Description

The viability of Vegetable-Agroforestry (VAf) system is constrained by various factors, including farmers’ inability to invest in the system, inadequate institutional structures for facilitating information flow, and lack of market incentives. This paper reports on a scoping study of the policy environment of VAf in Vietnam and the Philippines. We hypothesized that policy incentives are needed to stimulate smallholder investments in VAf.

In both countries, the policy environment for VAf is Generally encouraging with entrenched incentives to boost the contribution of the forestry and agriculture sectors to national economic growth. However, in both situations, the benefits to smallholders have been limited. Policy incentives for smallholders exist albeit limited, but disincentives persist – in Vietnam, only commercial fruit and vegetable producers are actively involved in the growth of the sector; similarly, large farmers in the Philippines benefit more from national policies than smallholders because not only that most policies are inherently partial to their interest, they are also capable of leveraging policy implementation. In both countries, smallholder investments in VAf require policy actions that address issues impeding the growth of the vegetable industry including price regulation and control, commodity protection, cost reduction across the value chain, removing non-tariff barriers, and global trading regimes; and transaction costs, high capital outlay in developing forest areas, and uncertainties in timber prices for the forestry sector.

There are distinctive differences in the policy development process between the Philippines and Vietnam, which suggest different ways of promoting VAf in these countries. Philippine local governments have policy-making powers, and could formulate incentive-based policies to stimulate local investment in VAf, whereas in Vietnam, the impetus for policy change emanates from the people’s National Assembly. Policy efforts to encourage smallholder investment in VAf in the Philippines can thus be initiated at the local level, while central government takes the lead in Vietnam.

The profitability of vegetables and agroforestry products is grossly affected by precarious market conditions at the national and international levels, where smallholders have no influence or control; hence targeted policy incentives are needed if smallholders are to invest in VAf. Finally, regardless of differences in governance features, institutional capacity, and size of economy in both countries, the overall viability of VAf depends on a whole set of policy support that both national and local governments can provide. The future of smallholder investment in VAf is therefore a political imperative.