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Productivity, Net Returns and Efficiency: Land and Market Reform in Vietnamese Rice Production

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Author Info
Tom Kompas
Tuong Nhu Che
Ha Quang Nguyen
Hoa Thi Minh Nguyen

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Abstract

Extensive land and market reform in Vietnam has resulted in dramatic increases in rice output over the past thirty years. The land and market reforms in agriculture were pervasive, moving the system of rice production from commune-based public ownership and control to one with effective private property rights over land and Farm assets, competitive domestic markets and individual decision making over a wide range of agricultural activities. The effect of this reform period and beyond is detailed with measures of total factor productivity (TFP), terms of trade and net returns in rice production in Vietnam from 1985 to 2006. Results show that TFP rises considerably in the major rice growing areas (the Mekong and Red River Deltaareas) during the early years of reform, and beyond, but also that there is clear evidence of a productivity `slow-down' since 2000. The differences over time and by region speak directly to existing land use regulations and practices, suggesting calls for further land and market reform. To illustrate this, additional frontier and efficiency model estimates detail the effects of remaining institutional and policy constraints, including existing restrictions on land consolidation and conversion and poorly developed markets for land and capital. Estimates show that larger and less land-fragmented farms, farms in the major rice growing areas, and those farms that are better irrigated, have a greater proportion of capital per unit of cultivated land, a clear property right or land use certificate and access to agricultural extension services are more efficient.

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Paper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec09-02.

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Length: 38 pages
Date of creation: 2009
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Handle: RePEc:idc:wpaper:idec09-02

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Tom Kompas, 2004. "Market Reform, Productivity and Efficiency in Vietnamese Rice Production," Trade Working Papers 587, East Asian Bureau of Economic Research. [Downloadable!]
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  2. Klaus Deininger & Songqing Jin, 2008. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 67-101, 02. [Downloadable!] (restricted)
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  3. Battese, George E. & Corra, Greg. S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December. [Downloadable!]
  4. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July. [Downloadable!] (restricted)
  5. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August. [Downloadable!] (restricted)
  6. Schmidt, Peter & Knox Lovell, C. A., 1979. "Estimating technical and allocative inefficiency relative to stochastic production and cost frontiers," Journal of Econometrics, Elsevier, vol. 9(3), pages 343-366, February. [Downloadable!] (restricted)
  7. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 283-307, April. [Downloadable!] (restricted)
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