{"id":16,"date":"2026-02-15T20:01:42","date_gmt":"2026-02-15T11:01:42","guid":{"rendered":"https:\/\/vietnam-agri.com\/?p=16"},"modified":"2026-06-10T00:29:35","modified_gmt":"2026-06-09T15:29:35","slug":"vietnam-farming-issues","status":"publish","type":"post","link":"https:\/\/vietnam-agri.com\/en\/vietnam-agri\/vietnam-farming-issues\/","title":{"rendered":"The essence of Vietnam's agricultural problems and their solutions: addressing the challenges small-scale farmers face"},"content":{"rendered":"

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The Structural Challenges Facing Vietnamese Agriculture<\/h2>\n

Vietnam is one of Southeast Asia's leading agricultural countries, with a population of about 100 million.<\/p>\n

The share of agriculture, forestry, and fisheries in GDP is around 12%, but on an employment basis about 30% are still engaged in agriculture-related work, so even now, with industrialization advanced, agriculture can be said to be the very foundation of society.<\/p>\n

The 1986 Doi Moi policy<\/a> Since the economic opening brought about by it, productivity rose sharply through the individual allocation of land-use rights and the introduction of a market economy, and since the 1990s, as a rice export<\/a> exporting country it has entered the world's top ranks. Coffee boasts the world's second-largest export volume, and pepper, Cashew nuts<\/a> seafood, and other items have grown into major export products.<\/p>\n

However, behind this spectacular growth lurk serious structural challenges.<\/p>\n

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The Inefficiency Brought by a Small-Scale-Farm Structure<\/h2>\n

The biggest feature of Vietnamese agriculture is its extremely small-scale-farm structure.<\/p>\n

The average cultivated area is mostly under 1 ha, and many farmers hold only about 0.3 to 0.5 ha. At this scale, investment in mechanization is difficult, quality varies widely, and the structure makes standardization and price negotiation difficult.<\/p>\n

A Price-Setting Structure Dependent on Middlemen<\/h3>\n

Because smallholders are scattered, collectors (brokers) hold the power to set prices, and farmers have almost no bargaining power.<\/p>\n

Organized consolidation like Japan's agricultural-cooperative model is weak, and the structure makes it hard for farm incomes to rise. It is difficult for individual farmers to face the market on their own, and as a result dependence on middlemen rises, with most of the profit being absorbed at the distribution stage.<\/p>\n

Underdeveloped Processing Infrastructure<\/h3>\n

Secondary processing such as drying, milling, and extraction is still developing.<\/p>\n

As a result, large quantities of off-spec produce and surplus crops are generated. Rice, coffee, pepper, seafood, and more are mostly exported as raw materials or in a lightly processed state, and the reality is that in many cases the added value is captured on the overseas side.<\/p>\n

This situation of being \"stuck at primary products\" has become a major wall blocking the raising incomes<\/a> of farmers.<\/p>\n

\nSource<\/b>
\n
\nFoundation for International Development\/Relief (FIDR), \"Agriculture in Southeast and South Asia\"
\n<\/a>
\nprepared from\n<\/p>\n

\n

Crop Differentiation by Region and Environmental Challenges<\/h2>\n

Vietnamese agriculture shows clear crop differentiation by region.<\/p>\n

The Mekong Delta: The Country's Largest Granary<\/h3>\n

The southern Mekong Delta accounts for about half of Vietnam's rice production and nearly 90% of its export rice.<\/p>\n

Thanks to the alluvial soil and abundant water of the Mekong River, two to three crops a year are possible, and it boasts some of the highest land productivity in the world. In addition to rice, there are tropical fruit trees such as coconut, mango, and dragon fruit, as well as freshwater fish and shrimp farming<\/a> are also flourishing.<\/p>\n

However, in recent years, due to the effects of salt damage, single-crop rice cultivation has become difficult, and mixed operations such as \"rice plus shrimp\" and \"conversion to fruit trees\" are increasing.<\/p>\n

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The Worsening of Salt Damage and Structural Change<\/h3>\n

Salt damage in the Mekong Delta is worsening.<\/p>\n

Due to sea-level rise and the effects of upstream dams, in the dry season saltwater runs up inland, and the area where rice cultivation is impossible is increasing. As a result, structural changes such as switching to salt-tolerant varieties, conversion to fruit trees, conversion to aquaculture, and expanding reliance on groundwater are progressing.<\/p>\n

This environmental change is forcing farmers to acquire new techniques and make new investments, and cases where farmers unable to cope are compelled to leave farming are also increasing.<\/p>\n

The Central Highlands: The Core Region for Export Crops<\/h3>\n

The Central Highlands (such as Dak Lak Province) is the main producing area for coffee, black pepper, and cashew nuts.<\/p>\n

The volcanic soil and the climate conditions at 500 to 800 m elevation suit these crops. However, reliance on single crops is strong, and it also carries a vulnerability to being directly affected by international prices and drought.<\/p>\n

The Northern Red River Delta: Peri-Urban Agriculture<\/h3>\n

This is a peri-urban farming belt that includes the capital, Hanoi, centered on intensive cultivation of leafy vegetables and fruiting vegetables in addition to rice.<\/p>\n

Here the feature is a higher ratio geared to domestic consumption than to export. In peri-urban villages that have faced farmland expropriation for industrial-park development, with the growth of employment in other industries, centered on young labor as the local labor market develops, the standing of farm income in the farm economy has fallen greatly, and there is a tendency for departure from agriculture to be noticeably progressing.<\/p>\n

\nSource<\/b>
\n
\nJ-Stage, \"Changes in Rice-Farming Structure and Farm Economy in Vietnam During Its Industrialization Period\"
\n<\/a>
\nCompiled from (April 2022)\n<\/p>\n

\n

Aquaculture: Another National Strategic Industry<\/h2>\n

The national strategic industry that stands alongside agriculture is aquaculture.<\/p>\n

In the Mekong Delta, shrimp farming<\/a> and pangasius (catfish) farming are carried out on a large scale, forming a pillar of exports to Japan, the EU, and the United States. A value chain linked to frozen-processing plants has been built, and a model of earning foreign currency through \"production plus simple processing\" has been established.<\/p>\n

In this field, obtaining international certifications, managing residual chemicals, and handling traceability are advancing, and moves to respond to tightening regulations in export destinations can be seen.<\/p>\n

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Practical Solutions: International Certification and Smart Agriculture<\/h2>\n

Practical solutions to the structural challenges are being explored.<\/p>\n

Promoting GlobalG.A.P. Certification<\/h3>\n

Against a backdrop of tighter regulations in importing countries, the acquisition of international certifications such as GlobalG.A.P. is advancing.<\/p>\n

Through this, residual-pesticide management and traceability handling are strengthened, and competitiveness in international markets improves. Although obtaining certification is a heavy burden for small-scale farmers, through the formation of cooperatives<\/a> and group-certification schemes, its spread is gradually advancing.<\/p>\n

The Adoption of Smart Agriculture<\/h3>\n

The introduction of smart agriculture, such as drone-based pest control and IoT irrigation, has also begun at some large farms.<\/p>\n

However, its spread is limited, and the vast majority of small-scale farmers still practice labor-intensive farming. Technology adoption requires initial investment, and it is difficult for small-scale farmers to adopt it on their own. For this reason, cooperatives<\/a> and tie-up models with companies are becoming important.<\/p>\n

The Farmer-Factory-Distribution Linkage Model<\/h3>\n

Based on Decree No. 98\/2018\/ND-CP, a three-way linkage model connecting farmers, processing factories, and the distribution system is being promoted.<\/p>\n

This model serves as a solution to major challenges such as small-scale production, quality variation, and supply-demand imbalance. As of the end of June 2025, this agricultural value chain has recorded the achievement of approving a total of 2,938 projects and linkage plans, including 1,968 projects and 970 linkage plans.<\/p>\n

From an economic standpoint, this decree offers a strong financial incentive by providing 30% of the investment capital, up to a cap of 10 billion dong per project, for infrastructure-development projects such as machinery and equipment, factories, warehouses, and processing facilities.<\/p>\n

\nSource<\/b>
\n
\nB&Company, \"The Farmer-Factory-Distribution Linkage Model in Vietnam: Current State and Potential for Development\"
\n<\/a>
\nprepared from\n<\/p>\n

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Consolidation and Stronger Bargaining Power Through Cooperatives<\/h2>\n

The key to overcoming the challenges of small-scale farmers is forming cooperatives.<\/p>\n

In the current situation where individual farmers are dispersed, both price-bargaining power and quality management are difficult. By consolidating production through cooperatives, buying inputs jointly, and shipping jointly, dependence on middlemen can be lowered and farmers' take-home earnings can be increased.<\/p>\n

Concrete Benefits of Forming Cooperatives<\/h3>\n

Through forming cooperatives, the following benefits can be expected.<\/p>\n