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Cablegate: Frozen Assets: Record Cold Snap Harms Crops, Livestock And

VZCZCXRO4419
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHHI #0206/01 0530617
ZNR UUUUU ZZH
R 220617Z FEB 08 ZDK
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 7222
INFO RUEHHM/AMCONSUL HO CHI MINH 4335
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 02 HANOI 000206

SIPDIS

STATE FOR EAP/MLS
STATE PASS USTR FOR DBISBEE
AGRICULTURE FOR FAS

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EAGR VM
SUBJECT: FROZEN ASSETS: RECORD COLD SNAP HARMS CROPS, LIVESTOCK AND
ECONOMY IN VIETNAM

Ref: A) HANOI 141; B) 07 HANOI 1929

HANOI 00000206 001.4 OF 002


1. Summary: Now entering its sixth-week, a record long period of
cold weather is killing livestock and crops in northern and central
Vietnam, threatening the food source and economic well-being of some
of Vietnam's poorest populations. With temperatures from the city
of Hue north to the border with China dipping below normal for such
an extended time, the Ministry of Agriculture and Rural Development
is estimating total losses to be approximately USD 25 million. That
figure may rise if the cold weather persists. Local and national
authorities are taking actions to mitigate the effects on some of
Vietnam's poorest populations. Trade officials caution that the
weather's impact on Vietnam's crops, most notably rice, may affect
export forecasts. End summary.

BABY, IT'S COLD OUTSIDE
-----------------------

2. A record long cold spell, which began January 14, has inflicted
serious damage on crops and livestock in northern Vietnam.
Provinces from the central city of Hue north to Vietnam's
mountainous border provinces with China are reporting record low
temperatures. Temperatures have hovered between zero and 10 degrees
Celsius (32 to 50 degrees Fahrenheit) over the past 38 days, with
some locations in Vietnam's northernmost provinces even dipping
below freezing. Thanh Nien newspaper quoted the Director of
Vietnam's National Hydrometeorological Forecasting Center, Mr. Bui
Minh Tang, as saying this cold snap breaks the previous 31-day
record, set in 1989. Moderate temperatures returned to Hanoi and
parts of the north on February 21, and the cold weather is forecast
to ease throughout northern Vietnam in the next few days.

MOTHER NATURE IS EXTRACTING HER TOLL
------------------------------------

3. Government of Vietnam (GVN) and provincial officials are
reporting the cold has caused wide-spread and significant damage to
the winter-spring crop of rice, corn, peanuts and other plants. The
Ministry of Agriculture and Rural Development's (MARD) Crop
Production Department Director Nguyen Tri Ngoc estimated that by
February 18, the cold had destroyed more than 146,000 hectares of
rice and 9,500 hectares of rice seedlings, totaling more than VND
200 billion ($12.5 million) in damages. MARD officials told the
Embassy that in the 16 northernmost provinces, more than 67,000 of
the 293,000 hectares (23 percent) of planted rice were damaged.

4. The effect on livestock has been similarly damaging. The head of
MARD's Livestock Production Department estimated that 60,000 cattle
have died as a result of the additional strain on the animals caused
by the cold spell, resulting in nearly VND 200 billion ($12.5
million) in damages. About 75 percent of this number is reportedly
calves and young buffalo. Even if temperatures begin to thaw, these
figures could rise due to the residual effect the cold has caused on
stores of animal feed. MARD officials told the Embassy that the the
number of cattle killed by the weather could climb as high as
100,000. Deputy Director of Lai Chau Province's Department of
Agriculture and Rural Development (DARD) told the Embassy that not
only were cattle in his province dying from the cold, but the
weather has affected the growth and reproduction of livestock,
portending longer-term and costlier financial repurcussions for his
Lai Chau farmers.

5. Consequences of the cold spell are also being felt in Vietnam's
tourism industry. Provincial authorities are blaming the cold for
lower-than-forecast guest rates in Sapa, a popular tourist
destination in the northwestern province of Lao Cai, and other
popular sites in the region.

FROM COLD TO DRY...
-------------------

6. Even after the cold weather abates, the northern provinces are
facing the threat of a water shortage over the next three months,
which officials from the National Hydrometeorological Forecasting
Center attribute to low levels of rain during this cold streak and
the damming of rivers for hydroelectric power. MARD warned that
water available for rice and other crops could be down by about 33
percent in the spring, potentially making the situation more acute
for farmers in the region.

AFFECTING VIETNAM'S POOREST AND HARDEST HIT POPULATIONS
----------------------------- -------------------------

7. The abnormally cold weather is wreaking its worst havoc on some
of Vietnam's poorest populations - small-scale farmers and workers
in Vietnam's traditionally poor northwest, northeast and central

HANOI 00000206 002.2 OF 002


provinces (reftel A). Livestock and crop losses are threatening to
push some of Vietnam's farmers in these regions below the
GVN-defined poverty line of $130 a year or 35 cents a day. This
cold spell is bringing further misery for many in the central
provinces whose land was already devastated by waves of heavy
flooding last fall (reftel B). Residents - some of whom are still
awaiting housing reconstruction - have suffered double losses; in
December they replanted crops lost in the floods only to see these
descimated by cold in January. Recovery from these losses will be
difficult for many in the region.

THE GVN'S LATEST GOVERNANCE CHALLENGE
-------------------------------------

8. Local, provincial and national officials are working to adopt
policies to mitigate the affects on farmers and poor households in
these regions. On February 18, Prime Minister Nguyen Tan Dung
announced he had approved a VND 149 billion ($9.3 million) aid
package submitted by MARD. The plan includes payments for lost
animals and subsidies for farmers to buy new crops and livestock.
To supplement this plan, provincial authorities are growing rice
seedlings to supply to their farmers. Provincial DARDs, however,
report varying levels of preparedness to fulfill this role - Deputy
Director of Bac Ninh's DARD reported that it had sufficient seeds to
replant 90 percent of the province's damaged areas, whereas other
provinces like Vinh Phuc, where more than 50 percent of the rice
crop was destroyed, would only be able to provide for one third of
the demand. The Prime Minister also asked the Ministry of Labor,
War Invalids and Social Affairs (MOLISA) to provide relief on loans
to farmers whose crops and herds were damaged by the weather.

9. With the likelihood that the cold will drive more people under
the poverty line, the Prime Minister instructed MOLISA to review its
national poverty figures and to redouble efforts to ensure that
Vietnam's poorest households receive "urgent help." He further
instructed MOLISA to work with other GVN ministries to develop
targeted assistance programs for provinces where the poverty rate
exceeds 50 percent.

IMPACT ON TRADE
---------------

10. The Ministry of Industry and Trade (MOIT), together with MARD,
the Vietnam Food Association and several provinces are working to
develop new regulations on rice exports. MOIT Vice Minister Nguyen
Thanh Bien told newspapers that the directive is designed to
"regulate" rice exports to ensure domestic food security, while also
protecting the financial interests of Vietnamese rice exporters.
Bien cautioned that it is premature to determine annual volume
targets for rice exports, as the GVN must first ensure there is
enough rice for those living in the provinces affected by the cold
spell. (Note: Vietnam is the world's second largest exporter of
rice. In 2007, it exported 4.5 million tons. Despite the
uncertainty of the volume of rice exports, MOIT noted that as of
early February, the price of rice was $400 per ton, up from $300 per
ton in early 2007. End note.)

COMMENT
-------

11. While the long-term effects of this cold spell remain to be
seen, in the short term it has damaged two of the key industries for
the rural regions of northern Vietnam - agriculture and tourism.
The GVN and local authorities have been proactive in seeking
solutions to help affected rural populations, but pressure could
rise on the GVN to adopt additional poverty alleviation measures if
the cold weather continues, and if the forecast water shortage in
the north comes to fruition.

12. This cable was coordinated with ConGen HCMC.

MICHALAK

© Scoop Media

 
 
 
 
 
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