Renting and buying are effective solutions for land accumulation.

Land accumulation is an inevitable trend towards commodity production. From the production practices taking place in many localities, many opinions say that leasing land to enterprises is a quite effective form.

Mr. Nguyen Ngoc Que, Director of the Center for Agricultural Policy Consulting (CAP), commented that there are currently debates on the direction of land reallocation. One side is the view that, in order to increase economic efficiency, it is necessary to accumulate land in the hands of skilled farmers. Therefore, there should be policies and strategies to facilitate the land reallocation process, in order to increase production efficiency and promote mechanization. However, there is also the view that policies and strategies on agricultural land should aim to ensure livelihoods for all farmers.

Weighing social and economic performance

Dr. Nguyen Trung Kien, an expert from CAP, said that the total agricultural land area of ​​Vietnam is 9.4 million hectares, an average of only 1,560.4 square meters per person, less than 1/3 compared to Thailand and Cambodia. Currently, 70% of rural households have an agricultural land area of ​​less than 0.5 hectares; households with more than 3 hectares account for only 2%. Economic efficiency in agricultural production is lagging behind other countries in the region, with the average income of each agricultural worker in Vietnam reaching less than 400 USD/year, lower than both Laos and Cambodia.

Small areas increase the number of working days per unit area, making it difficult to apply mechanization synchronously. Research shows that the smaller the farming area, the higher the production cost. For households with less than 0.2 hectares, the investment cost to produce 1 kg of rice is 2,000 VND, while for households with more than 3 hectares, the cost is only 1,500 VND. Small-scale production makes it difficult to organize production, organize product lines and link value chains, cannot create large-scale production, the quality of goods is uneven, complicates the management of quality, food safety and hygiene and disease control, increases production costs and commercial transaction costs.

In Vietnam, there are 3 groups of land use conversion taking place. That is, the conversion between farmers in 2 forms: land consolidation or farmers buying and leasing land from each other. The land use conversion group through cooperatives includes 2 types: farmer households contributing land for production, or farmer households not contributing land but agreeing on market orientation, input, output, and farming methods. The land use conversion group through agricultural companies and enterprises includes 3 forms: farmers contributing capital with land use rights, enterprises leasing land from farmers, and large-scale field models.

According to Ms. Le Thi Kim Dung, representative of Oxfam in Vietnam, through many researched land consolidation models, it is found that land consolidation only reduces the number of plots of each farmer but does not increase the scale of cultivated land. The large-scale field model is still confused in management from production to market. With land consolidation between farmers and enterprises, many models of farmers contributing capital with land use rights have been implemented but have not achieved economic efficiency. Only by leasing land and transferring land use rights can accumulated land be exploited effectively.

For example, in Luong An Tra commune (Tri Ton - An Giang), for many years now, the spontaneous process of land acquisition has taken place, farmers buying each other's land. Up to now, the rate of households without agricultural land in this commune is 70%, households with more than 10 hectares of land account for more than 5% of the total number of households, some households have accumulated more than 100 hectares of land. There are still many opinions surrounding this phenomenon when in reality, some farmers, for many reasons, have fallen into poverty and had to sell all their land, but it must be affirmed that the land acquisition process here has helped mechanization develop very quickly. Currently, Luong An Tra commune has 600 plows and 28 combine harvesters. Labor productivity has increased significantly, reducing production costs. Previously, hiring a harvester to harvest by hand cost 120,000 VND/1,000m2, now hiring a harvester only costs 70,000 VND.

Enterprises renting land from farmers: Win-win situation

According to the assessment, the model of enterprises renting land from farmers, then farmers working for the enterprise, is quite successful. Typically, Lam Son Sugar Joint Stock Company rented land from farmers in Van Son commune (Trieu Son - Thanh Hoa) for 20 years. Up to now, 492 farmers have rented land with an area of ​​76 hectares to the company to organize planning into a large sugarcane growing area. Thanks to that, the cost of sugarcane production has decreased from 8.5 million VND/ha to 3.8 million VND/ha, productivity has doubled compared to before. Farmers are paid both land rent and labor by the company. A survey by the Vietnam Chamber of Commerce and Industry (VCCI) shows that 100% of farmers renting land have higher incomes than before and compared to the group of households producing on their own.

Phong Thuy Private Enterprise in Duc Trong (Lam Dong) rents land from farmers for 5 million VND/sao/year (1 sao in the Central Highlands = 1,000m2), implementing the cultivation of high-quality vegetable varieties and commercial vegetables according to a high-tech model. Phong Thuy Private Enterprise employs 130 workers who are the farmers from whom they rent land, with an average income of 4 million VND/person/month. Previously, farmers' income was no more than 5 million VND/year.

Research shows that most large-scale TTRD models are more economically efficient when switching from rice cultivation to other crops according to market demand. When enterprises rent land, the rental price is negotiated closer to the market (about 3-5 million VND/ha/year); while in models of capital contribution by cultivated land, companies impose land use rights at too low a price (only about 10 million VND/ha for a period of 50 years or forever). Because they lose money to rent land, enterprises must find ways to invest effectively. As for farmers who contribute capital by land, they share profits and share losses if the enterprises are not proactive.

In order for the land acquisition process to take place effectively, both aiming at large-scale production and ensuring farmers' livelihoods, many opinions suggest that, first of all, the State should consider withdrawing land from agricultural and forestry farms to serve agricultural development projects, avoiding taking land from the people. It is necessary to adjust food security policies in a more flexible direction to encourage land acquisition motivation, creating favorable conditions for converting rice-growing land to other crops with higher value in areas without competitive advantages in rice. It is necessary to remove the transfer limit, remove the land-exceeding tax and replace it with a resource tax on agricultural land. In fact, from the situation of farmers buying land from farmers in Luong An Tra commune, it is seen that households often circumvent the law of exceeding the land limit by asking relatives to stand in their names. This leads to increased risks for households exceeding the land limit, increasing land disputes.

According to Rural Economics