1. Introduction
Oxfam has been working in development assistance in Vietnam for more than two decades, with a strong focus on improving rural livelihoods. Trade and markets are important dimensions of our work.
Rice is an important commodity for Vietnam and farmers – for farmer’s livelihoods, domestic consumption and export. Vietnam has experienced very large and sustained growth in rice production over the past quarter century. This was achieved through land productivity gains and the increased intensification of production.
Rice is also a strategic commodity for Vietnam’s food security strategy (Resolution 62) with significant government support and administrative measures related to rice production and trade (e.g. administrative restrictions on land uses (and their conversions), rice land and paddy production targets, physical investments and management practices to ensure ample irrigation water (and flood control) for paddy production, tax concessions, financing/subsidies for public investment in rice storage capacity, the accumulation and management of strategic and other reserves by state entities, direct state trading operations, subsidized financing of state enterprise paddy/rice purchases, ‘floor’ prices for paddy purchases, Government to Government (G2G) export transactions, and targets or managed limits on annual rice exports, etc.) While the industry is ostensibly open to new entrants, SOEs have benefited largely from these policies.
Despite the very impressive expansion in rice production and rice exports over the past decade, the benefits to farmers appear to have been modest. Few rice growers have become wealthy and most can no longer rely upon rice as the basis of their household’s livelihood.
International rice prices have seen increases and higher volatility since 2008 (although rice has not seen the highest rice prices amongst agricultural commodities). Also this year, the price of rice on international markets remained high with favorable market conditions for Vietnamese rice export. However, it appears that rice farmers benefitted quite little from the 2008 export price spike, with the bulk of that year’s windfall gains accruing to the trading sector (and thus, perhaps, to the government treasury). An analysis of profits for 2009 and 2010 shows industry/trade gross margins to be considerably above the norm prevailing during the pre-2008 crisis period, while farmer profitability is tending to be squeezed by rising purchased input and labor costs.
This research aims to analyze who gained from this windfall gain on international rice markets. Based on a value chain analysis, the research seeks to identify which actors in the chain benefited from higher prices and how these resources were utilized. The research intends to analyze in particular the role of SOE’s, who dominate the rice trade. According to the World Bank report, Beyond the ‘Rice Bowl’ (2011), SOE’s account for more than 80 per cent of rice exports. In the domestic market, SOEs account for about 15 per cent of supply in northern regions, and approximately 10 per cent of supply in southern regions. Overall, SOEs account for approximately 35 per cent of production in the rice processing industry.
This research is part of Oxfam’s work on Rural Livelihoods (SCG1) and the GROW campaign. The research will provide analysis for Oxfam’s advocacy work.
The research is managed and funded by Oxfam Hong Kong (OHK), as part of its Agribusiness Expansion program.
2. Research objectives
Reviewing the period 2008-11, the objectives of the research are:
To determine how the benefits of windfall gains in rice export were distributed along the value chain, in particular amongst SOE’s and farmers, but potentially other actors
To evaluate the impact and use of such profits by SOEs
To analyze the benefit sharing from an equity, poverty reduction and farmer perspective
To recommend how reforms can deliver a more equitable benefit sharing, especially in the context of the announced SOE reforms
3. Methodologies
To be proposed by the researcher/consultant. The study can combine desk study, field work and/or informant interviews. The methodology will be developed further in collaboration with OHK before the consultancy starts. The consultant (team) is required to develop a draft outline for this research in the Expression of Interest (EoI) to be sent to Oxfam for screening and selection.
4. Task management
The task will be completed by a selected consultant (team). An Oxfam focal person will be available to provide guidance and support when required. A Letter of Agreement will be signed directly between OHK and the consultant (team).
5. Timescales
The research will be completed by 28 February 2012.
6. Deliverables
The deliverable is a report which will cover findings and recommendations. The reports includes, but not limited to, those aspects:
(i) Summary
(ii) Introduction and background
(iii) Analysis
(iv) Conclusions and recommendations for Oxfam
(v) Resources and references
(vi) Annexes (if any)
The report will be written in English.
The report will between 10-15 pages, excluding annexes.
The main target audience of the report is Oxfam staff and partners. An edited/summary version of the report may be used in a public publication.
7. Debriefing and workshop
A debriefing will be held at Oxfam office with the participation of interested stakeholders, where the main results of the study will be presented. Comments and recommendations emerging from the debriefing will be noted for incorporation into the final report.
8. Budget
The consultant (team) is requested to develop a budget plan for the analysis in the Expression of Interest.
9. Application and selection
Interested consultant (team) may obtain further information at the address below from 9h00 to 17h30.
Expressions of Interest should be submitted by 15 January 2012. The selection of the consultant team will be done by 20 January 2012.
The Expression of Interest should include detailed planning of activities, budget estimation, time plan, responsibility and working days of each team member, full CVs of each team member and proposed structure of final report.
The consultant (team) might be invited to discuss their Expression of Interest.
10. Contact
For more information, please contact: Bert Maerten, Associate Country Director, Oxfam Hong Kong in Viet Nam, 4th Floor - 22 Le Dai Hanh Alley, Ha Noi; Tel: +84 (0)4 3945 44 06 - Ext: 103; Mobile: +84 (0) 983 365 769; e-mail: [email protected] [1].