2.3.2.7. Production and business efficiency on farms
Table 2.21: Business performance evaluation indicators by type
farm 2006
Target
Unit | Farm type | ||||||
TT Fruit trees (n=3) | Annual tree information (n=2) | Perennial plant information (n=1) | TT livestock (n=3) | TT Forestry (n=2) | TT Synthetic (n=10) | ||
Value Added (VA) | 1000 VND | 81,007 | 27,300 | 48,510 | 47,875 | 68,779 | 52,931 |
VA/labor | 1000 VND/unit | 40,503 | 8,400 | 6,930 | 13,096 | 15,609 | 19,157 |
VA/capital | Time | 0.88 | 1.60 | 0.12 | 0.49 | 1,791 | 0.44 |
VA/ area | 1000 VND/ha | 12,115 | 3,466 | 3.122 | 24,466 | 4,774 | 9,300 |
Goods rate | % | 93.94 | 68.62 | 46.13 | 78.94 | 88.32 | 76.28 |
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Source: Direct survey data from farm owners
Based on the data analyzed in the table above, we used the statistical method of pairwise comparison using SPSS (Statiscal Package for Social Sciences) statistical data processing software to test the reliability, the reason is that the size of the groups has a large deviation, especially for the group of perennial farms with only 1 farm (for details, please see appendix 12 - 16 of the thesis).
The results of analysis and evaluation are as follows:
* Farm added value:
The added value of fruit farms is 81 million VND/farm, its VA is higher than that of livestock farms (1.69 times) and mixed farms (1.53 times). Thus, the fruit tree model has promoted the local potential and brought high economic efficiency.
* Labor efficiency (VA/ labor)
Fruit farms have a value added per worker that is 2 times higher than that of general business farms. This shows a characteristic of these industries.
Non-agricultural, forestry and fishery occupations in rural areas often have low service value. At the same time, it also affirms that fruit trees are a strength and contribute to solving employment for local people.
* Farm capital efficiency (VA/capital)
Forestry farms have the highest VA of 1,791 VND/1 VND of invested capital compared to other types of farms: General (about 4 times); livestock (nearly 4 times); fruit trees (about 2 times) and annual crops (about 1.1 times).
The reason why forestry farms have high VA/capital is because the investment rate per unit area in forestry farms is usually not large. Besides, forestry land in Bac Kan is basically good, so it helps reduce costs for investors.
* Land use efficiency (VA/area)
The livestock farm has VA of 24,446 million VND/1 ha of farm land, twice as much as the VA from 1 ha of land in the fruit farm. However, this data also shows that livestock farms in the province often do not have closed pastures and the cost of housing is not large (extensive farming).
* Goods rate
Fruit farms have the highest commodity yield compared to annual crop, livestock, forestry and mixed farms. Citrus farms now have up to 70% of their area under harvest and this product has a high current commodity value.
The lowest commodity rate is annual crop farms with 68.62%, showing that short-term food crops such as rice and corn have low commodity value and the products are mainly for internal consumption.
2.3.3. SWOT analysis to find basic issues in farm economic development
Through the opinions of experts, managers at provincial, district and commune levels; and direct investigation information from farm owners, we built a SWOT analysis table to find out the basic issues for developing farm economy in Bac Kan province as follows:
Table 2.22: SWOT matrix on farm economy in Bac Kan province in 2007
Strength:
- Equity is the main source;
- Epidemics rarely occur and do not cause major consequences;
- No environmental impact;
- Special products, ensuring food safety;
- No difficulty in product consumption;
- Income is not high but stable.
Weakness: - The number of farms is growing slowly; - Small scale, low level of technical facilities and technology; - Untrained labor is the main; - Low crop and livestock productivity; - Products are mostly consumed locally; - Low average income/farm. | |
Opportunity: - Priority to rent land in concentrated planning areas for economic development; - Local technical support through implementation of programs and projects; - Economic and social infrastructure is invested in a concentrated and synchronous manner in planning areas; - Participate in training courses to improve management knowledge, techniques and skills; - Have access to many credit sources with preferential interest rates; - Deep integration creates access conditions product consumption market | Challenge: - Land accumulation is difficult; - Legal status and business registration of the farm owner; - Ability to receive and apply modern science and technology in production and business; - Quality of agricultural products and food hygiene and safety. - Distribution system, product consumption linkage; - Prevent dangerous diseases associated with protecting the living environment. |
In summary: The farms in Bac Kan province at the time of the study were still small in scale. The application of science and technology in production was still weak, and economic efficiency was not high. On the other hand, due to the management level and the labor level being mostly ordinary, the farm products were not large and lacked competitiveness. The average income per worker in the farms was still low.
2.3.4. Reasons hindering the development of farm economy in Bac Kan
* Lack of development planning: The province has not yet implemented economic zoning and land planning for farm economic development.
Although the forest and forest land area is large, it is fragmented and has no concentrated area, so currently it is very rare to have a contiguous land area of about 30 - 50 hectares that is not involved in other planning.
* Inadequate land management, difficult land accumulation and concentration:
- Currently, in rural areas of Bac Kan, it is common for a household to have up to several dozen plots of land, corresponding to several dozen red books. Households receiving land and forests are mainly based on the family's old upland fields, which are spontaneous. To ensure fairness when dividing upland fields to households, there must be different types of land, so up to now, the fragmented and small-scale situation is difficult to overcome.
- Due to the social and psychological characteristics of the people in the mountainous areas, there are issues related to ancestral land, land encroachment due to slash-and-burn farming practices... while the state has no legal regulations to regulate them.
* Internal organization of farms still has many weaknesses: Many farm owners still lack experience and knowledge of economic management. Training and fostering of management knowledge and technical expertise has not received due attention from both farm owners and state management agencies.
* Social environment still has many obstacles: Due to the mountainous characteristics, farmers in Bac Kan province are mainly ethnic minorities with rich customs, lifestyles, psychology, and culture, with many positive aspects but also great limitations. Up to now, the practice of grazing buffalo and cows is still a big obstacle to agricultural production.
* Unfavorable business investment and judicial environment:
- By the end of 2006, only 2 farms had registered their businesses, so state support for farms was very limited.
- The province's annual capital for basic construction is limited, the demand for urbanization is large, so the capital allocation for construction of irrigation works, transportation, electricity, and domestic water for rural areas is not much. The speed of investment in construction of technical infrastructure for rural areas is slow.
- The labor market has not yet formed, so finding stable labor to work on the farm is a difficult problem for farms. The market for agricultural products is still small.
- Agricultural and forestry extension work has successfully implemented many pilot models, but the efficiency is low, and mass production cannot be replicated in farming households. There are still too few agricultural and forestry extension officers at the grassroots level, not closely following farmers to grasp their needs and directly providing technical assistance to farming households.
* State management of farm economy is still lax:
- Management agencies do not know the exact number of farms as well as the economic activities of the farms. Statistical data according to the channels of state management agencies are also inconsistent: According to statistics of the Department of Agriculture and Rural Development of Bac Kan in 2004, the number was 64 farms, while the data of the Provincial Statistics Office at the same time showed that only 21 farms met the criteria.
- Management of disease prevention and control, food safety and hygiene, quality of agricultural products... are still open.
In summary: Although there are still many obstacles and difficulties in the development process, it can be affirmed that: Economic development in the direction of family farms; building a sustainable agricultural production model is an inevitable trend for Bac Kan farmers to continue to promote production and business in the direction of commodity production on an increasingly large scale.
Chapter 3
SOME SOLUTIONS FOR FARM ECONOMY DEVELOPMENT IN BAC KAN PROVINCE IN THE COMING TIME
3.1. PERSPECTIVE ON FARM ECONOMIC DEVELOPMENT
3.1.1. Viewpoints on farm economic development in the period of industrialization and modernization in Vietnam
3.1.1.1. Farm economy is a form of organizing commodity production in agriculture and rural areas, mainly based on households, aiming to expand the scale and improve production efficiency in the fields of cultivation, livestock breeding, aquaculture, forestry, linking production with processing and consumption of agricultural, forestry and fishery products.
The development of farm economy should follow the order from simple to modern, taking the development of household economy as the premise for forming farm economy, avoiding the use of direct economic stimulus tools to create a system of movement farms, which are unstable and unsustainable.
Building households into self-sufficient economic households. In many mountainous areas, there are still two types of families: large families and small families. Large families, due to the impact of the new business mechanism, due to increasingly insurmountable difficulties in food, are increasingly disintegrating faster (this is a positive trend). In general, in the northern mountainous provinces, small families (or sub-families) are the cells of society. This type of family has the most flexible adaptability to small-scale agriculture. The allocation of land and forests to households is very much in the right direction and needs to be promoted faster and stronger. However, the key to the issue of allocating and receiving forest land is to clearly define the ownership and inheritance rights of farmers so that farmers can truly feel secure in producing and investing long-term in the style of farming on the land they have received.
Farm economy is the leading force in the production of agricultural commodities, and at the same time, it is also the leading force in the application of scientific and technological advances in agriculture in the period of industrialization. Farm economy is not a single force but is very diverse in characteristics, technical economic potential and production scale. Farms in mountainous areas are different from farms in plains and coastal areas. Farms producing food, industrial crops, fruit trees, are different from farms raising cattle, pigs, chickens, aquaculture, and are different from forests, so each type of farm in each period has different requirements for science and technology. Farm economy has small, medium and large scale, so the ability to absorb and apply scientific and technological advances is also different. Agricultural science and technology only brings economic efficiency when farms choose the right type and level suitable to the characteristics, requirements and specific economic and technical capabilities of each farm.
The farm is a place where science and technology can be promoted as an important factor in developing post-harvest technology: Harvesting, preliminary processing, preservation, processing and marketing - increasing the economic value of agricultural products. When the supply capacity on the farm is not enough, it helps to consume products for farmers and provide services (materials, techniques, etc.) to households around the area. With direct economic efficiency and production conditions in the area that are not much different, farmers in the area will learn to follow the economic model of these farms.
3.1.1.2. Developing farm economy to exploit and effectively use land, capital, techniques, and management experience to contribute to sustainable agricultural development; create jobs, increase income; encourage enrichment along with hunger eradication and poverty reduction; redistribute labor and population, and build new rural areas.
Agricultural production needs to meet the growing needs of society in the context of limited resources. Therefore, to develop sustainably, the basic way to solve this problem is to increase productivity. Due to the urgent need, there is a tendency that many areas of land are not suitable for