effect of agricultural privatization on communist political legitimacy in vietnam, The

Journal of Third World Studies, Spring 2003 by Raymond, Chad

In a reaction similar to the economic crisis of the late 1970s, the VCP leadership issued a flurry of new policies to halt further weakening of the centrally-planned economy. These policies and the changes they signaled became known as Doi Moi, or Renovation. VCP leaders stated that they hoped to "control the sources of goods," and restrict the free market to "a much smaller scale" by "cutting off all the tentacles of that hateful octopus."41 The avalanche of new regulations - over 300 in 1985 alone - only created more economic turmoil. Enterprises competed against each other and against the private economy, while local authorities made arbitrary policies in defiance of central regulations. Prices and supplies of goods fluctuated wildly.

Faced with severe shortfalls in grain deliveries to the state, and the growing threat of food shortages, the Party began to encourage private, familybased production. In November of 1986, the Council of Ministers approved Resolution 146, which urged cooperatives to allocate unused land to individual households for family use. Farmers were also allowed to privately raise livestock without limit. Households were prohibited from privately working fields listed in the production plans of state farms, cooperatives, and production collectives - which left most farmland technically still under collective production.

The new economic policies failed to maintain "price discipline." One official survey of 27 provinces and cities found that over 60 percent of the statemanaged enterprises were selling goods at prices higher than those mandated by the central government. Approximately one-half of the private business transactions examined were determined to be illegal, and nearly a third of Vietnam's provinces did not enforce price control at all in 1986.42 In 1987, despite claims from southern cadres that 91.7 percent of rural households in the South were collectivized, central authorities complained that in southern Vietnam "no more than 30 percent of collectives and cooperatives...performed work according to set procedures." The remaining 70 percent were characterized by "lax management" and individual household production.43

Real economic reform, and an official end to collectivized agriculture, arrived on 5 April 1988 with the release of the Politburo's Resolution 10. Resolution 10 formally abolished the requirement that farmers perform collective labor for cooperatives. Households were granted responsibility for all phases of cultivation, and gained the right to sell crops to the state at negotiated prices or sell crops on the free market. Tenure on land contracted from cooperatives was extended from three to fifteen years. The cooperatives lost their monopoly providing plowing, pesticides, and chemical fertilizer, and farmers could purchase these services either from private suppliers or from the cooperative on a fee-for-use basis.

Once farmers were free of collective labor, agricultural productivity exploded. The production of staple crops increased by approximately 2 million tons per year from 1987 through 1989, and rice exports soared from 0.91 million tons in 1988 to 1.95 million tons in 1992, making Vietnam the world's third leading exporter of rice. Vietnam has since maintained its export position, and in 1996, the country's rice exports exceeded 3 million tons.44 Farmers who produced little for the state while performing collective labor on cooperatives were quite able to produce huge surpluses for the private market on the same land.