The effect of agricultural commercialization on food security

There has been relatively little research that assesses the direct impact of commercialization on food security in the past couple of decades. Yet, agricultural commercialization remains widely pursued in development projects. This is especially the case in developing countries which turn from a central planned economy towards a more market-based economy such as Vietnam in the 1990s and Myanmar nowadays. In the 1980s Vietnam witnessed rapid declines in poverty and malnutrition shortly after implementing major economic reforms. These reforms were targeted at smallholders to increase their income and to reduce poverty through agricultural commercialization. In this thesis I examine the effect of agricultural commercialization on the food security status of crop producing households in Vietnam between 1993 and 1998. I distinguish between indicators of commercialization of input markets (seeds, fertilizer, etc.) and of commercialization of output markets (crops), as I expect that these have distinct impacts. Using the panel data from the Vietnam Living Standards Survey (VLSS) for 1992-1993 and 1997-1998, I conducted pooled OLS, fixed effects (FE), and random effects (RE) analyses. With Instrumental Variables (IV) techniques, I controlled for endogeneity for the OLS and FE models. The results show that the effect of commercialization on food security strongly depends upon the choice of the commercialization indicator and the region or province in Vietnam. In general, I found significant positive effects of the cash crop production share and crop output market participation on food variety in the south of Vietnam, and a significant negative effect of crop output market participation on caloric intake.