Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

Vietnam Environmental Export Market Plan

Chapter 11 - Soil and Forestry

Current Trends

Protection of soil quality has focused on better management of Vietnam's forest resources and on overuse of pesticides and fertilizers. Awareness of the need to protect forests in preventing soil erosion and related flooding was highlighted in November and December 1999, when the central region of Vietnam was devastated by the largest flooding to hit the country this century. Deforestation of surrounding hills and mountainous areas in the central region were partly blamed for the massive scale of the floods.

Since the early 1990s, the government has stepped up its efforts to prevent deforestation, but has had limited success. An estimated 19 million hectares of Vietnam's total land area of 33 million hectares are classified as forest. Of those 19 million hectares, however, only an estimated 9.3 million hectares are still covered by trees and are considered natural forests. Deforestation has been the result of years of warfare, uncontrolled industrial logging, and unsustainable logging by rural populations.

The Vietnamese Ministry of Agriculture and Rural Development noted in 1997 that the country's green coverage was less than 30 percent. In some highland and mountain areas, such as Lai Chau and Son La, the forest coverage has fallen to as low as 8 to 10 percent. The General Department of Statistics estimates that up to 100,000 hectares of forests are destroyed every year.

Table 11.1, based upon a World Bank report published in 1994, gives an indication of the rate of deforestation in Vietnam since 1943. Before 1993, wood-product industries sourced all their raw materials from domestic forests. As timber demand grew during the economic boom of the mid-1990s, high-quality timber resources diminished. In an attempt to stem deforestation, the government placed a number of bans on the export of products using domestically-sourced timber. In 1997, the prime minister called for a moratorium on logging in Vietnam's natural forests and instructed the Ministry of Agriculture and Rural Development (the ministry responsible for managing the country's forest resources) to convert the remaining forest area into protected reserves.

Both plans succeeded in reducing the amount of timber exploited. Vietnam harvested 350,000 cubic meters of timber in 1998, according to official estimates, down from levels in the early 1990s of 1 million cubic meters per year. To bridge the shortfall of raw supplies, domestic wood processing industries began to source raw materials from illegal imports from Cambodia and Myanmar, as well as by legal imports, primarily from Indonesia.

Table 11.1 Forest Cover and Barren Land in Vietnam

		*Forest cover*		*Barren area*
	*Land area*	*% of land area*		*% of land area*
*Region*	*(thousands of hectares)*	*1943*	*1991*	*1943*	*1991*
Northern mountains	7,645	95	17	60	65
Northern midlands	3,982	55	29	27	33
Red River delta	1,030	3	3	5	14
North central coast	4,002	66	35	40	44
South central coast	4,582	62	32	42	49
Central highlands	5,557	93	60	25	32
Northeast Mekong	2,348	54	24	23	34
Mekong delta	3,957	23	9	12	21
Totals	33,104	57	29	35	42

Source: World Bank, Environmental Program and Policy Priorities (1994).

Deforestation continues, however. Slash-and-burn agriculture is still practiced in many areas, with harvesting cycles too short for forests to be replenished. Land designated for protection is still used by rural farmers for grazing livestock. State-owned forestry enterprises have been allowed to continue operations, because officials are concerned about increasing unemployment in the already poor rural areas.

The government has initiated several action plans to try to readdress the problem. The 10th National Assembly approved an forestation plan covering 5 million hectares. Two million hectares will be protected forest, and 3 million hectares will be used for industrial purposes. The government's goal is to have 14.3 million hectares of total forest area by 2010, an increase from the current 9.3 million. Total funding needed for the project is estimated at $2.5 billion.

There are concerns that this plan will be as unsuccessful as the plans implemented earlier in the decade, such as the "Greening the Barren Hills" plan of 1992. According to the World Bank, this plan failed because the day-to-day concerns of local populations were not considered. Incentives to protect or manage the resources in a sustainable manner did not outweigh the immediate need for income, shelter, and fuel. As a result, natural forests areas have continued to decline.

Liberating Vietnam's agricultural sector and dismantling its rural cooperatives have led to tremendous growth in farming. Since beginning its renovation process in 1986, Vietnam has moved from a net importer of rice to the world's third largest exporter. Regions that once only grew one crop of rice a year now can harvest two or three crops. This productivity growth has been accomplished through the use (and overuse) of fertilizers and pesticides (Table 11.2).

Anecdotal evidence from farmers in the Mekong Delta point to declining fish stocks due to the overuse of pesticides. The Ministry of Agriculture has conducted surveys of farming families in the north, south, and central regions of the country. Use of pesticides in all of these regions has increased by 80 percent to 90 percent since 1986.

Studies conducted in the Mekong delta and in the Red River delta show that pesticide levels in the water, soil, air, and produce, are higher than standards set by the National Environmental Agency. In a survey of vegetable growing areas in Khanh Hoa province on the south central coast, 25 percent of the vegetables sampled had pesticide levels 2 to 6 times higher than standards. Thirty-nine percent of 423 soil samples taken showed levels 2 to 40 times higher than standards.

Table 11.2 Pesticide Use in Vietnam,1980 –1999 (tons per year)

*Year*	*Volume*
1984	10,000
1992	21,400
1995	30,000
1999	130,000

Source: Ministry of Agriculture and Rural Development.

Market Opportunities and Competitive Situation

The forestry sector has received a substantial portion of overseas development assistance (ODA) commitments over the past five years. Many of the largest projects in the sector were developed in the mid-1990s, with implementation in 1997 and 1998. Table 11.3 shows some of the largest forestry ODA projects to date.

While attention is still focused on improved management of Vietnam's natural resources, ODA and government funding trends are moving away from forestry toward urban pollution problems (water supply, drainage/sewerage, wastewater treatment, etc.).

Coastal Wetlands Protection

A $65.6 million coastal wetlands protection and development project is expected to help restore the Mekong delta's depleted coastal mangrove swamps. The six-year project will develop sustainable resource use in six provinces, including Ca Mau, Bac Lieu, Soc Trang, and Tra Vinh provinces. About 60 percent of the mangrove coverage in these provinces have been lost since 1984 because of logging and uncontrolled shrimp-farm development. Project financing will come from a $31.8 million loan from the World Bank, $11.3 million loan from Danish International Development Assistance (DANIDA), and $22.5 million loan from the Vietnamese government. The project is scheduled to be carried out between 2000 and 2006.

Table 11.3 Five Largest Ongoing Overseas Development Assistance Projects in the Vietnamese Forestry Sector

	*Amount*		*Executing*
*Donor*	*($M of U.S)*	*Duration*	*Title*	*Agency*	*Project Objective*
Asian Development Bank	$33.0	1997-2003	Forestry Sector Project	MARD	To restore vegetative cover of mountainous areas and to raise productivity of country's forestry resources.
World Bank	$32.3	1998-2003	Forest Protection	MARD	To protect and manage natural forests and reduce dependency on forests for subsistence and cash.
BMZ	$19.6	1997-2002	Vietnam Forestation	KfW	To establish social forestry programs.
European Union	$19.3	1997-2003	Resources Conservation in Nghe An Province	MARD	To reduce destruction and degradation of forest resources in Pu Mat Nature Reserve through sustainable resources management.
World Food Program	$15.6	1997-2001	Smallholder Forestry Development	MARD	To increase village-level incomes through village tree nurseries and by planting fruit and cash-tree species.

MARD = Ministry of Agriculture and Rural Development
KfW = KfW Bank (German Development Bank)
BMZ = Bundesministerium f�r Wirtschaftliche Zusammenarbeit und Entwicklung
Source: Mekong Research, Ltd.

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