Vietnam frets over rural incomes, unemployment

HANOI, Oct 9 (Reuter) - Vietnam faces severe problems of low income and rising unemployment in the countryside, home to 80 percent of the population, new Deputy Prime Minister Nguyen Cong Tan said in an interview published on Thursday.

``...the biggest problem is how to purchase farmers' products at a price which is beneficial for the farmers,'' Tan told the Communist Party daily Nhan Dan. ``This is my biggest worry.''

Tan, who has special responsibility for agricultural policy and rural development, said excess labour was increasing in the countryside, even during harvesting.

``As industrialisation and modernisation is carried out, productivity will increase and the number of unemployed farmers will increase further. To create jobs for the abundance of labour in rural areas will be a big challenge,'' he said.

There are no official figures for the vast ranks of either under-employed or unemployed people in Vietnam.

Last year, an official report said a quarter of the 24 million rural workforce was under-employed, and a government official predicted that the number of unemployed people nationwide would climb from 2.1 million people -- about six percent of the working population -- to 8.5 million by 2000.

Vietnam is now the world's second-biggest exporter of rice, but millions of its small farmers struggle to make ends meet because of low prices and a purchasing and distribution system which gives private traders and state-owned firms an advantage.

According to the Vietnam Economic Times, the Ministry of Agriculture estimated last year that farmers in the Mekong Delta earned just $60-70 a head from rice after paying all their production costs.

``There's growing concern about the rising number of indebted smaller farmers who are being forced to sell their land,'' the semi-official monthly said in its latest edition. ``And depressed prices this year meant that farmers left land fallow.''

Many of Vietnam's farming communities have been left behind in recent years while living standards in urban areas, thanks to a decade of economic reform, have rocketed.

Analysts say frustration over the widening urban-rural wealth gap was partly to blame for recent unrest in the northern province of Thai Binh, which had long been considered a cradle of the communist revolution.

Tan said there was an urgent need to take the drive for modernisation into rural areas, where good roads and reliable supplies of electricity and water are scarce, to iron out the inequalities between town and country.

``Infrastructure in rural areas is still poor and backward -- it needs adequate investment to boost production and help with eliminating hunger and reducing poverty,'' he said.