Crisis adds to modernisation of Vietnam’s labour structure

Labour shortages are threatening quality of products and viability of the companies themselves. Photo: Le Toan

The strict implementation of social distancing measures in the provinces of the Mekong Delta region is causing a shortage of harvest workers and further hindering purchases of many companies trading and exporting agricultural products.

The output of fruit company Vina T&T Co., Ltd. is at an all-time low, only reaching a maximum of 30 per cent of previous rates after being forced to change its harvesting procedures to meet new regulations.

Workers used to harvest fruit from 6am to 6pm. But now, the workers start as early as 4am to bring the fruit to preliminary processing factories at 6.30am. At 10pm, a truck picks up the fruit to transport them to Ho Chi Minh City’s ports early the next morning.

“The business will suffer damage either way,” said Nguyen Dinh Tung, general director of Vina T&T. “Our output is too small and not enough to fill containers. But, if we’re waiting for enough shipments, the quality of the fruit will be reduced. After harvest, fruits must be processed immediately to ensure export quality and standards,” explained Tung.

Between July and September, Vietnam’s agricultural sector needs a larger labour force than usual to harvest the summer and autumn crops of rice and fruit. If the labour shortage is not resolved soon, the production of this important economic sector will be severely affected.

Le Thanh Tung, deputy director of the Ministry of Agriculture and Rural Development’s Department of Crop Production, said that in August the western provinces will harvest about 640,000 tonnes of produce. According to Tung, the harvest and consumption of fruit in previous months were relatively good, but began to slow down. From May to August every year, all southern fruit trees are off-season, so the output remains low.

However, with the harvest season now in full bloom, the lack of harvesters and congestion in transportation could threaten output and cause dramatic losses for many businesses. They are now concerned that if the fruit is not picked and the crops are not pruned, their income will be affected temporarily. What is worse, if the crops are not pruned, crop productivity will be lowered in the long run.

Lack of hands

This year’s summer-autumn rice harvest may not be as smooth as before. The Department of Crop Production expects the rice harvest this season to be very large. This August, about 700,000 hectares of rice plants are to be harvested in the southern provinces, producing 3.8 million tonnes of edible rice. The remaining area is scheduled to be harvested in mid-September, with a total production of about 8.6 million tonnes.

To cope with this amount of rice, businesses have carried out recruitment campaigns to attract workers from nearby localities, but there are still not enough.

Nguyen Van Thanh, director at Phuoc Thanh IV Co., Ltd., said that his company is purchasing rice from the farmers only very slowly as only about a third of its own workers have registered to participate in the stay-at-work model.

Elsewhere in An Giang province’s Thoai Son, Vrice Co., Ltd. has merely harvested about 135 of its 250ha of rice plantation. The stay-at-work model has not improved the situation, as only about a quarter of its workers registered to participate.

Vrice has tried to rent drying ovens and store the crop at the harvest site in many areas, but since the local government has prohibited the passage of boats, this method has increased the cost of the rice by up to VND300/kg (1.3 US cents).

In the past few years, the shortage of labourers, especially seasonal workers, has always been a problem in agricultural production. Many products are still harvested by hand, and labour costs are constantly increasing, contributing to the shortage and increased production costs.

This year, the shortage of workers has hit many businesses when they are at the peak of harvesting period. The price of hiring agricultural workers has increased by up to 40 per cent compared to three years ago, and many business households cannot hire them on these salaries.

Harvesting workers and rice traders in Long An mainly used to come from the neighbouring provinces, but now many of them do not come any more as social distancing made the journey nearly impossible.

Many traders, meanwhile, accept to put down deposits and do not come to buy rice in the areas bordering Cambodia because they cannot return in time.

Nguyen Chi Thien, deputy director of Long An Department of Agriculture and Rural Development, said that currently 150,000ha of rice plantations in the province are still waiting for workers to harvest the crops and traders to buy them.

Labour mobility trends

That the agricultural sector is short of labour is, however, not a new problem that is only connected to the pandemic. Vietnam’s industrialisation has pushed numerous young people to work far away from the fields and outside the provinces to find more stable income sources in or around the cities.

Data from Ba Ria-Vung Tau Department of Agriculture and Rural Development showed that agricultural labourers accounted for 40 per cent of the workforce structure in 2010. But by 2015, the figure was only about 25 per cent.

According to the 2019 Population and Housing Census of the General Statistics Office, urban population rose to 33.12 million in 2019 from 26.5 million in 2010. Annual statistics further show that the proportion of employed workers in agriculture, forestry, and fishery sector in the country continuously decreased, from 53.9 per cent in 2009 to 35.3 per cent in 2019. This is the first time in Vietnam’s history that the number of employees in the service sector is higher than in agriculture, forestry, and fisheries.

Dr. Dao Quang Vinh, director of the Institute of Science, Labour and Social Affairs, said that the number of labourers in agriculture in the past five years has fallen by less than 2 per cent annually. According to Vinh, this rate is not high – however, in the past one or two years, the rate has been more around 3 per cent per year.

According to Minister of Agriculture and Rural Development Le Minh Hoan, labour mobility depends on push and pull factors. The impetus comes from jobs in large cities and industrial zones, with people being pushed out of rural areas because of a lack of secure jobs.

Hoan added that it is impossible to interfere in the process of labour movement, as only a balance between these push and pull factors could retain a part of the farmers.

“To keep many farmers in the countryside, there is no other way than to create new industries right there,” Hoan said. “The income in rural areas may not be as high as in urban areas, but it is possible to keep farmers in the countryside when the living environment, health conditions, and education options further improve.”