Cablegate: Post Proposes Food for Progress Program for Vietnam

This record is a partial extract of the original cable. The full text of the original cable is not available.

261020Z Aug 05

UNCLAS SECTION 01 OF 02 HANOI 002220

SIPDIS

USDA FOR J.B. PENN
USDA/FAS/EXPORT CREDITS FOR MARY CHAMBLISS, RON CROUSHOURN
USDA/FAS/FAA FOR SEBRANEK, ALEXANDER,
USDA/FAS/CMP/G&F FOR RIEMENSCHNEIDER,RADLER

E.O. 12958: N/A
TAGS: EAGR EAID VM
SUBJECT: POST PROPOSES FOOD FOR PROGRESS PROGRAM FOR VIETNAM

1. Summary. The Vietnamese Mission has concerns that
USDA/Washington has removed Vietnam from the list of
priority countries for its Food for Progress program. The
food security situation in Vietnam remains precarious and
the country continues to make progress in introducing
greater political and other freedoms. Accordingly, the
Mission proposes a $4 million Food for Progress program for
Vietnam to be used for agricultural development, rural
infrastructure improvements and disaster relief. End
Summary.

2. Despite improvements in recent years, Vietnam remains
one of the poorest countries in Asia with a per capita
income of well under USD 600 per person. Levels of
malnourishment also remain very high at over 30 percent of
the population nationally, with certain regions facing much
higher levels.

3. Despite Vietnam's low income and high level of
malnourishment, USDA has indicated that Vietnam is not a
priority country for Food for Progress because it is a net
exporter of food and thus does not have a "food gap."
Vietnam relies very heavily on imports of fertilizer,
agricultural chemicals, equipment, petroleum, soybean meal
and fish meal to exploit comparative advantages in the
production of aquatic products and rice to achieve this
export surplus in food commodities. It is impossible given
available statistics to calculate a true balance when these
other food production imports are taken into consideration,
but clearly they significantly reduce, if not eliminate, any
trade surplus. Even an incomplete analysis, not accounting
for imports of petroleum and machinery used in agriculture,
aquaculture and fishery shows a surplus equal to less than 1
percent of Vietnam's food needs.

4. In fact, low per capita GDP and a large population
competing for limited land and other resources have created
a very precarious food security situation for Vietnam as
clearly indicated by its high malnourishment rate. In
addition, the exclusion of Vietnam based on its net exporter
status unfairly penalizes Vietnam for adopting the very
market-driven private sector initiatives that the Food for
Progress program is intended to encourage.

5. The Mission also questions USDA/Washington's apparent
assessment that Vietnam has failed to make adequate efforts
to introduce political freedom, which is another prime
prerequisite of the program. Although Vietnam is by no
means a representative democracy -- it is a one-party state
ruled by an unelected group of leaders -- it has made
progress over the years in expanding personal freedoms,
strengthening representative institutions and improving the
situation for religious believers. For example, the
Vietnamese are now essentially free to live the lives they
choose, reside where they wish and travel abroad.
Furthermore, the National Assembly (Vietnam's highest
legislative body) is increasingly playing a role as a
"check" to Government waste and abuse. In addition, Vietnam
has created a new framework on religion that bans forced
renunciations of faith and seeks to encourage heretofore
"underground" churches to operate freely and out in the
open. The number of prisoners of conscience in Vietnam has
declined significantly over the past two years. Finally,
Vietnam's press is increasingly able to play a watchdog
role, identifying government waste, fraud and mismanagement
and uncovering corruption. While none of this makes Vietnam
a "free" country, we believe it meets the definition of a
country making progress in this direction.

6. Thus, although USDA/Washington has removed Vietnam from
its priority list of countries for Food for Progress, the
Mission believes strongly that the need for the program
remains great and that Vietnam's current situation is quite
consistent with the goals outlined in the Food for Progress
legislation. Vietnam has used past donations to great
effect and can be expected to continue to do so for any
future program.

7. Accordingly, the Mission proposes an approximate $4
million program for Vietnam to be realized through
monetization of a 24,000 to 35,000 MT wheat shipment. In
accordance with with domestic needs and to support U.S.
industry marketing efforts, the wheat shipment would be
split between Dark Northern Sprin (minimum protein 14
percent) and Western White (maximum protein 10.5 percent).
Wheat is not produced in Vietnam and this shipment should
thus not disrupt domestic agricultural production.

8. Post proposes that the proceeds from the monetization be
used as follows:

A. Agricultural production and research. (Approximately 62
percent of the estimated proceeds. Areas of focus would be:

Improve systems for animal disease monitoring and control.
The ongoing outbreak of avian influenza in Vietnam points
out the great inadequacy of the country's current system and
the great threat this poses not only Vietnam but the entire
world. Emphasis would be placed on in-country training to
develop expertise in disease monitoring and management at
all levels in both the private and public sector. Money
would also be allotted for needed equipment and to encourage
the development of less disease-prone production systems in
the poultry and swine sectors.

Building on previous donations, work on developing
irrigation systems in several provinces. Many provinces are
poverty stricken and suffer from seasonal food shortages.
This project would develop several canals to feed a series
of smaller water networks throughout the provinces.

Continue research on quick testing methods for pesticide
residues in fruits and vegetables, and undertake a food
survey for chemical residues in Hanoi and Ho Chi Minh City.
As Vietnam becomes a larger producer of fruits and
vegetables, both local and foreign consumers are demanding
more information about chemical residues in the food.

Encourage development research and support for adoption of
biotech crops. Vietnam is expected to soon pass
legislation that will allow [biotech] adoption of biotech
crops. This will create a huge opportunity for improving
agricultural productivity in Vietnam. Funds will be used by
the Center for Plant Biotechnology to advance to development
of crops appropriate for Vietnam and to facilitate the
commercial adoption of biotech varieties.

B. Investment in rural infrastructure development for
building and rehabilitating rural roads, primary schools,
medical stations, electricity distribution, and drinking
water systems (approximately 30 percent of estimated
proceeds.)

The largest share of the funds would be allocated to the
construction of primary schools and health clinics in rural
areas. The key to improving the lives of rural children is
to provide each child with the opportunity to attend school,
and to ensure that there is a medical clinic within the
commune or district.

C. Disaster relief primarily small grants for construction
of housing, reforestation and other self-help local
empowerment projects. (Approximately 8 percent of the
estimated proceeds.)

MARINE

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