Area, Yield, and Output of Rice in Vietnam in the Period 2017-2019

- Production value over intermediate cost (GO/IC): This indicator shows how much production value is generated for every dong of intermediate cost invested in the rice production process. The higher this ratio is, the more efficient the production is.

- Value added over intermediate costs (VA/IC): According to this indicator, for every dong of intermediate costs invested in the rice production process, how much value added is created? The larger this ratio, the higher the efficiency of rice production.

-Mixed income to total cost (MI/TC): Reflects every dollar of cost generated

how much mixed income

- Value added per production value (VA/GO): this indicator shows how much value added will be obtained for spending one dong of production value.

1.2. Practical basis

1.2.1 World rice production situation

In the world, rice occupies an important position, especially in Asia. In Asia, rice is a staple food like corn for South Americans, millet for Africans or wheat for Europeans and North Americans. Statistics from the Food and Agriculture Organization of the United Nations (FAO, 2015) show that there are 114 countries growing rice, of which 18 countries have a rice growing area of ​​over 1 million hectares concentrated in Asia, including India, China, Thailand, Vietnam, Myanmar... 31 countries have a rice growing area of ​​about 100,000 hectares - 1,000,000 hectares. Of which, 27 countries have a yield of over 5 tons/ha, led by Egypt (9.7 tons/ha), Australia (9.5 tons/ha) El Salvador (7.9 tons/ha).

The rice growing area in Asia leads the world, but rice productivity is not high. Since 1990, the world rice productivity has continuously increased and reached an average of 4.38 tons/ha in 2010. Although the rice productivity of Asian countries is still low, due to the large production area, Asia is still the main and important rice contributing region in the world.

Statistics from the Food and Agriculture Organization of the United Nations (FAO, 2008) also show that the rice growing area in the world increased significantly from 1961 to 1980. During those 19 years, the area

The world's rice growing area increased by an average of 1.53 million hectares per year. Since 1980, the rice growing area has increased slowly and reached its peak in 1999 (156.8 million hectares) with a slow growth rate with an average growth rate of 630,000 hectares per year. Since 2000, the world's rice growing area has fluctuated and tended to decrease, reaching 155.1 million hectares in 2005. From 2005 to 2008, the rice growing area increased continuously, reaching 159.0 million hectares, the highest since 1995.

In India, a top 4 rice producer in the world, the second official estimate for India’s rice production, released in mid-February 2017, showed that the country’s 2016 main crop output rose by 5% to 144 million tonnes of paddy, equivalent to 96 million tonnes of milled rice, 3.2 million tonnes higher than the previous official forecast, mainly due to a favourable monsoon. According to Indian authorities, the very positive production results of the main crop helped to limit the negative impact of a 1.2% decline in the second crop. The main reason was limited water supply in the southern states, which negatively affected even irrigated production areas for the third consecutive year. Accordingly, in general, India forecasts total rice production in 2016 at 163.3 million tons, equivalent to 108.9 million tons of rice, up 4% compared to 2015 and 1.8 million tons higher than FAO's forecast in December 2016. FAO also forecasts the country's rice production at 165.3 million tons, equivalent to 110.2 million tons of rice in 2017, 1.2% higher than the 2016 output. However, it is still too early to make a forecast for the upcoming production season due to the main factor being the rainy season in the southwest region of the country.

Thailand, with its long history of rice production and almost uninterrupted rice exports for nearly two centuries, is no coincidence that Thailand has long been the world's leading rice exporter. Thai authorities said that abundant water supplies for irrigation in the second crop of the 2016/17 crop year since early April have brought the irrigated area to 1.2 million hectares, with only 510,000 hectares planned for the second crop and up 560,000 hectares from the same period last year, when production was severely affected by water shortages. This rapid improvement is

thanks to the Thai government’s policy measures to encourage farmers to switch to other crops, and the authorities’ advice to farmers to refrain from planting the third rice crop, which usually begins after the harvest of the rice planted in April is about to end. Taking into account this improvement in Thailand’s rice production infrastructure, FAO has raised its forecast for Thai rice production by 1.5 million tonnes to 32.6 million tonnes, or 21.6 million tonnes of paddy, or 14 percent higher than the 2015 output. This increase reflects increased production in both the main and second crops, as favorable growing conditions persist. Regarding the production outlook for 2017, FAO forecasts that rice production in Thailand will increase

700,000 tons compared to 2016 to 33.3 million tons, equivalent to 22 million tons of rice. FAO forecasts that Thai rice production will increase because farmers in this country continue to choose to grow rice instead of other crops, although the government has lowered the rice production target from 27 million tons to 25-26 million tons in 2016. Rice prices in Thailand are under great pressure due to the recovery of production, although the government has implemented a rice mortgage program on the spot for 3 million tons of rice and created incentives for commercial intermediaries to stockpile rice from the main harvest. By February 2017, farm gate rice prices had decreased by 6

– 14% compared to the same period in 2016, at 7,400 – 10,900 baht/kg, equivalent to 214 – 317 USD/ton. The sharp drop in rice prices also put pressure on the prices of alternative grains. In this case, corn, as the Thai government has repeatedly urged farmers to switch from rice to corn.

1.2.2 Rice production situation in Vietnam

As for Vietnam, it is always in the top 3 largest rice exporting countries in the world. Starting out as an agricultural country, rice is the main and long-standing crop, rice is distributed throughout the country from North to South, it is one of the countries with favorable climate conditions for the development of rice. More than 70% of the Vietnamese population lives on rice cultivation, our people are very hard-working, creative and experienced in rice cultivation, inheriting the experiences of their ancestors and drawing many successes in care and planting. According to the latest official estimates,

Vietnam's rice output in 2019 reached 43.45 million tonnes, equivalent to 28.3 million tonnes of milled rice, down 1.4% from 2018. This was due to water shortages, severe salinity and storms that reduced average yields. Vietnamese farmers are currently in the peak season of the winter-spring main crop. By mid-March 2020, production of the first and largest of the three crops was reported to have recovered compared to last year's production, reaching a planted area of ​​3.04 million hectares. In the Mekong Delta, which accounts for half of the winter-spring crop's production, salinity is still a problem and late rains are expected to reduce yields. In 2019, insufficient water for irrigation systems and salinity reduced the average yield of the main crop in the Mekong Delta by 10% to 6.4 tonnes/ha. Early harvest results suggest that yields may fall even lower this year. Production in the Red River Delta has been better thanks to good weather. The Mekong Delta is now preparing to sow the summer-autumn crop. However, the fall in output from the delayed first crop may keep rice prices high.

Table 1.1: Area, yield and output of rice in our country in the period 2017-2019

Target

Unit	2017	2018	2019	2018/2017		2019/2018
				+/-	(%)	+/-	(%)
Acreage	Thousand hectares	7705.2	7570.4	7470.1	-134.8	-1.74	-100.3	-1.32
Productivity	tons/ha	55.5	58.1	58.2	+2.6	+4.68	+0.1	+0.11
Output	Thousand tons	42738.9	44046.5	43450	+1306.6	+3.05	-596.5	-1.35

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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• Current Status of Cultivation and Some Major Obstacles in Corn Production on Rice Land in the Mekong Delta
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(Source: Statistical Yearbook 2019) According to actual data, the rice production area of ​​our country has decreased over the past 3 years. From 7,705.2 thousand hectares (2017) to 7,470.1 thousand hectares (2019), a decrease of 235.1 thousand hectares compared to 2017, a decrease of 100.3 thousand hectares compared to 2018, corresponding to a decrease of 1.32

%. However, the yield increased from 55.5 quintals/ha (2017) to 58.1 quintals/ha (2018). By 2019, the rice yield stagnated, increasing only from 58.1 quintals/ha (2018) to only 58.2 quintals/ha (2019), an increase of 0.1 quintals/ha, equivalent to an increase of 0.01%. The rice yield increased and decreased over the past 3 years, unstable while the area decreased gradually each year. The yield of the year

2018 reached 44,046.5 thousand tons, an increase of 1,306.6 thousand tons compared to 2017, which was 42,738.9 thousand tons. In 2019, it reached 43,450 thousand tons but decreased by 596.5 thousand tons compared to 2018, a decrease of 1.35%.

It can be seen that the reason for the decrease in cultivated area is because of the government's involvement in promoting the structure of the proportion of service and industrial sectors in the general structure and reducing the structure of the proportion of the agricultural sector, causing agricultural land to be reclaimed and converted into industrial production land, serving the high-tech service industries that are increasingly penetrating, causing the Vietnamese economy to develop rapidly today. In general, the Vietnamese agricultural production sector has achieved such results thanks to the implementation of policies and guidelines of the Party and the State, the application of scientific and technological advances, especially the science of rice genetics, which plays a very important role. Rice varieties are regularly selected, bred, preserved, supplemented and replaced to preserve valuable varieties with high yield, good quality and suitable for different natural conditions by different rice varieties, eliminating poor quality varieties with low economic efficiency, at the same time accumulating and regenerating, developing varieties with high yield, good quality, and resistant to each adverse environmental condition. On that basis, it is forecasted that Vietnam has the potential to export up to 4.5 million tons of rice in 2020.

1.2.3 Rice production situation in Thua Thien Hue province

Thua Thien Hue is a province located in the Central Coast. Although it has suffered many floods and droughts, agricultural production in the province has not decreased. Agricultural production is still focused on even though it is undergoing the process of industrialization and modernization along with the country.

In general, in the past 3 years, the rice production situation of Thua Thien Hue province has changed a lot.

Table 1.2: Rice production situation in Thua Thien Hue province in the period 2017 - 2019

2019/2017

2017	2018	2019	+/-	%
Area (thousand hectares)	54.9	54.7	54.8	-0.1	99.8
Yield (tons/ha)	59.6	61.1	59.6	0	100
Output (thousand tons)	327.4	334.4	326.4	-1	99.7

Target

(Source: General Statistics Office)

Through table 1.2, we can see that rice productivity in Thua Thien Hue is quite high. The peak was in 2018, the productivity reached 61.1 quintals/ha, an increase of 1.5 quintals/ha, an increase of 2.5% compared to 2018, the annual output reached 334.4 thousand tons, an increase of 2.1% compared to 2018.

Thua Thien Hue province aims to stabilize the rice cultivation area by 2025 at about 51,000 - 52,000 hectares/year, with an average rice yield of over 6 tons/ha, high-quality rice area reaching 17,000 hectares, the rate of using certified rice varieties reaching over 98% of the cultivated area, and the area of ​​large-scale rice fields linked in consumption of about

5,500 hectares….

Although having to endure many big floods every year, the people of Thua Thien Hue have known how to overcome difficulties, research scientific and technical measures to improve the yield and quality of rice produced. In addition, with the support of local and provincial authorities, and State policies, rice production in Thua Thien Hue province has achieved the current results.

CHAPTER 2: ASSESSING THE ECONOMIC EFFICIENCY OF RICE PRODUCTION OF FARMING HOUSEHOLDS IN THE AREA

LOC BON COMMUNE, PHU LOC DISTRICT, THUA THIEN HUE PROVINCE

2.1. Overview of the research area

2.1.1 Natural conditions

2.1.1.1. Geographical location

Loc Bon is a commune in the semi-mountainous plain, 18km south of Phu Loc town and 20km north of Hue city. It has geographical coordinates from 16017' to 16023' North latitude and from 107041' to 107047' East longitude.

The administrative boundaries of the commune are as follows:

- To the East, it borders Loc Son commune, Loc An commune, Phu Loc district.

- West borders Huong Thuy town

- To the South, it borders Xuan Loc commune, Phu Loc district and Duong Hoa commune, Huong Thuy town.

- The North borders Thuy Phu commune, Huong Thuy town

Traffic has two main axes: the railway and National Highway 1A passing through, currently adjacent to Huong Thuy town and Loc Son town in the future, thus creating favorable conditions for trade exchange in the market in all three regions of the North, Central and South to develop the socio-economic in the direction of opening up to the outside.

The total land area of ​​the commune is 3,273.23 (ha). The area is divided into 9 residential villages, including: Hoa Vang 1 village, Hoa Vang 2 village, Hoa Vang 3 village, Hoa Vang 4 village, Binh An village, Hoa My village, Thuan Hoa village, Duong Loc village, Hoa Loc village and 2 agricultural cooperatives.

2.1.1.2. Terrain and soil

Terrain is one of the basic natural factors that cause climate differentiation and thereby affect the distribution of crop structure.

Loc Bon is a semi-mountainous plain commune divided into 3 regions:

• The West is a mountainous area with gentle slopes, suitable for forest development.

• The East is a low-lying area suitable for growing two rice crops and raising freshwater fish.

• The center is an area with a fairly flat terrain, with National Highway 1A creating favorable conditions for infrastructure development (electricity, roads, schools, stations), economic development and residential areas, with enough area to develop according to the urbanization trend. In addition, in the central location, there is also the Nong River originating from the low mountainous area passing through and flowing into the Dai Giang River.

Land is an important component of the living environment, the distribution area of ​​residential areas, national defense and security, the place to build economic - cultural and social facilities. As one of the valuable resources and land is also a limited resource, if the use of land for this purpose increases, the area of ​​land used for other purposes will decrease. Wasteful and ineffective use of land destroys the land as well as the rate of population growth, especially in areas where the population is densely populated, causing land to be increasingly encroached upon and become scarce.

2.1.1.3. Weather and climate

As a commune located in a province in the central coastal region, it has the characteristics of a tropical, monsoon climate. It is the junction between the North and South regions, so it is affected by the climate of both regions. It has a harsh climate, with two distinct dry and rainy seasons: the dry season starts from March to July, and the rainy season starts from August to February of the following year.

Temperature: Low temperature is about 100C -190C, average temperature is about 200C

-300C, high temperature about 310C-380C.

The average humidity is 82%, the absolute humidity is 15%. The nature of different air currents in each season creates different dry and wet periods. Winter has the highest humidity and the most rain.

Rainfall: Due to the influence of the Phu Gia, Ca Tong, and Phuoc Tuong mountain ranges, the rainfall here is relatively high, with an average annual rainfall of about 2800-