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