Frithjof Kuhnen (1996):
Synthesis of Current State of and Trends in Land Tenure and Land Policy in Asia

1.4.2 Vietnam

Before 1945, land ownership was extremely skewed. In 1945, all land became government property. The land was allotted to the peasants, rents were reduced, and debts waived. Soon, collective farming was introduced in the north of the country, and peasants worked according to the instructions they received from the government. Productivity was low.

In the south, landlordism was even strengthened by legislation.

After the country's reunification in 1976, attempts were made in the south to achieve collectivization which only had limited and temporary effects.

In 1981, a household management system was introduced. Land was reallocated to households for family farming. Inputs were delivered by the cooperative against an output quota. In practice, this meant that the peasants continued to depend upon the cooperative, especially as the latter managed the reallocation of land. This only changed in 1988, when secure tenure rights were introduced for each household, initially for 15 years.

In 1993, the rights of individual households were secured further: they obtained the right to mutually exchange, transfer, and lease land, and sell products freely, subject to their paying taxes and fees. The duration of land allocation was extended to 20 years for land on which annual crops were cultivated and 50 years for land under perennials. This was renewable in both cases if the land were used carefully. In case land was confiscated by the government for public purposes, a compensation was to be paid.

Under this new system, land ownership by the state was maintained while the households were given the right to use and manage their land according to their own decision. Thus, the goal was not to give up state control, but to change the system of control. The change was associated with sharp increases in output and productivity.

Some differences exist between north and south Vietnam in the system of land distribution. In the north, which has a longer history of collectivization, land was allocated according to family size and was to be adjusted periodically to demographic changes within the household. This brought about equity but also insecurity in tenure which had negative effects. In the south, where collectivization dated back to a few years only, it was easy to trace former owners. Therefore, land was returned to the previous owners, while safeguarding the ceiling of 3 - 5 ha of paddy land.

In 1993, a land survey was started to establish household rights and to provide the basis for land use rights certificates (LURC). Its purpose was also to facilitate a land market and reduce transfer costs. Traditionally, land transfers constituted a source of corruption for the bureaucracy which used those transfers to cash in rents, however, within traditional customs and moral norms. These should be compared with the costs of law enforcement which tend to be high, especially if there is no cadaster of any kind.

Many aspects of a land market such as mortgage, inheritance, sales, and lease still have to be regulated to reduce the power of arbitration committees. The issue of transferring agricultural land for non-farm use has not been tackled so far.

Pattern Former Socialistic Countries

After World War II, land and assets were collectivized, and state planning of agricultural production was introduced. This was successful, especially in the early years, in achieving equality, creating infrastructure, reaping economies of scale, and disseminating new technologies. However, production increases were low, and incentives for work diminished. As a consequence, communes and agricultural production planned by the state were discontinued. Although it remained government property, the land was distributed to the households for cultivation according to their own decision and guided by markets and prices. This change resulted in high increases in production and income. This, in turn, caused an upsurge of rural industries and, as the people were allowed to migrate freely, many of them abandoned farming to work in the new non-farm establishments located in the vicinity. However, the expected transfer of land to those who continued to practice agriculture did not take place. Industrial workers continued to cultivate their land as part-time farmers, thus keeping the land rights in their hands.