Like 10 million other households, their yearly calendar is demarcated by the seasons of rice cultivation, from the planting of the seedlings through to harvest.

"We plant three crops a year," Minh said. "After each harvest, most of it is bought by traders who then take it to nearby mills for processing."

This hard manual labor brings the family a modest income of around $90 per month, well below the national average of $160. Until now, the money has been enough to send his two children to primary school and pay for the bare necessities -- and, he says, a happy life.

But times are changing.

Increased supply from markets such as Cambodia and Myanmar has seen the export price of Vietnamese rice drop to around $355 a ton, its lowest level since 2010. Meanwhile, government data shows that in the first two months of this year, Vietnamese rice exports were down 34% compared with the same period in 2014. Exporters are scrambling to find outlets for growing stockpiles. This is a big problem for Vietnam, the world's fourth-largest rice exporter, which earns approximately $4 billion a year from sending a third of its annual rice harvest abroad.

Even more problematic is the dramatic shift in consumer behavior at home. Since 2002, per capita rice consumption has dropped by 2kg each year to around 110kg, driven by rising incomes and changing attitudes toward nutrition.

Put simply, Vietnam's newly minted middle and affluent classes are eating less rice and more protein and dairy-rich food.

Generational shift

It is a trend that shows no sign of abating, according to Tu Tho, a Ho Chi Minh City-based entrepreneur who has studied organic food markets across Vietnam. "Go back 10 years and people would have expected to eat meat maybe once or twice a week," she said. "Now parents are teaching their kids to eat meat every day, particularly beef."

The shift has caught policymakers off guard and left the country's fragmented livestock sector unable to keep up with demand. The Vietnam Animal Feed Association estimates the country imported 200,000 head of cattle last year to supplement the 45,000 reared domestically.

Vietnam's Communist government has promoted the shift from rice cultivation to livestock and animal-feed crops, such as corn, cassava and soybeans, over the last two years by loosening rules that dictate what is grown where. But 3.8 million hectares of farmland are still devoted to rice, while only 45,000 hectares are designated for grazing cattle.

"The land laws are still quite inflexible," said Nguyen Do Anh Tuan, vice director of the country's Institute of Policy and Strategy for Agriculture and Rural Development. "The government needs to zone more land to crops other than rice."

A highly fragmented supply chain dominated by small-scale production and a lack of farming collectives have made it difficult to achieve the economies of scale attractive to banks and investors. Even though 20% of Vietnam's gross domestic product comes from agriculture, it attracts only 6% of overall investment. The sector accounts for a mere 1.5% of total foreign direct investment in the country, according to the agriculture ministry.

Most farmers are ill-informed about the need to change, in part because of poor collaboration with businesses further down the supply chain that could provide better insight into consumer demand.

According to Vo Tong Xuan, a former trustee of the International Rice Research Institute who won the Ramon Magsaysay Award for his work on Vietnamese agricultural development, an overreliance on middlemen to buy harvests and poor collaboration with food distributors have resulted in overproduction, leaving most farmers exposed to the crash in global rice prices. "Vietnam needs entrepreneurs who can establish a value chain that links farmer groups directly with manufacturing companies to produce quality branded products," he said.

The environment poses another challenge. The shift to cattle farming requires vast swaths of grassland and abundant supplies of water, both of which are becoming increasingly scarce. The Mekong Delta, Vietnam's agricultural heartland, is facing water shortages caused by severe drought and dam construction upstream in Laos and China.

The reliance on imports for many food items is only likely to deepen when foreign goods flood the market after numerous new trade deals come into effect. These include the Trans-Pacific Partnership, which will boost the supply of competitively priced U.S., Japanese and Australian beef that is already popular with local consumers. In Ho Chi Minh City supermarkets, Australian boxed beef sells for as little as $3 per kilogram, compared with around $3.50-$3.70 for Vietnamese beef. Higher-grade Australian beef from live imports costs around $15 per kilogram.

The TPP could have a devastating impact on the country's livestock industry, according to Vietnam Livestock Association Chairman Nguyen Dang Vang. This is because local farmers will struggle to compete with foreign rivals, hampered by outdated technology, supply chain inefficiencies and lower quality standards.

"The trend of importing meat and livestock products will continue in the future, especially after Vietnam has joined the TPP,'' Vang told Tuoi Tre News. "Our livestock breeders offer poor quality produce, and small-scale livestock farms account for up to 60% of the sector. The government needs to have special policies in place to assist the industry."

Farmers' attachment to rice worries Vietnam's policymakers, who fear a growing reliance on food imports could expose consumers to global market fluctuations.

Image problems

But even if farmers diversified their crops, Vietnamese consumers might be skeptical about quality and safety, according to Tu Tho. Local produce suffers from an image problem due to a reliance on pesticides and growth hormones, though farmers are trying to develop their own quality standards to address the issue.

"It's almost impossible to find local meat that has been 100% grass-fed or corn-fed - almost all the farmers use hormones - so most high-end restaurants will use beef from New Zealand or Australia,'' she said.

Some local companies are beginning to turn their attention to cattle farming. Steel group Hoa Phat recently announced it will spend around 300 billion dong ($13.8 million) on cattle breeding and animal feed production in Hung Yen Province, with products to hit the shelves midyear. Real estate company Hoang Anh Gia Lai group has also shifted its focus to agriculture, pledging $275 million to boost its Central Highlands herd to more than 200,000 cattle from 30,000.

Vietnam's farmers seem to be shifting toward market demand and embracing new technologies, said Joost van Elzakker, general manager for seed producer East-West Seed Vietnam. "Vietnamese farmers are some of the most adaptable farmers we've worked with across Asia."

By David Mann - Nikkei Asian Review - April 23, 2015