Phát triển kinh tế hộ nông dân gắn với giảm nghèo bền vững ở tình Bắc Kạn (2)

VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES

NGUYEN VAN CONG

PROMOTING HOUSEHOLD ECONOMY IN
ASSOCIATION WITH SUSTAINABLE POVERTY
REDUCTION IN BACKAN PROVINCE
Major: Development Economics
Code Number: 62.31.01.05

SUMMARY OF DOCTORAL DISSERTATION

HANOI – 2017


Scientific instructors group:
1. Dr. Le Anh Vu
2. Dr. Phan Van Hung

Critic 1: Assoc.Prof.Dr. Nguyen Danh Son
Critic 2: Assoc.Prof.Dr. Le Xuan Dinh
Critic 3: Dr. Nguyen Thi Lan Anh

The Dissertation will be defended in front of the
Dissertation Grading Council of Academy Level, at
Graduate Academy of Social Sciences, 477 Nguyen Trai
street, Thanh Xuan, Hanoi ………………………….

This dissertation can be found available at:
- National Library

- Library of Graduate Academy of Social Sciences


LIST OF THE AUTHOR’S SCIENTIFIC WORKS IN
ASSOCIATION WITH THE DISSERTATION
1. Nguyen Van Cong (2016), “Promoting household economy in
association with sustainable poverty reduction in Backan Province”,
Journal of Human Geography Research, No 3(14) September – 2016,
p. 31-38.
2. Nguyen Van Cong (2016), “Measures to improve economic
efficiency of Backan tangerine”, Socio-economic Information and
Forecast Review (No 127, 2016, July), p. 30-39.
3. Nguyen Van Cong (2016), "Exploiting strengths human capital to
improve the livelihoods of farmers in poverty in Bac Kan," Journal of
Labor and Social Affairs (No. 529 May 6/2016), p.59 -61
4. Nguyen Van Cong (2016), "Stabilization of household income
towards sustainable poverty reduction in Bac Kan province", Journal
of Labor and Social Affairs (No. 528 May 6/2016), p.49-51
5. Nguyen Van Cong (2013), “Develop rural household business in
Vietnam” Economy and Forecast Review (No 16, 2013 August), p.
16-18


INTRODUCTION
1. Rationale
Nowadays peasant economy still remains a common economy in the
rural area of Vietnam. Innovation and global economic integration have
given peasant economy more opportunities to develop, increase in
income, and reduction in poverty. However, in the rural area especially
the mountainous areas, peasant economy is still facing various

difficulties and the number of poor families is still at peak.
Bac Kan is a poor mountainous province where most of the people
are ethnic minorities. Its economy is yet to develop. In the GDP rate,
forestry and agriculture are counted 35,95%, however, the industrial
section is only 15,33%. Eighty one percent of the people are living in the
rural area, with more than 83% of the labor working in the forestry and
agricultural section. The section of industry, trading, and service are
almost not developed. The peasant economy is very common, but the
development level is still low and the poverty rate, according to the
multidimensional standard, is quite high at 29,4%. Based on the fact
above, it is vital to develop peasant economy, which will bear a great
foundation for the socio-economic development and poverty reduction
of the province. Therefore, the topic “Promoting household economy
in association with sustainable poverty reduction in Bac Kan
Province” is selected to study.
2. Objectives of the study
- To clarify the theoretical background of the development of peasant
economy, actual experience, and lesson for Bac Kan Province.
- To clarify the actual state of development of the peasant economy
integrated with sustainable poverty reduction in Bac Kan Province.
- To propose solutions to develop the peasant economy integrated
with sustainable poverty reduction in Bac Kan Province in this new
situation nowadays.
3. Subject and scope of the study
- The subject and scope of the study is the development of the
peasant economy integrated with sustainable poverty reduction in Bac
Kan Province.

1

4. Methodology
Information collection methods
- Secondary document synthesis: Synthesizing the relevant studies
like released theoretical documents, books, magazines and policies,
reports, statistics, etc. of the state bodies and in Bac Kan Province.
- In-depth interview: This study gathers opinions of experts like
policy- makers, scientists in some of the state bodies in Bac Kan
Province through interviews and questionnaires. The interviews are
about the policies related to the development of the peasant economy.
- Collection of information on peasant economy: Investigating 400
households in Bac Kan through questionnaires.
During the data collection procedure, this study also uses group
discussion method in combination with reality observation.
Information analysis methods
- The investigated information will be put in the Excel software in a
computer to analyze and evaluate. This thesis uses both quantitative
method and qualitative method to explain different economic phenomena.
- Descriptive statistics: is used to describe the actual economic
development of the province, resources, poverty issues, and other
problems of the households in order to discover the positive/negative
factors during the development procedure and poverty reduction in Bac
Kan.
- Comparative analysis: using the information in time series to
compare between the criteria themselves to give comments on the study
subject; Statistic function like ratio, average, development speed, and so
on are used to analyze and compare in the thesis.
5. Novelty of the study
- The study has helped to systemize and clarify some theoretical
schools on development of the peasant economy.

- The study explains the development of the peasant economy
integrated with sustainable poverty reduction in the globally economic
integration nowadays.

2


- The study clarifies the role of peasant economy in poverty
reduction.
- The study gives objective and thorough evaluation of the actual
state of peasant economy and the poverty reduction of the households in
Bac Kan Province.
- The study proposed some feasible solutions to resolve the reseach
issue for Bac Kan in the future.
6. Theoretical and practical significance of the study
Although it is more like a case study, from the actual analysis in Bac
Kan Province, the study has orientated to a higher level of generalizing
the issue of peasant economy development integrated with sustainable
poverty reduction for all mountainous areas in Vietnam, which have
certain similarities in natural and economic-social conditions.
The issues and their solutions are based on the actual state of the
province, which shall give the leaders and managers of Bac Kan
Province scientific foundation in making the decisions on economic
development in general, and particularly the peasant economy
development in the coming years so that it will develop better ensuring
sustainable poverty reduction.
7. Design of the study
Other than the introduction, the study consists of four chapters:
Chapter 1: Overview.
Chapter 2: Theoretical background and practical experience in

developing peasant economy integrated with sustainable poverty
reduction.
Chapter 3: Reality of the development of peasant economy integrated
with sustainable poverty reduction in Bac Kan Province.
Chapter 4: Viewpoints and solutions on the development of peasant
economy integrated with sustainable poverty reduction.
.

3


CHAPTER 1: OVERVIEW
1.1. Review of international studies
By studying different studies of some authors and organizations in
the world in recent years, related to the topic economy and poverty
escape of peasants, this study comes to some conclusions:
- Form and function of peasant economy: a wide range from autarky
to commercial purposes.
- Difficulties of developing peasant economy and the poverty issue: it
is shown that most of the households lack resources, face natural
disasters and market risk, especially with the ethnic minorities in the
developing countries.
- Reality of poverty escape of the peasant: the decrease of poverty
rate is closely related to production diversity; joining market;
transferring to nonagricultural activities.
- Proposing policies to develop peasant economy orienting
sustainable poverty reduction: recommending land reform policies,
providing credits; subsidy, price support, tax reduction; investigating on
human through education, training, technical support; investigating on
infrastructure; reforming rural area social institution, etc.

1.2. Review of the studies in Vietnam
Debates on peasant economy under different approaches, research
methods, and research scopes are studied by many authors in national
level and regional level like: Vu Tuan Anh (1997, 2007); Tran Thi Que
(1996); Chu Tien Quang (2007); Le Xuan Dinh (2008); Bui Quang
Dung (2013); Nguyen Thi To Quyen (2012); Sa Trong Doan (1999);
Social and Human Center (1993); Social Science Institution of Vietnam
(2011); Committee for Ethnic Affairs, and so on. These studies have
clarified the huge aspect of peasant economy in Vietnam theoretically
and practically, for instance:
- Confirming that peasant economy in Vietnam is the basic economic
unit, which has an important role in each and every development step.

4


- Evaluating current difficulties and challenges of peasant economy
in Vietnam: it is capital, low accumulated property, low production
performance, poor adaptation to the market and especially discrete
agricultural land which is lessened day by day.
- Development trend of peasant economy in Vietnam: many authors
are convinced that developing peasant economy should be oriented to
commodity production, agricultural land gathering, development of farm
economy.
- Poverty and poverty reduction of peasant: A lot of authors argue
that in Vietnam “most of the poor are living in the rural area.” After
innovation, the development of peasant economy has helped to alleviate
poverty dramatically. Nowadays, various new forms of poverty are
created by the market, unemployment, and having no land.
1.3. Gaps for further studies

The development of peasant economy in the current context with
new poverty episodes that have not been thoroughly studied like the
issue of economic globalization, climate change, economic crises,
political crises, etc. Moreover, it is the theory between developments
of peasant economy integrated with sustainable poverty reduction
that has not been studied and explained thoroughly, especially study
in a province that has high rate of poverty with most of people being
ethnic minorities like Bac Kan.
CHAPTER 2: THEORETICAL BACKGROUND AND
PRACTICAL EXPERIENCE IN DEVELOPING PEASANT
ECONOMY INTEGRATED WITH SUSTAINABLE POVERTY
REDUCTION
2.1. Theoretical background of peasant economy
2.1.1. Fundamental concepts of peasant economy
The development of peasant economy integrated with sustainable
poverty reduction can be generalized in the following contents:
Increasing income, increasing life standard of peasant; The peasants

5


should be able to exploit the resources wisely and effectively; peasant
economy must change towards advance, developing through linking and
joining the market and product value chain ; management capacity of the
householder and workers in the household, and ability to adapt to the
crises from the outside.
2.1.2. Function of peasant economy to the social-economic
development
Creating and supplying main products for human and society; for the
processing industry; contributing to the development of commodity

production; motivating sustainable agricultural and rural development.
2.1.3. Factors influential on the development of peasant economy
It includes natural condition factors; internal factors of the
household; economic development conditions in the province and area;
policies of the state, etc.
2.1.4. Theories on peasant economy
2.1.4.1. Classic theories on movement and development of peasant
economy
Nowadays, there are three outstanding schools about peasant
economy:
- The first supposes that small peasant economy will be eliminated
during the development of capitalism and market economy.
- The second supports the everlasting existence of the peasant
economy.
- The last argues that the existence of peasant economy lay on the
hand of farmers themselves.
2.1.4.2. Contemporary theories on the development of peasant
economy
- Theory of peasant’s means of livelihood . It considers the
development of peasant economy in five groups of resources.
- Theory of production cooperation: It supposes that the development
of peasant economy must be based on cross connection.
- Theory of value chains of agricultural products : It states that
development of peasant economy must be based on the product value chain.

6


- Theory of “Tam Nong” or “Agriculture, peasants and rural areas”
It states that development of peasant economy must be put on the whole

development of agriculture and rural areas.
2.2. Theory background of poverty reduction
2.2.1. Concepts of poverty and poverty reduction
Nowadays definition and comprehension of poverty have been
extended towards approaching multidimensional poverty, meaning to
say to consider life standards of the people in a more thorough way.
Recently, the term “sustainable poverty reduction” is also frequently
used. Sustainable poverty reduction can be understood as the job
creation for the poor to escape poverty, to be able to deal with negative
effects from nature and society, ensuring that they will not be poor
again; at the same time the poor can use medical service, educational
service, and social welfare system. Development of peasant economy
integrated with sustainable poverty reduction means that sustainable
poverty reduction of the households must be based on the sustainable
development of peasant economy and poverty reduction.
2.2.2. Theory of development of peasant economy integrated with
sustainable poverty reduction
2.2.2.1. The necessity of developing peasant economy integrated with
sustainable poverty reduction
Nowadays, in poor and developing countries, the peasant economy
concentrates mostly in rural areas. Therefore, poverty is the problem of
farmers. Peasants are both the subject of the policy and the ones who
gain benefits from the outcome of policies to develop economy and
reduce poverty.
2.2.2.2. Theory of relation between peasant economy integrated with
sustainable poverty reduction
Poverty takes household to be the fundamental base. In national
scale, poverty reduction is gradual change from underdeveloped
economy to contemporary, from agricultural production to
nonagricultural production. Under the angle of the poor, poverty

reduction is the process to help poor families to get resources, getting
education, profession, management capacity, etc.

7


Development of peasant economy integrated with sustainable poverty
reduction is to enhance capacity of peasant in effective use of resources,
increasing economic strength of the household. Development of peasant
economy should lead to the dramatical decrease of poverty, giving the
poor families opportunities to get assistance and join the process of
economic development.
2.2.2.3. Conditions and premises to ensure the development of
peasant economy in the sustainable poverty reduction
Peasant economy’s strength has its own limitation; in order to
increase strength, the household must utilize its potential and lean on
enterprises, industry, and services towards the state assistance and policy
guidance. Thus, promoting household economy associated with
sustainable poverty reduction is to increase the capacity of farming
families in the use of resources in production and effective business in
order to raise productivity, solve employment problem, increase incomes
and households’ economic strength.
2.2.2.4. Necessity of the development of peasant economy integrated
with sustainable poverty reduction in Bac Kan
Bac K n has a lot of ethnic minorities with high poverty rate and
poor development of peasant economy. The base for peasant economy to
develop is land and labor. Many hunger elimination and poverty
reduction programs have not resolved the problem, which is to utilize the
potential of household to grow leaning on enterprises, the connection,
cooperation, development following farm economy, approaching the

market, joining the product value chain.
2.3. International and domestic experience of the development of
peasant economy integrated with poverty reduction
2.3.1. International experience
2.3.1.1. Experience of Thailand: Diversifying and focusing on
applying technical advancements to production for peasant; increasing
cooperation, joint venture, and connection for households; completing
and improving public service quality for agriculture.

8


2.3.1.2. Experience of Taiwan: Motivating peasants to make product
towards goods on the base of reallocation of land; diversifying
production, industrializing rural areas step by step, developing
nonagricultural production; focusing on technical infrastructure and
social infrastructure.
2.3.2. Domestic experience
2.3.2.1. Experience of Lao Cai Province: Disbursement of the right
investment resources; Creating the competition peasants good at
production and doing business.
2.3.2.2. Experience of Tuyen Quang Province: "Giving fishing rod"
to the poor; The Program “Lending cow and paying calf”.
2.3.2.3. Experience of Cao Bang Province: Developing highly
valuable production models, suitable with the local conditions following
the trend of value chain. A typical model is that of producing Mong
ethnic beef at Cao Bang, which creates a close relation of “five groups”
(peasants, enterprises, state, scientists, and sponsors).
2.3.3. Several lessons learned
First: we need correct and objective understanding about agriculture,

rural areas, and peasants in the development procedure.
Second: we need to develop production capacity of peasant economy,
promote the activeness and self-control of the peasants, combine
development of agriculture and industry appropriately, and develop
peasant economy and reduce poverty at the same time.
Third: The state needs extraordinary leaps of market and raise
competitive capacity of agricultural products, complete policy to
transfer goods, invest on the agricultural section appropriately, and
create more jobs.
CHAPTER 3
REALITY OF THE DEVELOPMENT OF PEASANT ECONOMY
INTEGRATED WITH SUSTAINABLE POVERTY REDUCTION
IN BAC KAN PROVINCE

9


3.1. Socio-economic and natural conditions affecting the
development of the peasant economy in Bac Kan Province
3.2. Features of peasant economy in Bac Kan Province
3.2.1. Quantity and structure of the peasants in Bac Kan Province
In recent years, the structure of peasant group in Bac Kan has
decreased and the group of industry-civil has increased. However, this
transformation is quite slow, so the peasant group still makes up a large
number.
3.2.2. Scale and land allocation of peasants
The average of the agricultural land area per household is 0,558
hectare, and forestry land is 2,497 hectare/household. Generally, land
use in Bac Kan is small and separated and the traditional cultivation
method is no longer suitable with the new development requirements of

the agricultural section of mass production nowadays.
3.2.3. Labor of the peasants
In Bac Kan, most of the labor is working the agricultural section,
which accounts for 83% of the total labor in the entire province. The
current average of labor per household is 2,46 people. The trained labor
of the province is quite limited (30%). This is also the reason of low
work performance. In 2015, average per capita income a moth was 1,8
million Vietnamese Dong, about half of that of the whole country.
3.2.4. Budget of peasants for production and training
Budget collection of the peasant is low. The loan/ household is also
low and the loan procedure is complicated. Usage of budget is not very
effective. The demand for loan is high.
3.3. Reality of peasant economy in Bac Kan
3.3.1. Reality of peasant production
Rice and corn are still the main crops, which has the highest
cultivation land in total cultivation area.
Breeding has yet to develop to a large-scaled commodity and it
mostly meets self-provision demands.

10


3.3.2. Reality of technical and scientific implementation
Using machines and tools in production of the peasants in Bac Kan is
quite limited. Mechanization is limited. Machines are mostly used for
irritating and killing insecticide. Machines for harvesting and storing are
rarely equipped.
3.3.3. Reality of commodity production of peasants
Commercial level of peasants in Bac Kan is increasing. However, the
ratio and product value are still very low. The distribution channel sells

products for merchants (66%); the rest are retails. The market is mostly
within the province.
3.3.4. Connection cooperation and consumption of peasant
products
In general the connection is very limited. The reason is the
undeveloped processing industry, limitation in forms of cooperation and
enterprises, so it does not play the role of leading factor to connect and
guild peasants in product value chain. Bac Kan has never had any
product in the international value chain.
3.4. Analysis of the business result of the peasants in Bac Kan
3.4.1. Cost for production and trading
Nonagricultural
investment
28,49%

Annual plant
investment
33,29%

Breeding
investment
17,86%

Forestry
investment
1,53%

Fishing
investment
1,98%

Annual plant investment
Forestry investment
Breeding investment

Perennial
investment
16,85%

Perennial investment
Fishing investment
Nonagricultural investment

(Source: the author’s investigation in 2016)
Figure 3.10 Production investment of peasants in Bac Kan Province
11


Average investment on production of peasants in Bac Kan is 33,62
million VND per year. Where, investment on annual plants is 33,29%
(11,19 million VND); that of perennial is 16,85% (5,66 million VND);
that of forestry is 1,53% (0,513 million VND); that of fishing is 1,98%
(0,664 million VND); that of breeding is 17,86% (6 million VND), and
cost for nonagricultural activity is 28,49% (9,57 million VND).
* Average production costs per hectare of the peasants

(Source: the author’s investigation in 2016)
Figure 3.11. Average production cost/ 1 hectare of peasants
Costs per one hectare is still low: the average is 33,08 million
VND/ hectare/ year cultivation land (annual plants + perennial).

Where annual plants count for 27,59 million VND; perennial counts
for 54,5 million VND; Investments on agricultural land are very
limited.
According to groups of households, we see that the average land
of the poor households and near poor households are less than that of
the non-poor households, but the production cost per hectare is lower
than that of the non-poor households.

12


Table 3.4. Costs/ hectare of land of the households in Bac Kan
Province
Unit: 1.000 VND
No.

Item

Total

Annual
Perennial Forestry Fishing
plant

Average/
33.088,39 27.599,68 54.503,25 198,54 23.229,59
household
Poor
1 households 23.417,99 19.709,58 38.882,73 155,64 20.233,97
Near poor

2 households 24.014,67 19.499,60 40.749,31 208,25 23.102,43
Non-poor
3 households 37.130,72 32.060,57 56.732,46 311,53 23.910,64
(Source: the author’s investigation in 2016)
3.4.2. Income and sources of income of the peasants in Bac Kan
Province

Annual plant
net income
9,07%

Perennial net
income
6,29%

Other income
20,31%

Forestry net
income
2,16%
Fishing net
income
2,12%

Income from
salary, wage
27,97%

Non agricutural

net income
19,93%

Breeding net
income
12,16%

(Source: the author’s investigation in 2016)
Figure 3.12. Structure of average net income of the peasants

13


Income of peasants in Bac Kan Province come from different
sources. The income from salary, wage and other sources increase
every year. In the group of poor households and near poor
households, their main income comes from the state support and
work. For the non-poor households, their income comes from the
money that their family members send home after working in the city
The average net income of 93,83 million dong / household / year.
In which the structure of income from agriculture, forestry, fisheries
and livestock production accounted for 31,79% and that of salary and
wage is 27,97%. Income from nonagricultural sections is 19,93%.
Other income is quite high, counting for 20,31%,
Considering different groups of households, we see that the poor
households have an average income of 42,77 million VND/
household/ year, equivalent to 635 thousand VND/ person/ month,
three times lower that the average income of the province. The nonpoor households have an average income of 109,9 million
VND/household/year, equivalent to 2,51 million VND/ person/
month, 1,32 times greater than the average income of the province.

Table 3.5. Total average net income/ household in Bac Kan
Unit: 1000 VND
Total
NonOther
No. Criteria
Agriculture
Salary
income
agriculture
income
Average 93.834,22
29.834
18.701,25 26.241,25 19.057,34
Poor
1
14.162
6.242,39 9.461,87 12.911,00
households 42.777,66
Near poor
2
17.425
7.755,10 11.510,20 9.709,05
households 46.399,69
Non-poor
3
21.802,20 31.965,45 23.009,20
households 109.942,23 33.165
(Resources: the author’s investigation in 2016)
* Net income/ hectare of cultivation land of peasants in Bac Kan

14


Income/1 hectare of land is still low. The extensive farming is quite
common. The coefficient of land use is only 1,53 times. Average net
income is 28,29 million VND/hectare/year, where annual plant land is
almost 21 million VND/hectare, perennial land is 56,74 million
VND/hectare, income of forestry land is lowest, 0,78 million
VND/hectare.
80.000

69.610,07

Thousand VND

70.000

56.747,36

60.000
50.000
40.000
30.000

20.996,60

20.000

781,59

10.000
Annual plant

Perennial

Forestry

Fishing

(Source: the author’s investigation in 2016)
Figure 3.14. Average net income/ 1 hectare of land of peasants
3.5. Development of peasant economy integrated with poverty
reduction in Bac Kan
3.5.1. Reality of poverty and poverty reduction in Bac Kan Province
The poverty rate of Bac Kan is 29,4%, (multidimensional standard),
two times higher than 2014 and 2,5 times of the former poverty standard.
Many districts have high rate of poverty like Na Ri 40,89%, Ngan Son
50,96%. This shows that social welfare service is low. Bac Kan has 12%
of the households are near poor. These have a high risk of being poor
again.
By investigation, it shows that 95,65% of the poor households are
ethnic minority. Where Mong people is 32,61%, Dao people is 27,17%
and Nung people is 18,48%; economic structure of these households

15


transfer really slow and at low level. The average rate of being poor
again in 2015 was 17,39%, highest was Mong people: 23%.
Table 3.6. Poor household rate of Bac Kan in the years 2010 -2015

Unit: %
No.

Year
Whole
province

2010 2011 2012 2013 2014 2015 2015*M
32,1

23,5 20,4

11,24

29,4

1 Cho on Dist.

25,94 15,7 14,5 14,31 13,73 10,14

20,59

2 Pac Nam Dist.

53,8 45,44 40,47 35,36 28,7

23,82

50,84

3 Ba Be Dist.

43,65 29,63 26,56 22,1 18,04 14,52

34,04

4 Ngan son Dist.

40,21

20,5

50,96

5 Na Ri Dist.

46,02 34,3 28,42 26,55 17,98 13,49

40,89

Bach Thong
6 Dist.

18,59 12,74 10,46 9,58

6,58

26,31

7 Cho Moi Dist.

31,6 24,66 20,56 20,43 16,12 12,33

25,38

32

18,6

14,8

28,17 25,01 20,51

7,21

8 Bac Kan City
6,54 4,6 4,06 3,36 2,44 1,85
3,2
Source: Bac Kan Department of Labour, War Invalids and Social Affairs
(2015*M is the poverty rate according to multidimensional standard in
the period of 2015-2020)
Poor households in Bac Kan lack of production sources, where the
highest lack is cultivation land 29,72%; lack of production capita counts
for 24,1%; lack of production facilities is 12,78%.
Poverty rate in Bac Kan is high, meaning that there is a need to
change the socio-economic development policy in the coming years
towards the trend of putting human to the center, integrated with
sustainable poverty reduction.
3.5.2. Function of peasant economy to sustainable poverty
reduction in Bac Kan Province

3.5.2.1. Creating stable jobs, improving income of peasants and poor
households

16


In the situation of the low economy of Bac Kan Province
undeveloped industry and service, lack of capital sources, development
of peasant economy will create jobs for people, helping to reduce
poverty and stabilize society.
3.5.2.2. Changing production scale, promoting the capacity to reduce
poverty of poor households
In order to reduce poverty, we need to raise income of the
households, especially the poor. Poor households often lack and find it
difficult to get development sources. Therefore, raising income of the
peasants should ensure the quantity and quality of the input to expand
production scale and therefore enhance the capacity to reduce poverty.
3.5.2.3. Diversification of income to help peasants to reduce poverty
The fact is that peasant economy, especially the poor households in
Bac Kan, does not diverse in income, basing mostly on agriculture,
making peasant economy unstable and not everlasting. Therefore,
diversification of income from agriculture to non-agriculture,
transferring to plant and breeding will help to develop sustainable
economy, therefore reducing poverty.
3.5.2.4. Implementation of policy to develop peasant economy and
promote sustainable poverty reduction
It is very important to release and implement policy suitable with
each period. The policies must reduce risks for the households,
especially the poor ones.
3.5.2.5. Applying science-technology in production to develop

economy and reduce poverty
The advancements in agriculture are considered to be successful if
they are welcomed and done by the peasants. However, the
advancements are often associated with strict procedure which requires
capital and skillful labor. Therefore, the state needs to support them in
order to put these advancements into production, helping to develop
peasant economy, thereby raising income and production capacity, and
reducing poverty.

17


3.5.3. Issues during the development of peasant economy integrated
with sustainable poverty reduction in Bac Kan
3.5.3.1. The poverty rate is still high; sustainability of poverty
reduction work is low; it is hard for peasant economy to join production
in product chain
3.5.3.2. Development model of the province tends to develop
agriculture but it lacks necessary support for peasant economy to
develop in huge product orientation.
3.6. Common evaluation of reality of development of peasant
economy integrated with poverty reduction in Bac Kan Province
3.6.1 Achievements
In general, peasant economy in Bac Kan has developed; there are
households who have income of hundreds of million VND per year.
Peasants tend to choose the business and production following the policy
of the province. Some peasants have initially expand to some
nonagricultural jobs to raise their income, which help to reduce poverty
every year.
3.6.2. Drawbacks

- Small peasant economy is still very common in Bac Kan. Small
production with characteristic of self-provision and depending on nature.
- Peasant economy in Bac Kan is limited in land scale, capital,
technology, management capacity, information about market; technical
level and old-fashioned technology, limitation in applying science.
- Farm economy is yet to develop. Connection forms are not
common. It is hard for the peasants to join the value chain.
- Average income per capita in a month is 1,8 million VND (equal to
half of the average income of Vietnam).
- Poverty reduction rate is low and unstable and the risk of being
poor again is high.

18


3.6.3. Causes of those drawbacks
3.6.3.1. Objective causes
The households have little and separated flat land; mountainous land
is easily washed.
Most of the people in Bac Kan are ethnic minorities with limited
education and understanding.
There are few natural resources, therefore it is hard to develop
industry to transform labor.
The number of valuable forests is low and most of them are not old
enough to be exploited. Therefore, income from forestry is so limited for
the peasants.
The main resources depend mostly on the state support and the
potential and social resources are low.
3.6.3.2. Subjective causes
First: Model of economic development does not focus on industry to

transform economic structure and labor.
Second: Infrastructure like roads, market has various weaknesses.
Third: Bac Kan lacks enterprises like the leading factors to connect
and guild the peasants to develop their product in chain. Social
organizations and co-operatives are small.
Fourth: There are various issues in the state management system; the
Departments, Divisions only focus on production but they do not help
peasants to connect production with market. Policies to support peasants
are not for a long term.
Fifth: Financial system is yet to develop. It does not provide enough
capital on time for peasants who are in need.
Sixth: Labor education is low and there is no high-tech agricultural
model to raise their income. Some poor peasants have no passion to be
rich and just wait for support from the state.

19


CHAPTER 4
VIEWPOINTS AND SOLUTIONS ON THE DEVELOPMENT OF
PEASANT ECONOMY INTEGRATED WITH SUSTAINABLE
POVERTY REDUCTION IN BAC KAN PROVINCE
4.1. International and domestic context influential on the
development of peasant economy and poverty reduction
4.2. Viewpoints on the development of peasant economy integrated
with sustainable poverty reduction in Bac Kan Province
First: Development of peasant economy integrated with sustainable
poverty reduction must consider human to be the center.
Second: Development of peasant economy integrated with
improvement of industrialization and modernization, enhancing globally

economic integration, economic transformation, diversification of jobs,
giving people opportunities to raise their income.
Third: Development of peasant economy integrated with poverty
reduction in Bac Kan needs the combination between the state support
and promoting inner power, creating a new development step in peasant
economy.
Fourth: Development of peasant economy towards goods production,
exploiting all the advantages of the province, orientating the farm
economy and sustainable environment protection.
Fifth: Development of peasant economy must be based on the
cooperation in agriculture.
4.3. Some solutions on peasant economy integrated with sustainable
poetry reduction in Bac Kan Province
4.3.1. Solutions on policy aspect
4.3.1.1 Planning produce production integrated with market and
comparative advantages
Bac Kan needs to have outstanding leap, based on the advantages of
development of unique agricultural products with high quality under the
form of “fresh” products so that the products can get into the domestic
market and gradually approach the global market.

20


4.3.1.2. Focusing on development of economic infrastructure,
especially in rural areas
Promoting more such programs as government and citizens do it
together and combine effective the capital of different projects.
Especially we should work on the combination of programs to develop
innovative rural areas, where infrastructure for production is priotized.

4.3.1.3. Solutions on policies to develop processing industry and
transfer technical advancements to peasants
For processing industry to develop, the province needs policies to
promote and attract investors inside and outside the province to this
section through priority in using site, exploiting resources, reducing tax,
and lowering credit interest.
Together with the development of processing industry, Bac Kan
needs to focus on transfer technical advancements to peasants. We need
to implement the technical and scientific advancements into production,
especially breed; Focusing on implementation of innovative production
procedure; transfer technology to peasants should go with renewing
methods and improving capacity of agricultural motivation system. We
need to provide peasant with enough technical and scientific services at
the right time.
4.3.1.4. Solutions on policies to promote connection and cooperation
for peasants
Nowadays, for peasant economy to integrate with sustainable poverty
reduction, peasants cannot work alone but they must join the value
chain. Peasant economy must connect with enterprises. Therefore, we
need to combine it with processing industry, creating opportunities for
enterprises and cooperative organization to develop. Promoting
agricultural activities. Innovating cooperatives.
4.3.1.5. Solutions on promoting farm economy, developing forestry
economic potentials for peasants
Together with other solutions like developing jobs, creating
livelihood for peasants, applying technical and scientific advancements

21

into production, and so on to transform labor, transform income of
certain groups of peasants from agriculture to industry. We need to
immediately generate an appropriate environment and promote the
process of gathering land to form farm economy.
Bac Kan has a lot of forests but it takes a long time to grow plants
and there are so many difficulties of production conditions. Therefore,
in order to utilize forestry advantages to develop peasant economy
integrated with sustainable poverty reduction, the state and
enterprises need to give strong support. Rather than supplying
breeding plants for forestation, forestation managements needs
policies to guild peasants to combine with production models under
forestation like combining raising plants with breeding; planting short
term plants to increase income. Choosing forestry plants needs to be
done thoroughly and suitable with the wood processing industry. In
addition, we need to focus on developing roads to transport forestry
products.
4.3.2. Solutions on enhancing sources for peasants
4.3.2.1. Raising profession and capacity for householders and
workers
The province needs to continue policy of training peasants in the
project “training rural labor until 2020”. We need to divide different
forms of peasant economy to have suitable training plan. For poor
household, we need to focus on basic things like raising business
management capacity; equipping technical knowledge, etc. The training
forms must be particularized for each of the districts to exploit regional
advantages.
Continuing to study and spreading models of peasants who are good
at doing business in different areas to expand the model. Propagating
more to raise
awareness on becoming richer and escaping

poverty and eliminating dependent thinking; Putting multidimensional
poverty reduction in the center to carry out social welfare.
4.3.2.2. Supporting peasants with capital

22