This failure of collectivization and poor agricultural performance were attributed to four major factors. First and foremost was farmers’ disincentives through the collective agriculture system, which tied output to brigades rather than to individuals, resulting in low prices for farm output produced in excess of the quota (Kerkvliet 1995; Nguyen 1995). Second, state trading agencies did not have enough intermediate input and consumption goods to exchange with peasant households. Facing the unfair terms of trade, peasant households were discouraged from participating in an exchange with state trading agencies. Third, a lack of trained managers led to cooperative inefficiencies. Cooperative members paid little attention to cooperative works, and focused more on the 5 percent of land that they could use as personal plots to sell surpluses in the private markets6
Pre-Reform Period 1981–1988: Making Incentives to Increase Efficiency of Collective Agriculture (Nguyen 1995; Kerkvliet 1995; Jamal and Jansen 1998). Finally, the macroeconomic structure was imbalanced in a way that the state highly favored the development of state-owned enterprises (SOEs) in heavy industries while neglecting the development of light industries, particularly agriculture. Major shares of state investments went to heavy industries while those that went to agriculture were reduced to a bare minimum (Fforde and de Vylder 1996). Taxes imposed on agriculture were relatively higher than those on industry.