bordering on Kien Giang Province to the south and southwest, bordering on Can Tho City to the east. With that position, An Giang is located in tropical monsoon climate, with 2 seasons including rainy season and dry season. The annual average temperature is about 270C annual rainfall of about 1,130 mm by average, average humidity of 75-80%, the climate is basically conducive to agricultural development. An Giang population is 2,157,651 people in 2014, including 1,074,295 males (accounting for 49.79%), 1,083,356 females (50.21%); 660,241 people in urban area (30.60%) and 1.497,410 people in rural area (69.40%). The population between rural and urban areas shows clear difference, rural population is 2.27 times higher than urban population. That means that agricultural economy plays an important role in economic development of the province with abundant labor force. [3] B. Current situation of Agricultural Production In An Giang Province, Vietnam 1) Value of agricultural of An Giang province in period of In recent years, agricultural of An Giang province has always been increased in terms of area, yield and. Planted area increased is mainly due to the increase of fall winter rice area, peaking in 2013 with total cultivated area of 701,303 ha, including 641,340 hectares of rice and hectares of other crops. Productivity, is increased thanks to close direction of departments, agencies at all levels frequently guiding farmers field visit, care, timely detection and prevention of disease, good performance of irrigation to ensure water resources, increasing application of advanced science and technology, farm mechanization to help reducing costs and significantly increasing productivity, yield, namely: rice yield in 2014 was 6,46 tonnes/ha, an increase of 0.25 tonnes/ha compared to Thanks to the increase in terms of area, yield so paddy output is also significantly increased, reaching output of 4.13 million tons in 2014, 472 thousand tons up compared to TABLE 1: An Giang Provincial Agricultural Production Situation In Period Of Figure 1: Administrative map of An Giang Province, Vietnam (Source: Statistical Yearbook of An Giang province, 2014) Structure of rice varieties continue strong transformation in recent years, by 2014 over 80% of area using certified seeds of high quality recommended by functional agencies, however recommended varieties are used with limit, but due to high productivity, easy to grow, less disease, strong consumption by domestic market, so the area using this variety is approximately 100 thousand hectares, representing 16% of rice cultivated area. Available Online@ 129

3 Rice export is a preponderance of An Giang province, annual of exported rice has contributed significantly to province's GRDP. Table 2: Rice Export Of An Giang Province In Period Of Turnover Quantity (US$1,000) (ton) Year Total turnover (US$1,000) , , , , , , , , , , , , , , ,731 (Source: An Giang department of industry and trade) Figure 2: Graph of Rice Export Of An Giang Province In Period Currently, An Giang s rice is exported directly to 69 countries worldwide, with a number of new countries such as Syria (Asia); Haiti (America); Madagascar (Africa)... in which 26 countries in Africa for highest proportion; followed by 20 Asian countries, remaining output exported to 11 European countries; 7 American countries and 5 countries of Oceania. This indicates value of An Giang Province rice has been confirmed. However, the above table shows export turnover of An Giang province rice has increased and decreased erratically over years. We can deny cause making export of this commodity raised because of worldwide food shortage caused by lasting natural disasters, typhoon leading to poor crop, reduced productivity, demand for food is getting high for some countries that bringing great yield to An Giang in both volume and value. Specifically, in 2011, rice export reached nearly 568 thousand tons equivalent to 274 million US dollars increased by only 2.8% in volume but up 12.8% of turnover; 2014 export totaled over 540 thousand tons equivalent to 240 million US dollars, up 18.8% in volume and 17.3% increase in turnover over compared to the same period. 2) Models of agricultural organization in An Giang Province, Vietnam a) Traditional agricultural model In this model, each household separately cultivates and totally decides on its farming from to consumption of products. + Variety: farmers after harvesting usually keep a little volume of rice for variety of next crop, usually after 3-5 crops if variety does not bring yield as desired, farmers switch to new variety then. + Fertilizers, pesticides: most farmers come agents (level 2) nearby, for purchase on credit at interest rate of 1-3%/month, to pay on harvest. + Irrigation: largely operated by cooperatives. + Harvest: farmers actively rent reaper at price to be discussed by themselves. + Consumption: after keeping a portion for seed of next crop, most of farmers sell agricultural products at the farm to traders or dry rice for sale to traders later. Advantage of this form of is farmers decide time and form of cultivation, but also brings many limitations such as limited access to information on science and technology, market; disease prevention; high price of input materials due to interest rate on buying fertilizers and pesticides; many kinds of agricultural products not homogeneous in quality leading to very low price with difficulty of consumption. b) New model of agricultural organization New model of agricultural is the form reorganizing on basis of link between farmers and businesses, bringing together small farmers to create conditions for applying new techniques, solving stable output and profit for to An Giang province is rated as most successful province performing "new model of agricultural " in Mekong river delta. In winter-spring crop of 2011, there were three businesses in province including An Giang Plant Protection Service JSC, An Giang import and export company and An Giang food Company perform model building materials area of 2,400 ha of rice field in Chau Thanh, Cho Moi, Chau Phu, Thoai Son and Tinh Bien Districts. Some communes with outstanding agricultural models like Long Dien A commune (Cho Moi District), My Khanh Commune (Long Xuyen City), Binh Hoa commune, Vinh Hanh commune (Chau Thanh district),... each commune of ha. + Objective of new model of agricultural is to do agricultural towards stable, sustainable Available Online@ 130

4 export, high economic and environmental efficiency, ensure benefits for farmers and exporters, promote competitive advantage of agricultural products of Mekong river delta in particular and of country in general in international market, gradually increasing income for + Meaning of new model of agricultural is a new form to gather farmers having small area of rice field. The parties are benefiting at highest, in which farmer household participates in a voluntary form, is supported with a portion of cost, techniques and output product is completely underwritten, ensuring farmers obtain stable profits, farmers enjoy fruits in their own land. In overall, the policy of building "new model of agricultural " represents inheritance and development of "model linking four actors". Specific implementation in each locality, in each participating enterprise are factors that make success in aligning the relation of four actors in general and relation between enterprises and farmers in particular is quite clear and coherent. c) Model linking 4 factors in agricultural Linking four actors is a sound policy, guideline to promote sustainable agricultural development, is implementing industrialization and modernization of agriculture and rural areas, switching to commercial of large, modern scale. Implementing decision on "Contract of agricultural goods consumption" signed between businesses and producers in following forms: - Advance capital, fertilizer, pesticides, technical assistance, technology and acquisition of agricultural products; - Buy fertilizer, pesticide, acquire agricultural products; - Direct consumption of agricultural products; - Linking : farmers use value of land use right to contribute equity, to enter in joint venture or lease land, then farmers will produce in land used in equity, joint venture, partnership or lease and resell agricultural products to businesses, creating sustainable linkage between farmers and enterprises. Currently in the province, there are some typical link models as: model for linking of Japanese rice, model for building material area of An Giang Import Export Company (Angimex), rice model on GLOBAL GAP standards, link model of An Giang Plant Protection Company... in overall, these link models are quite effective in providing input, and output, would contribute helping farmers more confident in their. C. Assessing the effectiveness of agricultural according to models in An Giang province To facilitate the assessment of efficiency of agricultural model, we classify An Giang Agriculture into 2 types of model including traditional model of agricultural and new model of agricultural, new model of agricultural includes link model between four actors in agricultural. Within scope of this paper, we do not compare efficiency in of farm produce of two farmer groups because we find no difference between 2 groups of The reason is: (1) Crop growers are mostly farming households of small, fragmented and unfocused scale, while sowing and harvesting time is not homogeneous; (2) they produce spontaneously without clear direction, when finding any crop sold at high price, then they grow that crop, when price turns cheap, they switch to other crops; (3) the same household, but they can plant different types of plants so they cannot distinguish each type of input cost for each plant; (4) The province currently has not any particular enterprise enters in contract of underwriting their products, they mainly grow and sell on themselves,... Table 3: Costs and Profit Under Models Of Agricultural Production Indicator New model (VND) (1) Traditional model (VND) (2) Ratio (%) (1)/(2) Turnover 59,077, ,450, Total cost/ha 33,842, ,057, Cash cost 22,162, ,857, Non-cash cost 11,680, ,200, Profit/ha 25,234, ,392, Income/ha 36,914, ,592, We just focus on comparing the effectiveness of rice of two groups of farmers; in the course of research, we conducted household survey, each group of 100 households, study period is from 2010 to 2014, the Available Online@ 131

5 data is averaged on 1 ha of area. After investigation and analysis, data processing, and combined with data collected from provincial agricultural agencies, we obtain result given in above table. Figure 3: Graph of cost and profit upon models of agricultural Evaluating cost and profitability effectiveness of these agricultural models is mostly depth analysis of basic costs in of rice, such as cost of preparing land, cost of seed, cost of fertilizers and cost of agricultural chemicals, costs of hiring labor and other costs. Through above data table, we see new model of agricultural is more efficient than traditional model of agricultural, this is reflected in sales of new agricultural model higher than sales of traditional agricultural model (114.82%), while total costs/ha is lower (91.32%), that led to profitability of new agricultural model is higher than traditional agricultural model (175.33%). Assessing the effectiveness of 2 models, we rely on norms of capital efficiency, cash cost effectiveness and value of workday. Through investigation, analysis and processing of data, the results obtained are summarized in following table: Table 4: Effectiveness in Using Capital In Production Models Norms Profit/total cost Profit/cash cost New productio n model (1) Traditional model (2) Ratio (%) (1)/(2) Figure 4: Graph of Efficiency in Using Capital Per Production Models Through data summarized in the table and shown in above chart, we have following observations: Effectiveness of using capital: For new model where households invest VND01 as cost, gain VND0.75 as profit, while households in traditional model only gain VND0.39. This suggests that the efficiency of households using capital in new model is higher than farmers in traditional model. This is the basis for stability and development of new model. Effectiveness of using cash: When investing VND1 cash of costs, farmers in new model gain VND1.14 while farmers in traditional model only earn VND0.6. This implies that effectiveness of using cash of farmers group in new model is higher, this is very significant when most capital is derived from loan. Table 5: Value of Workday Following Production Models Norms Value workday of New model (VND) (1) Traditional model (VND) (2) Ratio (%) (1)/(2) 172, ,229, Figure 5: Graph of workday value following models Available Online@ 132

6 As number of working days on average per 1 hectare of households in new model is fewer than in traditional model, so workday value of households in new model will be higher than the one in traditional model (VND172,840 vs. VND87,229). When comparing with average workday value in market of agricultural at VND80,000/day, the workday value of both models are higher, especially new model is 2.16 times higher than workday value in the market. Rice process needs many work days, so creating many job opportunities for rural laborers. This has great significance in creating jobs for labor in rural areas. Through analyzing cost and profitability of two models, it shows average total income of farmer group is about VND36,914,733 in new model and around VND27,592,820 in traditional model, and cash expenditures of two groups of households is, respectively VND22,162,482 and VND23,857,979. In terms of investment performance, group of farmers in new model obtain higher effectiveness for lower cost of investment in but higher income. D. Some measures to improve the efficiency in organization of agricultural for An Giang Province To come up with solutions improving the efficiency in organization of agricultural for An Giang Province, we conducted a SWOT analysis of and consumption of agricultural products in province in recent years, besides we rely on socio-economic development orientation and agricultural development orientation of the province in period of Table 6: Swot Analysis Of Production And Consumption Of Agricultural Products In An Giang Province SWOT O O1: Economic S S1: Large average area of land /household. S2: Long time experience in of S3: Abundant force. S4: Farmers awareness of using highquality rice varieties is improved. O1,4 + S4: Development of W W1: Low and uneven educational level of W2: Farmers and businesses lack capital for and running business. W3: Presence of many intermediate agents in consumption. W4: Farmers have not been yet active in link and cooperation. O2,3 + W1: Increasing the integration in the world (export, investment markets). O2: Positive interest and policies from local government. O3: Enthusiastic interest in technological research and transfer. O4: Many companies are implementing effective link. T T1: Competition from globalization. T2: Loose link between farmers and enterprises. T3: Weather tends to develop towards disadvantage. high quality material rice area O2,3,4 + S1,2,3,4: Link of, branding of products, modernization of agricultural, developing guidelines for new model. T3,4 + S 1,2,3,4: Accumulate land, parcel exchange. T1,2,3 + S1,2,3,4: Connect market and create sustainable linkage between businesses and number of training courses, field seminars; Promoting technology transfer and application of science and technology in. O5 + W4: Expanding efficient forms of cooperation between businesses and T2,3,4 + W2,4: credit support to farmers; lending interest rate support to businesses participating in linkage. T5 + W3,2: Open training courses on market access, promoting the initiative of farmers in looking for markets for their products. Available Online@ 133 Problem to be addressed: + As unable to increase scale of in a short time by changing ownership to organize concentrated agricultural in large scale, forming material area, but no need to change individual ownership structure; if time remains long, it s able to conduct the method "land accumulation, parcel exchange" in order to create a basis for concentrated toward industrialization. + Planning of high-quality varieties to suit each specific region. + Credit support to farmers through investments in agricultural supplies, support in agricultural services before and after harvest. + Consumption of all agricultural products made by + Branding high-quality agricultural products (rice, first of all) Solving above problems is the coherence of the factors linking model: State, scientific experts, businesses and Specific measures to address above issues: - Government:

7 There are guidelines for concentrated through organization of new model. Provide policies on credit support to businesses through which forming agricultural services in service of and post-harvest (warehouse, drying system...). This will reduce credit risk for banks while farmers will access to agricultural model toward industrialization. There is policy on support for businesses investing in for farmers (certified seeds, fertilizers, agricultural chemicals,...) and consuming all agricultural products made by farmers, all that give farmers peace of mind in, while enterprises active supply to domestic market and export. - Scientific Professionals: Research on optimum solution for pest control in cultivation. Positive transfer of science and technology, training and support to farmers through field seminars, sticking to farmers during cultivation. - Enterprise: Survey local market and export to identify suitable varieties. Organize investment material areas and invest in agricultural supplies to farmers in form of contracts. Provide credit support to farmers when necessary. Ensure profitability for Upgrade storage systems, yards, sowing services, irrigation pumping and drying, storage services. Train and improve technical staff of high quality. - Farmer: Join in concentrated model. Cooperate with enterprises or cooperatives in and consumption. Follow solutions, processes of pest management. CONCLUSIONS Research on efficiency of agricultural models in An Giang Province, Vietnam, we find today's agricultural remains fragmented, of small scale in form of traditional farming household. Some farmers have already followed new model and obtained higher efficiency, but these models have not been widely adopted. Through research we see new model of agricultural brought higher economic efficiency, this model shows the effect of linkage between businesses and farmers, benefit sharing and cooperation for mutual interest. The model was evaluated successful when looking at the results achieved including increased profits of farmers; products obtained are of high quality, gradually asserting brand in international market. However, for this new agricultural model to develop really and replace traditional agricultural model, it would require more attention and investment from provincial agricultural managers, businesses and especially farmers bravely studying, learning and approach to scientific and technical progress, thereby contributing to the development of agriculture in particular and socio-economic development in general of An Giang province. References [1] An Giang Department of Agriculture and Rural Development. Agricultural and rural development sector review report [2] An Giang Department of Agriculture and Rural Development. Report on results from implementation of decision No. 80/TTg of Prime Minister, 2014, 9 pages. [3] An Giang Provincial Statistics Department. Statistical Yearbook Statistics Publisher, [4] Cultivation Department (MARD). Preliminary conference on movement modeling "organization of new agricultural " dated 22/08/2011. [5] Dao The Anh et al.. Materials for training, analyzing chain value of agricultural products. 2010, 58 pages. [6] Dinh Phi Ho. Agricultural economy Textbook. Forestry- Agriculture University, Ho Chi Minh City, in [7] Do Kim Chung et al. Transfer of rice process and comparison of the economic efficiency with processes of 2006, 65 pages. [8] Ho Vinh Son. Analysis of efficiency in of materials sugarcane in Soc Trang province. Thesis, [9] Huu Hoa. Moc Hoa - Model of linking 4 effective factors [10] IMPP & PARA. Training materials on value chain for participants, market access and decree , 19 pages. [11] Mai Van Nam. Econometrics Textbook. Statistics Publisher, [12] Mai Van Nam. Principles of economic statistics textbook. Information Publisher, [13] Nguyen Ming Nhi. Linking 4 factors. Thanh Nien online aspx, [14] Nguyen Ming Nhi. Loosely linking of 4 factors. Saigon Liberation online [15] Nguyen Sinh Cuc. Vietnam Rural Agriculture in renovation period. Statistical Publishing House, [16] Nguyen Tri Khiem. Agricultural under product underwriting contract in An Giang in "Linking farmers to markets through contracted agricultural." Report from Workshop on M4P/An Giang University, Asian Development Bank (ADB). 2005, 58 pages. [17] Nguyen Van Sanh. Final report on scientific and technological paper of ministerial level "Analyzing and evaluating the relationship of four factors" and proposing measures for and consumption of rice in Mekong river delta in the context of integration in the world economy ". 2011, 63 pages. [18] Nguyen Xuan Hai. Lecture of general management science. Ho Chi Minh City University of Social Sciences and Humanities, National University Hanoi, [19] Tran Van Hien et al. Research and application of cooperation, link model between cooperatives and enterprises, scientists and state in business, (Phase I). Ton Duc Thang Politics School, Available Online@ 134