Development of agro economic links between hanoi and its neighbouring provinces

MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY HOÀNG MẠNH HÙNG DEVELOPMENT OF AGRO-ECONOMIC LINKS BETWEEN HANOI AND ITS NEIGHBOURING PROVINCES Specialty : Agricultural Economics Code : 62620115 ABSTRACT OF DOCTORAL DISSERTAT ION IN ECONOMICS HANOI 2014 This doctoral dissertation is completed at the National Economics University Supervisors: 1. Assoc. Prof. Dr. Phạm Văn Khôi – NEU 2. Assoc. Prof. Dr. Nguyễn Văn Áng – MoET Offender No. 1: Assoc. Prof. Dr. Nguyễn Đình Long Offender No. 2: Assoc. Prof. Dr. Nguyễn Ngọc Sơn Offender No. 3: Assoc. Prof. Dr. Nguyễn Khắc Thanh The oral defense of this PhD. dissertation take place before the University-level Council at [place] ………………… at [time] …………… [date]…………….…. Available at Library:………………………… 1 INTRODUCTION 1. Rationale of the Study Geographically located in the centre of the Red River Delta (the RRD), Hanoi, the capital of Vietnam, has an extremely important location both to the country in general, and to the RRD and its neighbouring provinces in particular. Agriculture in Hanoi provides the city with farm products to meet its inhabitants’ diverse and growing needs. However, its increasing less farming land due to rapid urbanisation, issues of environmental protection and employment in its suburban districts have all been urging Hanoi to establish agricultural links with its neighbouring provinces. Over the past years, especially since its boundary expansion, Hanoi’s agro- economic links with its seven neighbouring provinces have been created, at first spontaneously and then increasingly proactively. Its neighbouring provinces’ additional provision of farm produce, formation of food and forest belts, and creation of detention reservoirs have made Hanoi a green city while Hanoi’s agriculture, with an advantage of being based in the country’s centre of sciences, have provided the provinces with models of approaching science and technology for producing precious specifies. Facing an increasingly rapid urbanisation in the coming years, Hanoi is going to have both increasingly less farming land and growing needs of farm produce in terms of quantity, quality, types, and food hygiene and safety; its issues of enviroment and employment are thus becoming more serious. As a result, development of agro-economic links between the capital and its neighbouring provinces is obviously an urgent requirement. Noticing the need to do research on the above-mentioned practical issues, the author has selected the topic “Development of agro-economic links between Hanoi and its neighbouring provinces” for his Ph.D. dissertation in economics. 2. Aims of the Study The study shall look at both theoretical and practical issues, evaluate the current situation of the agro-economic links between Hanoi and its neighbouring provinces, and then propose directions and solutions to promote development of agro-economic links between Hanoi and its neighbouring provinces to the year 2020. 3. Objects and Scope of the Study 4.1. Objects of the Study The objects of the study are agro-economic links between Hanoi and its neighbouring provinces in terms of form, nature, and link areas. In addition, the study shall look at factors that influence establishment and organization of implementation of those economic links such as the typical features of the linking parties, the role of macro-level management, impacts caused by industrialization 2 and modernization, and, especially, the urbanization rate of Hanoi and its neighbouring provinces. 4.2 Scope of the Study - Scope of the Contents: The dissertation shall study such major issues as (1) Theories on regional economic links and agro-regional economics; theoretical expressions in Hanoi’s agro-economic links with its neighbouring provinces; (2) Practical domestic and foreign issues as lessons of experience for development of agro-ecoomic links between the capital and its neighbouring provinces; (3) The reality of development of agro-economic links between Hanoi and its neghbouring provinces; (4) New opportunities and challenges in development of agro-economic links between Hanoi and its neghbouring provinces to the year 2020. - Spacial scope: The dissertation shall study the agro-economic links between Hanoi and its seven neighbouring provinces (i.e. Vĩnh Phúc, Phú Thọ, Bắc Ninh, Thái Nguyên, Hưng Yên, Hà Nam và Hòa Bình). - Temporal scope: The dissertation shall evaluate data of the period between 2000 up to the time of this study, with a focus on the period between 2008 and 2012 in which Hanoi has had an expanded boundary. 4. Methodology 4.1. Approaches - Approach to the objects of the study: This dissertation has approached agro-economic links between the two parties (i.e. Hanoi and its neighbouring provinces ) vertically and horizontally. It has approached the linking parties through such activities of state management as planning, plans, commitments, management coordination between business parties through joint-ventures, economic contracts… In addition, the dissertation has approached and researched influencing factors of agro-economic links between Hanoi and its neighbouring provinces. - Approach to the research space: This dissertation has approached agro- economic links in a two-way direction with Hanoi on one side and its neighbouring provinces on the other side. The dissertation does research neither on agro- economic links between Hanoi’s neighbouring countries, nor on Hanoi’s internal agro-economic links, nor on those within one of those neighbouring provinces. 4.2. Methods of the Study Apart from taking use of the general methodologies (e.g. dialectical materialism and historical materialism that are applied to study of phenomena in their movement and in a scientific and objective way), this dissertation applies such specific methods as expert consulting, document consulting, data synthesis, analysis, and processing, sociological survey. 5. New Contributions of the Study This dissertation has systemized and analysed the scientific background of agro-economic links, based on which to specify and find out the typical characteristics of the agro-economic links between Hanoi and its neighbouring 3 provinces. The author has investigated, surveyed, analysed and evaluated the reality of the agro-economic links between Hanoi and its neighbouring provinces in two periods of time (i.e. before and after Hanoi’s boundary expansion). The dissertation has found out achievements and limits of those links and their effects on production and life; in addition, it has indicated the causes of those achievements and limits, and it has provided the viewpoints, directions and solutions to promote the agro- economic links between Hanoi and its neighbouring provinces đến năm 2020. 6. Dissertation Organisation Apart from the Introduction, the Conclusion, the References, and the Appendix, this dissertation is organized into four chapters. CHAPTER 1 OVERVIEW OF RESEARCH OF AGRO-ECONOMIC LINKS BETWEEN HANOI AND ITS NEIGHBOURING PROVINCES Regional agro-economic links is among the rules that have much effect on production and life; therefore, this topic receives attention by scientists and managers internally and externally. In this part, the author has reviewed domestic and foreign research on agro-economic links between a capital city and its neighbouring provinces, based on studies of both classical and modern planning economists in various forms ranging from published monographs to research achievements of different master and doctoral dissertations, and to articles from journals and newspapers. The review has led to the conclusion that agro-economic links between a capital city and its neighbouring provinces as a topic has been little studied in other countries. In Vietnam, the topic of agro-economic links between Hanoi as the capital and its neighbouring provinces has not been fully studied to the size of a scientific research – there are therefore various gaps left for this dissertation, and this research does not overlap with the published studies available to the author of this dissertation. Based on that conclusion, the dissertation has identified the following topics for research: (1) Systemisation, clarification, and provision of viewpoints of theories on regional economic links, with a focus on clarification of objective background for agro-economic links and basic issues of regional agro-economic links. (2) Specification of issues of regional agro-economic links in development of those between the capital city and its neighbouring provinces. (3) Use of theoretical analysis framework in analysis of the reality of development of the agro-economic links between Hanoi and its neighbouring provinces; comparison of theoretical issues and the typical features of the economic link environment with the reality of development of the agro-economic links between Hanoi and its neighbouring provinces. (4) The study not only evaluates the reality of certain links in a specific space but also finds out the causes of the reality and solutions to overcome them. 4 CHAPTER 2 THEORETICAL AND PRACTICAL BACKGROUNDS OF AGRO-ECONOMIC LINKS BETWEEN HANOI AND ITS NEIGHBOURING PROVINCES 2.1. Theoretical background of the agro-economic links between Hanoi and its neighbouring provinces 2.1.1. Fundamental theories for regional agro-economic links The dissertation systemizes and analyses the theories on value chain of farm produce and labour division to clarify the background for region-based and sector- based agro-economic links in a region; the theories on growth poles as the basis for identification of the role and typical features of the agro-economic links between Hanoi and its neighbouring provinces. 2.1.2. Concept of agro-economic links between a capital and its neighbouring provinces Based on economic links, the dissertation provides the concept of regional agro-economic links, based on which it is argued that agro-economic links between a capital and its neighbouring provinces is a specific type of regional agro- economic links. In nature, it is also an economic link between production, supply, processing, and consumption of farm produce; transfer of scientific and technical advances and the management relationship of the governments and organizations between the capital city and its neighbouring provinces. However, the characteristic of being the capital provide a difference in agro- economic links between the capital and its neighbouring provinces, in which the differences from regional agro-economic links stem from the initiative of the capital agriculture, the coordinativeness in links, the strictness of farm product quality of a high purchasing power market, and being the country’s representative in international transactions. 2.1.3. Principles of agro-economic links between a capital and its neighbouring provinces Because regional agro-economic links and agro-economic links between a capital and its neighbouring provinces are both connections between economic parties, they are therefore both based on the principles of economic links and have typical expressions at different levels of economic link as follows: (1) To ensure development and increasing effect of production and business of different parties involved in a link. (2) All parties of agro-economic links between a capital and its neighbouring provinces must be voluntary and self-responsible. 2.1.4. The role of agro-economic links between Hanoi and its neighbouring provinces - In economic terms: Thanks to economic links, the neighbouring provinces’ agriculture can approach the capital’s large market that has high purchasing power and sell large amount of farm produce at higher prices. In contrast, the capital’s 5 agriculture can support its neighbouring provinces in producing high-quality products that improve production effects; help businesses and involved parties, especially the neighbouring provinces’ agriculture, to have more alert reactions to changes in the business environment; assist organizations, individuals, and businesses in transferring technologies to one another at low costs and in shorter time periods thanks to mutual trust and goals; and, to favour businesses in sharing production risks, especially in the current global market condition of many complicated changes. However, economic links have their own disadvantages such as a favour of monopoly and limit of competition between market parties that lead to damages for the buyer (caused by the seller’s monopoly) or those for the supplier (caused by the buyer’s monopoly). In addition, economic links may risk collapsing, even in a chain reaction, when either of the involved parties goes bankrupt. This situation may destabilize the economy. - In social and environmental terms: Economic links contribute to more employment, increased income for farming workers both when businesses or the provinces have advantages or difficulties. Those links provide an ability to supply and sell goods in the market in contribution to stabilization of the market, especially that of the capital. Economic links make organizations, individuals, and businesses work together and implement state policies consistently. Thanks to those links, the natural environment is properly exploited, protected and developed. 2.1.5. Content of agro-economic links between a capital and its neighbouring provinces Economic links are seen in two aspects: those between state management agencies in charge of the farming produce sector and those between the different agents in the farming produce sector, specifically as follows: - Economic links between the state management agencies of the capital and those of its neighbouring countries are (1) Links in planning and organization of implementation of regional agro-development planning. (2) Links in trade promotion, sale of farm produce, especially safe products in the capital’s market. (3) Links in coordination of state management in agriculture (i.e. plant protection, veterinary practice, management of water resources, research and exchange of science and technology, policy…) - Economic links between agricultural businesses of the capital and its neighbouring provinces are (1) Links in investment in exploitation of resources, in which the provinces have quite abundant resources and the city has better capacity of resource exploitation. As a result, each side can tap its own advantages. (2) Economic links in transfer of scientific and technological advances, which are based on exploitation of the capital’s businesses’ scientific and technological advantages and on its neighbouring provinces’ needs to update technology for production and business of farm produce. 6 (3) Links in agricultural production and processing and investment by the capital’s busineses in its neighbouring provinces to provide stable inputs for farm produce processing businesses in the capital. (4) Links between farm producers and sellers in the capital: This type of link is the most popular among the capital’s neighbouring provinces due to the currently limited condition for large-scale agricultural processing of Vietnam. 2.1.6. Forms of agro-economic links between the capital and its neighbouring provinces The current forms can be categorized into the following typical groups: - Links that turn small businesses into big ones in agricultural products: This form of link creates big corporation or economic groups, for example state corporations 90 or 91 in Vietnam. In this type of link, businesses can promote their size of capital and business results to compete in the market… This type of link is often organized on a large scale, even throughout the country, and in terms of a product or a group of products. - Economic links in form of unions of cooperatives: Economic links between economic parties, mainly in the form of a union of cooperatives, under which the member cooperatives join with one another voluntarily or through economic contracts. In a multisector economy, this type of link is available not only among cooperatives themselves but also between cooperatives and Trong nền kinh tế nhiều thành phần, mối quan hệ liên kết không chỉ hình businesses from the other economic sectors. - Processing contracts: This form is popular in sectors not requiring highly complicated economic links. This form of link in agriculture is found in the stages of preliminary processing of farm produce or traditional handmade processing. - Joint-ventures between independent businesses: This form involves either only domestic businesses or both domestic and foreign businesses. In terms of farm produce, such a joint-venture can be found when businesses cooperate in production, processing or selling in order to increase supplies of farm produce so as to meet big needs. One example is a link between farmers raising suckling pigs so as to meet an export need of tens of thousand tons of pog at a certain time. - Associations: Having quite a lot of variants, this link is formed between highly voluntary businesses, households, and individuals. Such a business association comes into being from businesses in one sector such as the Coffee- Cocoa Association, the Fisheries and Seafood Processors Association… 2.1.7. Factors influencing the agro-economic links between a capital and its neighbouring provinces The dissertation focuses on analyzing the following factors: (1) Economic policies; (2) Natural resources; (3) Market; (4) Technology; (5) Psychology and customs of producers and consumers; (6) Capital and forms of production organisation. Both the positive and negative aspects of the influences are 7 considered, and the author arrives at the conclusion that all influences must be taken into account to promote positive influences and limit negative ones so as to facilitate smooth economic links and produce expected results. 2.1.8. Assessing results and effects of agro-economic links between Hanoi and its neighbouring provinces - Assessment methods: Assessment must be carried out in two areas: (1) Results of agro-economic links seen in size and degree of link between the agricultural sector of the capital and that of its neighbouring provinces; (2) Assessment of economic results and effects of each activity by parties involved in a link process. Such assessment is conducted through a system of criteria for economic results and effects, but measurement and analysis of those criteria must pay attention to the requirement that calculations must be correct and sufficient without overlaps so as to result in the most exact cost figures. In analyzing the criteria, the relationship between results and costs and businesses’ goals of organizing production and processing must be taken into consideration. - The assessment criteria: + The criterion on degree of province-based participation in agro-economic links of the capital and that of its neighbouring provinces: (1) The rates of subjects involved in agro-economic links over the total number of subjects doing business in the farm produce sector of the capital and its neighbouring provinces. The rates are expressed in percentage and can be detailed into seven sub-criteria. (2) The degree of participation in agro-economic links in business of economic subjects. This is also expressed in percentage and detailed in accordance with each type of agricultural business involved in economic links. + The criterion that reflects the degree of satisfaction of linking needs between the capital and its neighbouring provinces, which includes: (1) The degree of the neighbouring provinces’ meeting the capital’s needs of farm produce. It is calculated by the total amount of farm produce of each type to be consumed by the neighbouring countries over the total need of farm produce by the capital. (2) The capital’s degree of supporting its neighbouring provinces’ agriculture, which is seen in such types of need as of capital, science and technology, managerial coordination… + The criterion that reflects the effectiveness of agro-economic links, which includes: (1) The criterion of overall economic effectiveness that is seen in its subcriteria of farm produce supply, treatment of environmental problems… (2) The criterion of effectiveness enjoyed by each party involved in a link, which can be seen in its increased turnover and profit of that party after involving in a link. 2.2. The practical background for agro-economic links between Hanoi and its neighbouring provinces After studying agro-economic links between the capitals of China, Japan, Thailand and Ho Chi Minh City with their respective neighbouring provinces, this 8 dissertation draws a number of lessons that can be applied to agro-economic links between Hanoi and its neighbouring provinces: First, all of the cities in question are based on their respective regional and agricultural planning for their links so that they can identify potentials and advantages of agricultural development and areas that can be mutually complemented, through which to identify link focuses. Secondly, the role of state management in agro-economic links, expressed in its establishment of a proper economic and legal environment for the links. Thirdly, agro-economic links are realized by agro-economic parties. If a country’s policies focus on improving the parties’ capacity in all aspects, those links will take place spontaneously and highly effectively. Thứ tư, agro-economic links between a capital and its neighbouring provinces promote the principle of voluntariness on one hand and, on the other hand, the capital agriculture should be proactive in those links. If a country could deal with this issue well, agro-economic links will take place proactively and thus result in higher achievements. CHAPTER 3 THE REALITY OF AGRO-ECONOMIC LINKS BETWEEN HANOI AND ITS NEIGHBOURING PROVINCES 3.1. Natural, economic and social characteristics of Hanoi and its neighbouring provinces that affect economic links This dissertation has looked at the natural, economic and social characteristics of Hanoi and its neighbouring provinces that affect economic links, based on which it has found out both positive and negative influences: - Advantages and needs of links: (1) As the national political, cultural, and economic centre, Hanoi has required the other provinces to support it attentively. Its neighbouring provinces have both their respective advantages and responsibility for Hanoi. (2) The terrain and river system in the Red River Delta stretch from northwest to southeast, increasingly downward through Hanoi and its neighbouring provinces. Therefore, their agricultural production and water exploitation must be cooperated. (3) The resource relationship, especially that between land and population, of Hanoi and its neighbouring provinces is so improportional that it provides a favourable condition for Hanoi and its neighbouring provinces’ cooperation in agricultural development, especially in production and consumption of farm produce. (4) Hanoi’s market has a high purchasing power and requires high-quality produce. The link between production and consumption is increasingly so close that its agriculture, especially its farm produce consumption, must be increasingly closely linked to other provinces’ production, processing and transport. 9 (5) Both the positive and negative influences of industrialization and modernization require Hanoi and its neighbouring provinces to mutually solve them successfully. - Difficulties against agro-economic links: (1) Hanoi’s boundary expansion has increased both the size and complicatedness of those links. (2) The speedy industrialization and modernization processes both result in pressure of dealing with problems in links that require big resources to conduct and much effort to overcome big consequences. (3) The development of a market economy, with an aim to gain profit, may make producers abuse fertilisers, insecticides, vetenary medicine, and man-made animal food that may negatively affect farm produce quality and thus give pressure on agro-economic links between Hanoi and its neighbouring provinces. (4) The knowledge, especially that of international integration and legal issues on economic matters of the inhabitants, especially thos in Hanoi’s neighbouring provinces, remain limited. 3.2. Overview of agricultural development in Hanoi and its neighbouring provinces since Vietnam’s renovation 3.2.1. The agricultural growth rate of Hanoi and its neighbouring provinces: Prior to the year 2000, Hanoi expanded its boundary to include some districts of the (former) province of Ha Tay before it contracted itself. Between 2000 and 2007, Hanoi’s farming activities were mostly found in five of its districts (i.e. Sóc Sơn, Đông Anh, Từ Liêm, Thanh Trì and Gia Lâm). Having limited resources, especially limited farming land that decreases at 1% per year, Hanoi’s agriculture keeps developing and growing at 1.87% per year and still plays an important role in the capital’s economic structure. Hanoi’s neighbouring provinces enjoy higher growth rates than the capital. The five provinces reach an average growth rate of 4.34% per year in value of agriculture production, with Bắc Ninh having the lowest annual rate of 2.65% and Thái Nguyên enjoying the highest rate of 6.53%. Between 2008 and 2012, after expanding its boundary, the capital had much more resources and thus gained an average growth rate in that period slightly more than twice as high as that gained between 2000 and 2007 (i.e. 3.78% per year and 1.87% per year respectively). Though Hanoi had three more neighbours (i.e. Phú Thọ, Hà Nam and Hòa Bình) in exclusion of one (i.e. Hà Tây), its neighbouring provinces enjoyed a mere average growth of 3.54 % in this period. Noticeably, their agricultural production value went down from 8.65 times in 2007 to merely twice as much as that of Hanoi in 2012. 3.2.2. The structural shifting tendency of the agriculture in Hanoi and its neighbouring provinces - Between 2000 and 2007: It was seen in Hanoi that the sectors of farming, forestry and fisheries corner a very low proportion of its economy and tends to 10 decrease by 0.2 percent annually on average. The structure of its farming, forestry and fisheries shifted positively with its breeding proportion gradually increased from 34.1% in 2000 to 37.02% in 2002 and to 47.5% in 2007; its growing sector slowly decreasing from 64.7% in 2000 to 60.5% in 2002 and 48.1% in 2007; and, farming services increasing correspondingly. Hanoi’s neighbouring provinces experienced different decreasing proportions of farming, forestry and fisheries. The changes of the proportion of farming, forestry and fisheries in the direction and at the rate mentioned above formed the relationship of those fields between Hanoi and its neighbouring provinces and provided a quantitative demonstration of the needs to link different provinces in he region. - Between 2008 and 2012: Hanoi enjoyed a quite big increase of resources thanks to its boundary expansion during the period. The share of its agriculture, forestry, and fisheries within the capital’s economic structure thus increased (6.6% in 2008 from 1.75% in 2007), but the proportion then quickly went down to 5.2% in 2012. - Hanoi’s boundary expansion made two additional provinces become its neighbours (from five to seven provinces) and thus changed the share of agriculture, forestry and fisheries in the overall economic structure of its neighbouring provinces. As a result, the structural contrast between Hanoi and its neighbouring provinces has experienced little change. 3.2.3. Sectoral development in agriculture of Hanoi and its neighbouring provinces - Hanoi: The capital’s crop structure has shifted towards cash-crop products. Its high-quality production area has gradually grown; production of vegetables has increased quite much with an initial results of some areas specialized in safe vegetables, flowers or fruit; and, some high-tech models have been introduced. Though the scale and size has been decreasing, the production value of the crop production sector keeps increasing, though at moderate rates. The livestock sector grew quite positively between 2000 and 2005 and slowly from 2006 to 2012. There have been some centralized livestock models, but environmental pollution and disease control are urgent issues. Hanoi’s fisheries has developed quite well. Some one-crop rice-growing and low areas have been transformed into fisheries-based models or those with one rice crop and one fishery crop a year. As a result, the capital’s fishery production has increased not only because of its boundary expansion but also because of the sector’s growth in the following years. In contrast, Hanoi has a limited forest area, and its forestry grows quite moderately. - Hanoi’s neighbouring provinces: The provinces’ crop production sector has also shifted towards more production effectiveness and goods production. As a result, rice production tended to reduce while farming of vegetables, bean, industrial plants and cash-crop plants tends to grow. 11 Strong shift from crop production to livestock husbandry, together with strong promotion of raising pigs, poultry, cattles, and specialty animals, has provided Hanoi and its neighbouring provinces a new growth (the dissertation has conducted in-depth analysis of each type of major products in the neighbouring provinces and compared the agricultural development of Hanoi and the provinces in the region). 3.2.4. Assessment of the possibility of agro-economic links between Hanoi and its neighbouring provinces - The capacity of farming production versus the needs of farm produce of Hanoi: Hanoi’s agriculture can just meet 69% of its own need of cattle meat; 32% of its need of fish; 84% of its need of eggs; 19% of milk; 38% of rice; 33% of fresh vegetables; 18% of fresh fruit. Hanoi therefore becomes an ideal farm produce market for its neighbouring provinces, which have a geographical advantage over other provinces. If this advantage is taken, the neighbouring provinces’ agriculture will have a large-enough market, which is among the burning issues of Vietnam’s agriculture. - The relationship between the supplying neighbouring provinces and Hanoi: This is seen mainly in their supply of food and foodstuff to the capital and the latter’s transfer of technology, seeds, breeds, etc. which possess the following characteristics: (1) The capital’s increasingly higher demands in terms of quantity, quality and type; (2) Issues of food hygiene that requires increased coordination in supervision; and, (3) Increased competition due to international integration. Besides, green rings, detention reservoirs, and exploitation of Hanoi’s strengths are also issues of potential links. 3.3. The reality of agro-economic links between Hanoi and its neighbouring provinces during modernisation 3.3.1. The development reality of agro-economic links between Hanoi and its neighbouring provinces prior to the year2008 - Before 1990 (Hanoi made up of 11 districts and one town): This period saw many boundary changes, so Hanoi’s suburban expansion can be seen as agro- economic links in those years. Though links were conducted directly through administrative-economic measures within a province or city (along with a subsidy mechanism and local protectionism). Direct links between Hanoi’s agricultural businesses and those of the other provinces and cities in the same region were rare. - Between 1991 and 2000: Hanoi’s boundary was changed again in 1991 with the transfer of the five previous districts and one town (formerly taken from Hà Sơn Bình province in 1978) to Hà Tây and of Mê Linh district to Vĩnh Phú. Hanoi then had only four inner and five outer districts, with a natural landmass of 924 km². The administrative boundary change and, especially, the shift from the centrally planned economic management to a market mechanism accordingly changed the agro-economic links between Hanoi and its neighbouring provinces. 12 (1) Economic links through macro-economic management activities: Those links are seen in general plannings of the Red River Delta, Hanoi and its neighboring provinces, which was symbolized by the establishment of the Research Centre for the Red River Delta and the implementation of the Overall Planning for Socio-economic Development of the Red River Delta in the period of 1996-2010, which mentioned various issues of the region and links between the provinces in the same region. The overall planning for socio-economic development of Hanoi and its neighbouring provinces mentioned links in socio-economic development between the capital and the provinces and cities in the Red River Delta and its neighbouring provinces. The ideas and guidelines mentioned in those plannings had been carried out. Noticeably, the main issues mentioned by the agricultural planning of Hanoi and its neighbouring provinces had been gradually deployed with quite good results. (2) Economic links betwwen agricultural businesses: There were links in production and supply of farm produce, transfer of scientific and technological advances … specifically as follows: + There were models of links between Hanoi’s agricultural business with the provinces in the same region such as the investment waves of Hanoian residents in the provinces of Vĩnh Phúc, Hà Tây, Bắc Ninh, and Hưng Yên for development of farm economy; cooperation between producers and especially processors of Hanoi with producers of the regional provinces such as links between Hanoi’s green rice flake producer with those in Hà Tây, Hưng Yên, Thái Bình, Nam Định in supply of input sticky rice. Table 3.1: Quantity of some farm produce and related goods supplied by the neighbouring provinces to Hanoi, period: 1995-1998 Unit: ton Farm product 1995 1996 1997 1998 1. Food (in rice terms) 349,923 358,910 369,235 380,500 2. Fresh vegetables 160,928 165,063 170,025 175,000 3. Fresh fruit 29,750 30,163 31,853 33,000 4. Raw pog 179,328 183,936 186,554 192,000 5. Cooking oil 11,052 11,565 11,914 12,344 6. Aquaproducts 15,120 17,430 19,610 20,480 Source: Hanoi Department of Trade + There were models of links in supply of farm produce: This type of agro- economic link between Hanoi and its neighbouring provinces was most popular during this period though those links came quite spontaneously from the parties’ benefits in exploiting the capital’s market. The links in supply of farm produce for Hanoi have been diverse in form and active in action. However, the supply of farm 13 produce from the neighbouring provinces to Hanoi was mainly dominated by the private sector, especially by small business people. + In terms of science and technology, Hanoi started having agricultural research models, but transfer of scientific and technological advances remained in the form of its study visit by its neighbouring provinces while cooperation for transferring those advances to the provinces weren’t carried out. - Between 2001 and 2007: This period witnessed a very rapid urbanization in Hanoi with the establishment of new districts of Cầu Giấy and Thanh Xuân in 1997 and Long Biên and Hoàng Mai in 2005; various new industrial zones in Đông Anh, Sóc Sơn, and Gia Lâm districts reduced the size of agricultural production. These new developments put pressures on promoting agro-economic links between Hanoi and its neighbouring provinces; therefore, the agro-economic links between Hanoi and its neighbouring provinces had had certain changes compared to the previous period, specifically as follows: (1) Issues of agro-economic links between Hanoi and the provinces in the metropolitan zone, especially those being adjacent to it, continued to be realized in Plannings of the Hanoi Region and General Plannings of Hanoi and Its Neighbouring Provinces. It is worth noting that the central role and the initiative of Hanoi had been appreciated in such links. (2) Activities of link establishment through state management documents were in an initiation stage with only a few cooperations established between Hanoi and its neighbouring provinces. Most contents of such cooperation remained in written plans. Hanoi at that time had bigger and wider plans of cooperation such as with Lâm Đồng and Thanh Hoá, or in rice growing with Mozambique… while it paid little attention to cooperation with the provinces within the Hanoi Metropolitan Zone, including its neighbouring provinces. (3) Economic links between businesses: These are the most vibrant links which had new progress compared to the previous period, among which the typical examples were as follows: + The previous waves of investment in farm-economy development were replaced by Hanoi’s real business and investment activities in the fields of agriculture, forestry, and fisheries in other provinces, including its neighbouring provinces such as investment in flower growing in Vĩnh Phúc, Hưng Yên…, investment in fisheries in Hưng Yên and Bắc Ninh, investment in farm produce processing such as Anh Thái Poultry Factory in Hà Tây with gradual developments. + Linked supply of farm produce increased in quantity of farm produce and number of supply forms. This was still the most vibrant form of the agro-economic links between Hanoi and its neighbouring provinces at the time. As a result, the size of farm produce supply had increased. + Links in transfer of scientific and technological advances developed in two aspects: both simultaneously by agricultural businesses and proactively by state management agencies and farm extension organisations. 14 Table 3.2: Hanoi’s Need and Neighbouring Provinces’ Supply of Farm Produce to Hanoi in 2005 Unit: ton No. Type of farm product Hanoi’s need Hanoi’s production Provinces’ production 1 Food in rice terms 750.0 215.7 534.3 2 Aquaproducts 50.0 10.43 39.57 3 Meats 300.0 120.0 180.0 4 Vegetables 300.0 125.0 175.0 5 Fruits 80.0 27.5 52.5 Source: Hanoi Department of Commerce General assessment: Before 1990, agro-economic links were conducted directly through administrative measures. Between 1990 and 2000, the links between Hanoi and its neighbouring provinces had new opportunities and developments in the aspects of state management and business activities. Relationships in fact expanded, together with the market economy mechanism, with more forms of link than the previous period. From 2001 to 2007, demands of agro-economic links between Hanoi and its neighbouring provinces kepts increasing. However, the links had not had qualitative changes, and spontaneous links between agricultural businesses remained dominant. 3.3.2. The development of agro-economic links between Hanoi and its neighbouring provinces between 2008 and 2012 This period witnessed a boundary expansion of the capital with its landmass increasing to 3.6 times as large and its population to 1.8 times as big. Because Hanoi’s suburban districts increased from five to eighteen, the city’s agricultural production correspondingly increased in size. It was a fact that the agro-economic links between Hanoi and its neighbouring provinces remained in two scopes: links in state management activities and those between producers, businesses and service providers. However, the links changed complicatedly in both positive and negative directions, specifically as follows: - Links in state management activities: + In this period, Hanoi and its neighbouring provinces reviewed their plannings and organized planning for the period of 2010-2020 with the vision to the year 2030 or 2050. In those plannings, they all identified their targets, directions of resource uses, development of agricultural services, and arrangement of agricultural development projects in mututal relationships. Agro-economic links were realized in their identification of agricultural functions of each province within the region and, especially an emphasis on the role of agriculture in the general development of the region. In its planning, Hanoi identified its agricultural development through formulation of intensive production areas, green and ecological rings, and high-tech 15 agricultural zones. Its neighbouring provinces’ plannings all mentioned agricultural production of goods and considered Hanoi as a potential market. Agro-economic links between Hanoi and its neighbouring provinces in their respective plannings were still paid attention to. Those attentions were not only seen in planning directions but also in provision of projects on arrangement of agricultural production in those provinces. Examples include Hưng Yên province with an emphasis on bonsais and flower growing in its district of Văn Giang, on centralized zone of pig raising in its district of Khoái Châu; Hà Nam with an emphasis on poultry raising, and high-quality rice growing … + Hanoi improved its initiative in policy-making and control and supervision of farm produce circulation. The city issued policies to enhance links in supervision ò farm produce circulation and disease control. Noticeably, Hanoi managed to sign a cooperation programme in prevention and control of diseases, control of animal slaughtering, animal products and production and consumption of safe vegetables with 16 other provinces and cities in North Vietnam. In deploying the programme, Hanoi Department of Agriculture and Rural Development provided information on trade and investment promotion and cooperation between Hanoi and the other signing provinces in order to inform organisations, businesses and individuals in need of such information. Hanoi received information from five other signing provinces on their agricultural development programmes, supporting policies, high-tech business models, and provincial agricultural businesses in need of product promotion. - Agro-economic links between businesses: This form of link still remained dominant among the agro–economic links between Hanoi and its neighbouring provinces. However, there were new forms and natures of those links, specifically as follows: + Investment links in production and business came to a stop because previous investments in farm economy development were actually those in properties, and Hanoian investors in the neighbouring provinces all fled when real estate business went down, with nearly no more new investments in the field. In addition, Hanoi’s real investments in other provinces’ agricultural business decreased due to a lack of cohesion between respective parties and an absence of a proper economic and legal environment because those links were mostly spontaneous. Those investments were mainly in high technology for hygienic farm produce. However, there were then forms of agricultural production in the neighbouring provinces that were specialized in supply Hanoi with farm produce. They could be seen as deployment of the neighbouring provinces’ agro-development planning with considerations of Hanoi market’s characteristics. Examples were peach flower and kumquat plant growing in Văn Giang; safe vegetable growing in the communes of Yên Phú and Hoàn Long, Yên Mỹ district, Hưng Yên province or in Trung Nghĩa commune, Hưng Yên city; or high-quality rice growing in Hà Nam. 16 The dissertation has conducted a quite thorough survey of those models in the provinces of Hưng Yên, Bắc Ninh, and Hà Nam and found out that producers in the neighbouring provinces held initiatives in agro-economic links under those models. Those producers deployed the provinces’ plannings with consideration of Hanoi’s market while Hanoi did not really trigger their activities. The tendency formed sources of farm produce from the neighbouring provinces to Hanoi, but with arisen problems of food hygiene in the following stages because Hanoi could not supervise them from their origin. + The links in farm produce processing and consumption remained in two major forms: fresh products for consumers’ processing and use (e.g. fresh vegetables, fish, live poultry …) and processed or preliminarily treated products for consumers’ continued process and use. The links were conducted through many channels and by many processors and sellers. Compared to the previous period, this form was still the most dominant, diversified, and effective one, yet also with many negative issues. The specific links during that period were as follows: 1) Direct links between small producers in the neighbouring provinces and farm produce retailers in Hanoi: The small-scale producers in the neighbouring provinces, active to some degree and accounting for 5 to7%, had relatives living in the capital or had vehicles to directly transport their farm produce to retailers in contact markets or retail markets. They could supply very small amount of farm produce such as 30 to 50 kg of poultry or fish, 50 to 70 kg of vegetables, fruit, fresh flowers and bonsai … Their major means of transport was the motorbike, and their buyers were familiar retailers. 2) Links between provincial producers and groups of Hanoian consumers: This type of link existed between consumers in one office or residential area with farm producers in their home country, mainly in Hanoi’s neighbouring provinces. The former ordered the latter to produce and transport farm products to Hanoi for their office- or neighbourhood-based consumption. This type of link was spontaneously and orally made between the consumer and the producer because the state management of food hygiene control played a loose role. 3) Links between provincial producers and farm produce collectors, processors and retailers: This channel of distribution is a link throughout a chain of farm produce value. It was quite popilar in the links between farm production and consumption between Hanoi and its neighbouring provinces. Under such a link, a producer sold farm produce to a collector who in his turn sold them to processors of pog, beef, buffalo meat, and poultry and to preliminary processors of vegetables and bean; large-scale processed products were then distributed to retailers who would in turn sell them directly to end-users. A dominant advantage of this type of link is that they are large-scale ones with highly specialized linking parties. However, its biggest limits are its many 17 intermediate stages that raise the price and the difficulty in control of farm produce hygiene (it was a fact that food hygiene was seriously violated). Table 3.3: Collective investigation of farm produce supply at four contact markets in Hanoi, May 2013 Product Province of origin Daily quantity (kg/piece) Monthly quantity (kg/piece) Monthly turnover (million VND) Means of transport 1. Beef Phú Thọ 80 2,500 225 Motorbike Hòa Bình 70 2,100 336 Motorbike 2. Pog Bắc Ninh 70 2,000 180 Motorbike Hưng Yên 280 8,400 672 Motorbike Phú Thọ 400 4,000 350 Coach 3. Poultry Phú Thọ 75 2,000 140 Motorbike Bắc Giang 30 - 40 800 - 1,200 40 Motorbike Hà Nam 50 1,500 120 Motorbike Bắc Ninh 50 1,500 90 Motorbike Eggs Hưng Yên 1,000 10,000 30 Motorbike 4. Vegetables & bean Phú Thọ 80 - 200 2000 - 5,600 38.0 - 42.0 Motorbike Vĩnh Phúc 60- 500 1,500 - 9,000 20.0 - 45.0 Motorbike, coach Thái nguyên 150-200 450 – 2,000 20.0 - 48.0 Motorbike, coach Hòa Bình 300 3,600 - 7,500 35.0 - 200.0 Motorbike, coach Hưng Yên 50 - 350 800 – 4,400 25.0 - 56.0 Motorbike, coach 5. Flowers Vĩnh Phúc 3,000 80,000 63.0 Motorbike Source: Interviews and investigation of private traders at four contact markets in Hanoi 4) Other links: examples of them include those to realize the Price Stabilisation Programme for Necessities and Hanoi’s farm produce, and activities of some Hanoi-based central farm produce businesses and those of local businessses. 3.3.3 Achievements, limitations, and issues to be settled of agro-economic links between Hanoi and its neighbouring provinces - Achievements: (1) The agro-economic links were available in every development stage of Hanoi and its neighbouring provinces’ agriculture. The degree of cooperation has been increasingly growing along the process from self-subsidy agriculture to production of agricultural goods. (2) There have been changes in those links and their methods of implementation, which can be seen in administrative measures that formulated foodstuff rings, circulation and sale of farm produce through purchase from farmers, the planning of farm-specialized regions, free circulation of farm produce, and market-based consumption of farm produce. 18 (3) There have been initial changes in organization of links between the state management of agriculture between Hanoi and its neighbouring provinces. (4) There have been proactive cooperations in farm production between the neighbouring provinces, which were seen in their selection of production sectors, especially in their orientation of quality criteria that met Hanoi’s requirements and tastes such as super-lean pog, high-quality farm produce, etc. (5) The supply system of farm produce for Hanoi has been expanding to meet Hanoian people’s need satisfactorily and even plentifully, both during the year and during the New Year holiday. As a result, Hanoian inhabitants’ need of farm produce has been sufficiently met in quantity terms and increasingly satisfied in quality terms while farmers in the neighbouring provinces could sell their produce at high prices with little left unsold because Hanoi’s market had a big demand and purchasing power. (6) The agro-economic links have favoured producers, processors, and suppliers in the neighbouring provinces as well as distributors and, especially, consumers in Hanoi. Those links have also helped producers turn to cash-crop plants and animals and thus have higher turnover and profit: their turnover increased at 20% to 30% per year; their price-based profit 3 to 5% per year. The links have provided Hanoian processors and distributors with stable and high-quality input so that both the processing capacity and the processing quality have been improved, and their turnover and profit have grown, too. - Limitations and issues to be settled: Apart from the above-mentioned achievements, the agro-economic links between Hanoi and its neighbouring provinces still suffer from the following basic limitations: (1) Although the need of agro-economic links between Hanoi and its neighbouring provinces appeared even during the days of the centrally planned economy and has been increasingly urgent, deployment of those links in macro management terms has been extremely slow. In addition, the links were unstable and mainly orally made. Some links were made into contracts but their legality and legal implementation remained weak, and the different forms of business cooperation had no economic basis for their survival. A major cause stemmed first from governments and linking parties’ vague and incorrect awareness of the need, role, and benefit of agro-economic links between Hanoi and its neighbouring provinces. It also came from people’s low awareness and sense of the law as well as from a slow awareness of Hanoi’s proactive role in organization of such links and treatment of arisen relationships during their implementation. As a result, to improve awareness of such links and sustainable implementation of them is an urgent need. (2) The forms of economic links remained quite preliminary. Joint-ventures and business contracts were rare and unstable. The past links were often on a small [...]... for development of agro- economic links between Hanoi and its neighbouring provinces 4.1.1 Development viewpoints of agro- economic links between Hanoi and its neighbouring provinces - Agro- economic links must abide by the plannings of the Hanoi Region and the regional provinces agricultural development - Hanoi s proactiveness and the provinces active coordination in organization of such links must be... Forms of the agro- economic links between Hanoi and its neighbouring provinces must be diversified - Involved parties’ benefits must be paid special attention to 4.1.2 Directions for development of agro- economic links between Hanoi and its neighbouring provinces - Development of agro- economic links between Hanoi and its neighbouring provinces to the year 2030, with a vision to the year 2050: Hanoi s... Sections of Hanoi and the provinces Departments of Agriculture and Rural Development, with the standing role vest into Hanoi s Department of Agriculture and Rural Development 4.2.3 Promoting the role of state management in development of agro- economic links between Hanoi and the neighbouring provinces Agro- economic links between Hanoi and its neighbouring provinces are implemented at both macro and micro... Directions of agro- economic links between Hanoi and its neighbouring provinces: (1) Agro- economic links between Hanoi and its neighbouring provinces should be expanded to meet requirements of the provinces sharp shift to agricultural commodity production; economic links between Hanoi and the provinces should be comprehensively tapped to meet Hanoian people’s needs of farm produce in the context of increasing... production, livestock, and fisheries of 40%, 50%, and 10% respectively by 2015 and 34.5%, 54%, and 11.5% respectively by 2020 - Direction of development of agro- economic links between Hanoi and its neighbouring provinces: + Directions of economic links between Hanoi and its neighbouring provinces: Hanoi is to promote every potential and advantage of the Capital Region to develop itself into a modern... awareness of agro- economic links between Hanoi and its neighbouring provinces Agro- economic links between Hanoi and its neighbouring provinces has in fact been perceived inadequately at both the macro and micro level; therefore, communication for better awareness should be the first solution The communication contents should focus on the needs of such links, with clarification of benefits from agro- economic. .. possibilities of exploitation remain untapped, and many limitations need overcoming The objective of policy revision and completion is to establish economic and legal environments for effective development of agro- economic links between Hanoi and its neighbouring provinces The focus is on policy-making and coordination in policy implementation Policy-making for development of agro- economic links between Hanoi and. .. made agro- economic links between Hanoi and its neighbouring provinces mainly spontaneous and negative influences of farm produce safety and hygiene occur at an alarming state that seriously affect consumers’ health Between 2013 and 2020, objective conditions for development of agroeconomic links between Hanoi and its neighbouring provinces will keep increasing Urbanisation, industrialization, and modernization... provinces Linking production, processing, and consumption of farm produce is both an aim and a task for development of cooperative agricultural links between Hanoi and its neighbouring provinces The need to realize this solution has been demonstrated The development process of agro- economic links between Hanoi and its neighbouring provinces has shown both its achievements and limitations, especially negative... 4.2.2 Revision and modification of plannings, and evaluation of potentials and opportunities for development of agro- economic links between Hanoi and its neighbouring provinces Hanoi and all of its neighbouring provinces have completed their respective planning to the year 2020 and with the vision to the year 2030 and 2050 Their plannings have been deployed for almost three years, so some of their forecasts . situation of the agro-economic links between Hanoi and its neighbouring provinces, and then propose directions and solutions to promote development of agro-economic links between Hanoi and its neighbouring. Revision and modification of plannings, and evaluation of potentials and opportunities for development of agro-economic links between Hanoi and its neighbouring provinces Hanoi and all of its neighbouring. BETWEEN HANOI AND ITS NEIGHBOURING PROVINCES 4.1. Viewpoints and directions for development of agro-economic links between Hanoi and its neighbouring provinces 4.1.1. Development viewpoints of agro-economic