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.
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(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.
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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.

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(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
19
scale and mainly by farmers in the neighbouring provinces’ specialized farming
areas.
It was mainly because agricultural production in the neighbouring provinces
remained so scattered and small-scaled that it could not provide sufficient
conditions of quantity and quality for needs of link. Therefore, producers’ capacity
must be improved, and cooperation scale must be expanded.
(3) The spontaneity was highly seen in the agro-economic links between
businesses. Though the links over the past years both helped Hanoi to deal with its
shortage of farm produce and contributed to promotion of the regional provinces’
market, there arose disease problems in farm produce traffic, food hygiene and
safety, and street order.
The major cause stemmed from the absence of a proper legal environment for
such links and a lack of relevant legal documents for establishment of proper
control and treatment of those arisen problems.
(4) Benefits from those links have not been paid relevant attention to while
such links were all aimed at the parties’s benefits. This reality demonstrated loose
bindings in such links.

CHAPTER
4
DIRECTIONS AND SOLUTIONS FOR DEVELOPMENTS OF AGRO-
ECONOMIC LINKS 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 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 promoted.
- 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 Regional Planning to the year 2030, with a vision to the year 2050, has
identified the following objectives: stabilizing farming areas as planned;
development of agriculture in close tie with formulation of the city’s green rings,
hygienic vegetable, flower and bonsai growing areas which are supported by a
20
distribution system convenient for the people; improving the productivity and
quality of farm produce and food safety; improving the production effectiveness
and value per farming land unit; establishing large-scale intensive farming
commodity production areas on, for example, vegetables, flowers, livestock,
fisheries, etc.

The Regional Planning estimates an average farming production value of
approximately 245 million VND per hectare by the year 2030; the average growth
rate of the agriculture, forestry, and fisheries being 1.5-2% per year in increased
value between 2011 and 2020; and, a structural shift within the farming sector
towards both reduction of crop production and increase of livestock and fisheries
proportion, so as to reach the planned ratios of crop 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 metropolitan centre, with every respective function and
advantage, in the region as well as in Asia; to solve existing problems and conflicts
that affect the general development process of the whole region; to achieve
harmonious development with reduced concentration on the capital through
building a regional technical infrastructure system that facilitate economic
development, environmental protection, and sustainable development for the whole
region. Accordingly, economic links between Hanoi and its neighbouring provinces
should focus on (1) cooperative links in planning and organization of development
of economic sectors in line with the plans; (2) cooperative links in investment in
and construction of the infrastructure system; (3) cooperative links in human
resource development and information exchange; links in development and
deployment of mechanisms and policies.
+ 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 urbanization, international economic

integration, and competition between foreign and domestic farm produce.
(2) There should be a combination between settling currently complicated and
pressing problems of farm produce safety and hygiene, and finding basic solutions
for coordination in farm production, processing and consumption.
(3) Every tool for organizing economic links must be used with a focus on the
role of state management in provision of economic and legal environments for
21
development of those links. Combined strength of the different economic sectors
must be promoted in implementation of those links.
(4) Agriculture’s linking models, especially major ones, between Hanoi and the
neighboiring provinces must be diversified.
4.2. Solutions for promotion agro-economic links between Hanoi and its
neighbouring provinces
4.2.1. Communication for better 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 links between Hanoi and its
neighbouring provinces, and possible consequences arisen from improper links or a
lack of those links. Scientists, state managers, and socio-political organisations
should cooperate in making such communication, whose activities can be done
through integration into different courses. The fund for communication should be
diversified with yet relevant budget from the governments.
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
have been outdated. However, it is noteworthy that the planning order and approval
the overall plannings were not quite rational and that the overall plannings,
especially the one for the Hanoi Region, have just been approved while the
provinces’ were ratified earlier. In addition, the plannings are not highly
systematic. As a result, it is important that the plannings be revised for
synchronization as the basis for evaluation of requirements, potentials and
advantages for development of economic links so that the capital and the provinces
can have a better basis for development of their linking strategies and programmes.
To deploy the tasks mentioned above, a specialized management agency that
links the capital and the provinces should be provided possibly within the Steering
Committee for Deployment of Hanoi’s Regional Planning, whose members come
from the Planning 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.
22
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 level. The role of macro-level management
in those links have been clearly identified, but it has not met the requirements. The
shortcomings arisen in those agro-economic links mainly came from the weakness
of state management, so promotion of the state management role in development of
economic links has become urgent, with a focus on the following contents:
(1) Establishment of state management agencies that cover agro-economic links
between Hanoi and its neighbouring provinces; (2) Revision of the existing
plannings and arrangement of agriculturally specialized areas within the capital
region, with a focus on those that supply farm produce to Hanoi, as the basis for
Hanoi’s governmental support to its neighbouring provines; (3) Provision of plans
to deploy cooperative links in regional farm production to provide Hanoi with farm

produce with food safety from production to end-users and with clear origins of
production; (4) Development of mechanisms for agro-economic links between
Hanoi and its neighbouring provinces, under which Hanoi shall promote its role
and status in proactive organization of linking mechanism development; (5) Good
organization of development of legal documents that form a proper economic and
legal environment for those links; and, (6) Good coordination of supervision and
control of production and circulation of farm produce to guarantee disease
prevention for Hanoi’s agriculture, food safety and hygiene for consumers, and the
city’s beauty.
4.2.4. Promotion of cooperative links between producers, processors and
consumers of farm produce in Hanoi and the neigbouring 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 influences that arose from the limitations. Therefore, it is very
necessary to promote cooperative links between those parties mentioned above and
solve the following major problems:
- Cooperative links are possible between those investors and techsavvy people
from Hanoi and farm producers in its neighbouring provinces; between the
provinces’ producers and Hanoi’s processors; between the provinces’ farm produce
collectors and Hanoi’s sellers; between the provinces’ producers and processors
and Hanoi’s consumers; and, between the provinces’ producers and Hanoi’s
representatives of farm produce consumption groups (i.e. in form of colleagues in
the same office, a circle of friends, a neighbourhood’s residents, etc.).
23
- Methods of links: agro-economic links between the parties mentioned above
can be made either directly through joint-investment or indirectly through
commodity-money relationships in economic contracts.

- Link catalysts and implementers: Direct links are based on plannings, and
implementation of links are made through business links and joint-venture
foundation in such form as investment in joint-ventures, economic agreements or
contracts for advances of capital, supplies, technology and underwriting sale of
farm produce.
4.2.5. Revision and completion of policies for establishment of proper legal and
economic environment for development of agro-economic links
Policies are considered a tool of state management of agricultur. In fact,
policies on agro-economic links between Hanoi and its neighbouring provinces
remain available mainly when there are needs of coordination in control of
circulation upon a disease incident while policies for production and circulation of
safe farm products have just been paid attention to recently. Therefore, various
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 its
neighbouring provinces must concentrate on investment-supporting policies such as
in the fields of formulation of specialized farm areas in the neighbouring provinces
that supply farm produce to Hanoi’s market; application of science and technology
to improve farm produce quality; communication of science and technology, and
market information to farm producers and processors in the neighbouring
provinces, etc.
The feasibility of policies on market connection and supervision of farm
produce safety and hygiene throughout the stages from production to processing
and sale must be attentively improved. Agro-economic linking models for farm
production, processing, and sale between different provinces must be encouraged;
their lessons of experience summarized, dispersed, and multiplied through relevant

policies. There should be synchronous coordination between Hanoi and the
provinces, with proper attention paid to timeliness and synchronicity.
4.2.6. Re-establishment of order for cooperative links in the system of the
provinces’ farm produce sale in Hanoi
Approaching safe farm produce is a legitimate need of every citizen, especially
Hanoi’s people, because the highly alarming issue of unsafe farm produce has been
casting serious influences upon their health and must be dealt with immediately. As
a result, re-establishment of order for the farm produce sale system is considered a
24
solution for Hanoi, which must focus on the following issues: (1) Good
organisation and management of the vegetable supply chain based on close links
between farm produce produce, processing and sale; (2) Diversification of different
types of supply chains and expansion of their size; increase of the number of farm
produce suppliers and businesses in Hanoi’s market; increase of means of transport,
preservation houses, stores, and markets; tight control of food safety, quality, and
hygiene; and, guarantee of the rights of parties involved in the farm produce sector.
Safe farm produce must be registered and checked of their quality before going into
the market. (3) Improvement of market management activities. (4) Organisation
and management of the farm produce market through regulation supply and
demand, and market prices of farm produce; promotion of advertisement,
marketing, and expansion of markets for safe farm produce; (5) Promotion of
advertisement of safe farm produce through mass media; guiding farmers and
business people to make regular updates of information on production and
consumption of safe farm produce, which is provided by the Departments of
Agriculture and Rural Development of Hanoi and its neighbouring provinces;
regularly updating information on policies encouraging production of safe farm
produce in Hanoi’s and its neighbouring provinces’ websites; and, providing a
special website column for coordination in farm production, processing and
consumption between Hanoi and the provinces.
4.2.7. Development and promotion of the role of sector associations in agro-

economic links between Hanoi and its neighbouring provinces
Pet and Tea Associations from the provincial to grassroots level in Hanoi and
the neighbouring provinces have been established and running quite well while
other associations have not been really developed. As a result, the following actions
are necessary:
- To perfect the organization of the existing asssociations in the farm sector; to
establish branches of sector associations in the provinces and to plan exchanges
between the provinces, and especially between Hanoi and its neighbouring ones.
- To communicate and mobilise specialized farm producers and business
persons to join in their respective associations.
- To promote the associations’ role in the following basic issues: organization
of businesses’ study of information on price, market development orientations, a
country’s legal stipulations on anti-dumping, etc. so that they can make effective
appeals and reduce damages due to lack of information; to provide a trade
promotion mechanism that enables expansion of market, increase of types of
commodity, and provision of competitive advantages in the world market; to
promote the associations’ role in protection of their members’ rights and benefits,
working as both the intermediary and the organizer of cooperative links between
production stages, and between their members and other organisations and state
management agencies.
25
4.2.8. Capacity-building for producers and businesses to meet requirements of
agro-economic links between Hanoi and its neighbouring provinces
To build capacity for farm producers and businesses, the following major issues
must be focused on:
- Making big farms, large rice fields, and large-scale agricultural producers.
Attention should be paid to provision of a proper economic environment that
enables land transfer such as provision of more rural non-farming jobs to make
more land available for transfer. To encourage farm households with big capitals,
science and technology; to facilitate associations to make big farms… To

encourage farmers to shift to farm-economic models.
- Revision of business directions of farming institutions in specialized areas
under agro-economic links. On one hand, farm producers should be based on
development plannings of agriculture and forestry, especially Hanoi’s planning of
farm produce region to identify their degree of business direction shifting
relevantly. On the other hand, farming producers in the neighbouring provinces
should review the natural resources and their accessibility to capital; they must also
review their own production and business over the past years to make proper
decisions on shift directions.
- Application of scientific and technological advances by every involved party
to meet requirements of agro-economic links. Deployments are specified for each
sector, major plant or livestock. The application is conducted at two levels (1)
transfer from research institutes to businesses, and (2) communication from a
business to its members and workers.

CONCLUSION
Development of agro-economic links between Hanoi and its neighbouring
provinces is a need that stems from objective facts, of which social labour
distribution and farm produce value chains are direct ones. It is certainly
differentiated from regional agro-economic links because of Hanoi’s role and
characteristics in relation to its neighbouring provinces. The development pole
theory is useful here, so Hanoi’s proactive role in agricultural relationship with its
neighbouring provinces should be emphasized.
With the characteristic, development of agro-economic links between Hanoi
and its neighbouring provinces bear certain characteristics of regional economic
links and those of the capital region’s agro-economic links. In fact, it experiences
changes from direct administrative links to indirect ones through market-economy
relationships, due to the shift from a subsidized economy to a market one. The
relationships tend to increase in terms of scope, linking parties, and space, along
with the economy’s degree of transition and international economic integration.

Development of agro-economic links between Hanoi and its neighbouring
provinces has brought about positive influences on the economy, especially those
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of Hanoi and the cities and provinces in Hanoi’s region. Noticeably, it has enabled
the neighbouring provinces’ agriculture, with their advantage of geographical
adjacency, to enter Hanoi’s farm produce market, which has a high purchasing
power that can give them high economic effectiveness. In contrast, Hanoi’s
agriculture is supported in supply of farm produce to its huge population who are in
need of high quality farm produce while Hanoi has limited resources to satisfy such
needs.
However, both certain objective and subjective reasons 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 agro-
economic links between Hanoi and its neighbouring provinces will keep increasing.
Urbanisation, industrialization, and modernization will reduce the production
resources of Hanoi’s agriculture; international economic integration will create
tense competitiveness when foreign farm produce enter Hanoi’s market to remove
the neighbouring provinces’s advantage of geographical adjacency. As seen,
development of agro-economic links between Hanoi and its neighbouring provinces
face both new opportunities and challenges that require improved awareness of the
role, need, contents, and methods of agro-economic links by the government,
economic organisations, socio-political organisations, and Hanoi’s consumers.
Plannings should be reviewed to find out the provinces’ potentials and advantages
that lay the foundation for sector-based links. Hanoi’s initiative and the provinces’
active coordination must be promoted in organization of linking activities. Farm
produce sale must be first reorganized to ensure farm produce safety and hygiene.
The system of policies must be revised and perfected to promote establishment of
new cooperative links and to correct shortcomings in the existing ones. Those

activities mainly depend on agricultural managers of Hanoi and its neighbouring
provinces.
Besides, every farm producer, processor, and seller must modify their business
direction towards approaching Hanoi’s market. Noticeably, changing technology
and implementing solutions to have farm produce of high quality, safety and
hygiene are important solutions for agricultural businesses in Hanoi and its
neighbouring provinces.
In the current context, development of agro-economic links between Hanoi and
its neighbouring provinces is both a responsibility and an opportunity that requires
synchronous solutions to produce expected results.

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LIST OF SIENTIFIC PUBLICATIONS

1.
Hoàng Mạnh Hùng (2008), “Current Issues of Needs of Information and
Consultation of Farm Produce Market”, Business Finance Journal, Vol. 4, 2008,
pages 20 - 22.
2.
Hoàng Mạnh Hùng (2008), “The wood processing and export industry:
Growing but Showing Instabilities”, Business Finance Journal, Vol. 4, 2008, pages
26-27.
3.
Hoàng Mạnh Hùng (2011), “Investment in Development of Agricultural
Economy – Reality and Solution”, National Budget Journal, Vol. 113, 2011, pages
10-13.
4.
Hoàng Mạnh Hùng (2011), “Hanoi’s Agricultural Economy to be A Model”,

Seminar Summary Record: Scientific Research and Human Resource Training for
Resource Economy Discipline in Meeting Social Needs. National Economics
University, November 2011, Hanoi, pages 163 – 166.