Duong Thi Bao sits with her granddaughter by the roadside, looking out on the vanishing canal below. As with many of the waterways in rural Vinh Phuc province, about 50km north of Hanoi, the canal is at less than half its normal level thanks to an ongoing drought. For farmers such as Ms Bao, it means planting cheaper crops that are cutting into their already modest household incomes. 'It's the most serious I've seen here,' said Ms Bao, 70, whose family moved to the area in the 1960s. 'We don't even have enough water to use at home. It's so bad.' Officials say this is a tale being told throughout Vietnam. Rainfall is about 30 per cent below normal this year, following last year's poor total. Reservoirs are parched, rivers are at historic low levels, and crops are failing all over the country. It is already the worst drought to hit Vietnam since 1998, when as much as US$300 million in agricultural losses were recorded, and it is likely to get worse. Forecasts say below-average rainfall will continue until at least March. 'There is certainly a high risk of severe drought,' said Nguyen Dinh Ninh, a water official in Vietnam's Ministry of Agriculture and Rural Development. The drought is expected to have little effect on Ho Chi Minh City and Hanoi. But three-quarters of Vietnam's 82 million population still live in rural areas, where agriculture remains the main source of income. For them, the situation is grim. Water officials in Vinh Phuc say farming households have already seen their incomes drop by 20 to 35 per cent, a figure expected to increase there and elsewhere as long as the drought continues. Vietnam's continuing vulnerability to the elements was highlighted in a different way last month, when Typhoon Muifa lashed the central region with rain and winds, killing at least 40 people. But Mr Ninh said there was little in the way of a silver lining for those affected by drought. The storm flooded areas of the central coast, but brought little rain elsewhere. Vietnam averages six or seven major storms a year, Mr Ninh said, and Muifa was only the second of the year. In other central and southern areas, the annual monsoons ended much sooner than usual, he said. The government has already estimated $37 million in drought-related damage to farms and forests in the central and southern regions. There is no estimate yet for the effects on the north, or the prime rice-growing season, now under way. Mr Ninh said it is unlikely the damage will reach the highs of 1998. The government has spent US$3.6 million on irrigation works since then, he said. Meantime, water supply management has been improved, and farmers are being educated on growing crops that demand less water. But for the residents of Vinh Phuc, among other areas, there is little relief in sight. Children are playing in a field that is normally a lake. Household wells are empty. Locals can only switch to cheaper crops, tighten their belts, and pray for rain.