The report, introduced to Ha Noi yesterday, is expected to provide intellectual fodder for Viet Nam policymakers as the Government prepares a national strategy titled Tam Nong for agriculture, rural Viet Nam and farmers.
The report says agriculture can promote development through its contribution to economic growth and provision of livelihoods and help in the better management of natural resources.
It showed that agricultural growth was especially effective in poverty reduction, said lead author Derek Byerlee.
This meant that more attention should be paid to investment in agriculture to increase welfare for the poor, he said.
"One percentage of GDP growth contributed from agriculture benefits the income of the poor two to four times more than does one percentage of growth contributed from non-agriculture.
"Rapidly transforming economies, including Viet Nam’s, must move beyond the green revolution to focus on new high-value agriculture."
Byerlee argued that fast-growing urban incomes and demand for high-value products in cities were becoming the drivers of agricultural growth and poverty reduction.
The report says that technological and institutional innovation, together with a shift in production according to market demand, can be used to promote agriculture.
The World Bank’s approach would link small-holder farmers to high-value producer organisations, organise associations to manage natural resources and organise farmer groups to benefit from the economy of scale.
The report categorises most East Asian countries as "transforming countries", where agriculture is no longer a major source of economic growth, but most of the poverty is rural.
Viet Nam’s response
"I agree with the World Bank that agriculture has a very important role in the promotion of development and reduction of poverty," said the Institute of Policy and Strategy for Agriculture and Rural Development general director, Dang Kim Son.
Institutional reform of agriculture would be an important part of Viet Nam’s new Tam Nong policy which aims to improve agriculture, rural life and farmers’ welfare.
"Viet Nam needs not only better national institutions but better local institutions, such as for co-operatives, trade distribution channels and urban-rural collaboration," he said.
The general director said that although agriculture’s share of GDP had declined quickly in both Viet Nam and China, both had been very slow to transfer rural labour out of agriculture.
About 70 per cent of Viet Nam’s population were still engaged in agriculture and the country had 10 million small-farm households working with limited land, technology and labour.
"If we transform into large-scale production, with large plantations, then what to do with these households?" he asked. "Where will they go if industry and the services sector don’t absorb them?"
ActionAid Viet Nam director Phan Van Ngoc said that he worried that the report’s support of high-value market-driven agriculture would worsen the plight of small-holder farmers.
"This approach will lead to an increased concentration of land and food distribution in the hands of a few agribusinesses and corporations," he said at the ceremony held by the World Bank in collaboration with the Agriculture and Rural Development Ministry to launch the report.
If agriculture was left to the market, small-holder farmers would lose their land to those who had more money, technology, experience and efficiency, he warned. This would create a swirl of land consolidation into the hands of a few.
Would it be right to drag non-efficient small-holder farmers away from agriculture?
The ActionAid Viet Nam director said that if agriculture was dominated by a small group of companies who had technology and industrial-property rights, "there would not even be food sovereignty."
Viet Nam became the 63rd member of the International Union for the Protection of New Varieties of Plants in November last year.
Membership means that it has to respect intellectual property rights for new varieties of plants, many of them high-value agricultural produce