IDEAS home Printed from https://ideas.repec.org/p/ags/nzar13/160264.html
   My bibliography  Save this paper

Efficiency And Equity Impacts Of The Rental Market For Cropland In Vietnam And Sources Of Transaction Costs Impeding The Market

Author

Listed:
  • Huy, Hoang
  • Lyne, Michael
  • Ratna, Nazmun
  • Nuthall, Peter

Abstract

This research investigates the efficiency and equity impacts of the cropland rental market in rural Vietnam and attempts to identify the determinants and importance of transaction costs impeding this market. A generalised ordered logit model with shifting thresholds accounting for effects of transaction costs associated with market participation was specified and estimated using pooled data extracted from the Vietnam Household Living Standards Surveys of 2004 and 2008. The findings show that the cropland rental market reduced imbalances in factor endowments, transferring cropland to those households more willing and able to farm. Equity advantages were also revealed as cropland transferred from relatively land-rich to relatively land-poor households, allowing young farmers to ‘scale the agricultural ladder’. However, the market is constrained by transaction costs that effect lessors and lessees differently. It is recommended that the Vietnamese government should complete its land registration programme and consider relaxing restrictions on the use of wetlands to grow crops other than rice. It should also focus on improving access to all-weather roads as this encourages participation on both sides of the rental market whereas better access to communications infrastructure was found to promote only the supply side.

Suggested Citation

  • Huy, Hoang & Lyne, Michael & Ratna, Nazmun & Nuthall, Peter, 2013. "Efficiency And Equity Impacts Of The Rental Market For Cropland In Vietnam And Sources Of Transaction Costs Impeding The Market," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand 160264, New Zealand Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:nzar13:160264
    DOI: 10.22004/ag.econ.160264
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/160264/files/Huy%20et%20al%202013%20final.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.160264?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. de Janvry, Alain & Gordillo, Gustavo & Sadoulet, Elisabeth & Platteau, Jean-Philippe (ed.), 2001. "Access to Land, Rural Poverty, and Public Action," OUP Catalogue, Oxford University Press, number 9780199242177.
    2. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.
    3. Vranken, Liesbet & Swinnen, Johan, 2006. "Land rental markets in transition: Theory and evidence from Hungary," World Development, Elsevier, vol. 34(3), pages 481-500, March.
    4. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    5. Van Hung, Pham & MacAulay, T. Gordon & Marsh, Sally P., 2007. "The economics of land fragmentation in the north of Vietnam," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 1-17.
    6. Thomas Markussen & Finn Tarp & Katleen Van den Broeck, 2009. "The Forgotten Property Rights: Restrictions on Land Use in Vietnam," Discussion Papers 09-21, University of Copenhagen. Department of Economics.
    7. Ravallion, Martin & Van der Walle, Dominique, 2003. "Land allocation in Vietnam's agrarian transition," Policy Research Working Paper Series 2951, The World Bank.
    8. Timothy Crookes & Michael Lyne, 2003. "Efficiency and equity gains in the rental market for arable land: observations from a communal area of KwaZulu-Natal, South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 20(5), pages 579-593.
    9. Tom Kompas, 2004. "Market reform, productivity and efficiency in Vietnamese rice production," International and Development Economics Working Papers idec04-4, International and Development Economics.
    10. Deininger, Klaus & Jin, Songqing, 2005. "The potential of land rental markets in the process of economic development: Evidence from China," Journal of Development Economics, Elsevier, vol. 78(1), pages 241-270, October.
    11. Lyne, Michael & Roth, Michael & Troutt, Betsy, 1997. "Land Rental Markets in Sub-Saharan Africa: Institutional Change in Customary Tenure," 1997 Occasional Paper Series No. 7 198046, International Association of Agricultural Economists.
    12. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772, Elsevier.
    13. 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, February.
    14. Kille, G. S. & Lyne, M. C., 1993. "Investment On Freehold And Trust Farms: Theory With Some Evidence From Kwazulu," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 32(3), September.
    15. World Bank, 2009. "World Development Indicators 2009," World Bank Publications - Books, The World Bank Group, number 4367, December.
    16. Pham Van Hung & T. Gordon MacAulay & Sally P. Marsh, 2007. "The economics of land fragmentation in the north of Vietnam ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 195-211, June.
    17. Emmanuel Skoufias, 1995. "Household Resources, Transaction Costs, and Adjustment through Land Tenancy," Land Economics, University of Wisconsin Press, vol. 71(1), pages 42-56.
    18. Rios, Ana R. & Shively, Gerald E., 2005. "Farm size and nonparametric efficiency measurements for coffee farms in Vietnam," 2005 Annual meeting, July 24-27, Providence, RI 19159, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LP, vol. 6(1), pages 58-82, March.
    20. Stephan J. Goetz, 1992. "A Selectivity Model of Household Food Marketing Behavior in Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 444-452.
    21. Stein Holden & Klaus Deininger & Hosaena Ghebru, 2011. "Tenure Insecurity, Gender, Low-cost Land Certification and Land Rental Market Participation in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 47(1), pages 31-47.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tan, Shu-hao & Zhang, Ru-xin & Tan, Zhong-chun, 2018. "Grassland rental markets and herder technical efficiency: ability effect or resource equilibration effect?," Land Use Policy, Elsevier, vol. 77(C), pages 135-142.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huy, Hoang Trieu & Nguyen, Trung Thanh, 2019. "Cropland rental market and farm technical efficiency in rural Vietnam," Land Use Policy, Elsevier, vol. 81(C), pages 408-423.
    2. Deininger, Klaus & Jin, Songqing, 2007. "Land rental markets in the process of rural structural transformation : productivity and equity impacts in China," Policy Research Working Paper Series 4454, The World Bank.
    3. Ma, Xianlei & Heerink, Nico & van Ierland, Ekko & Lang, Hairu & Shi, Xiaoping, 2020. "Decisions by Chinese households regarding renting in arable land—The impact of tenure security perceptions and trust," China Economic Review, Elsevier, vol. 60(C).
    4. Deininger, Klaus & Savastano, Sara & Carletto, Calogero, 2012. "Land Fragmentation, Cropland Abandonment, and Land Market Operation in Albania," World Development, Elsevier, vol. 40(10), pages 2108-2122.
    5. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.
    6. Oliver Schulte & Trung Thanh Nguyen & Ulrike Grote, 2022. "The Effect of Renting in Cropland on Livelihood Choices and Agricultural Commercialization: A Case Study from Rural Vietnam," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2878-2898, December.
    7. Qian, Chen & Li, Fan & Antonides, Gerrit & Heerink, Nico & Ma, Xianlei & Li, Xiande, 2020. "Effect of personality traits on smallholders’ land renting behavior: Theory and evidence from the North China Plain," China Economic Review, Elsevier, vol. 62(C).
    8. Mbudzya, Joseph Jabu, 2017. "Effect Of Agricultural Land Rental Market Participation On Agricultural Income Of Small Scale Farmers In Kwale County, Kenya," Research Theses 276436, Collaborative Masters Program in Agricultural and Applied Economics.
    9. Ayala-Cantu, Luciano & Morando, Bruno, 2020. "Rental markets, gender, and land certificates: Evidence from Vietnam," Food Policy, Elsevier, vol. 94(C).
    10. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57521, University Library of Munich, Germany.
    11. Derek G. Stacey, 2011. "Tenure Insecurity, Adverse Selection, And Liquidity In Rural Land Markets," Working Paper 1269, Economics Department, Queen's University.
    12. Shaikh M. S. U. Eskander & Edward B. Barbier, 2023. "Adaptation to Natural Disasters through the Agricultural Land Rental Market: Evidence from Bangladesh," Land Economics, University of Wisconsin Press, vol. 99(1), pages 141-160.
    13. Klaus Deininger & Daniel Monchuk & Hari K Nagarajan & Sudhir K Singh, 2017. "Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 53(1), pages 82-98, January.
    14. Klaus Deininger & Daniel Ayalew Ali & Tekie Alemu, 2008. "Assessing the Functioning of Land Rental Markets in Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(1), pages 67-100, October.
    15. Li, Xinyi & Ito, Junichi, 2021. "An empirical study of land rental development in rural Gansu, China: The role of agricultural cooperatives and transaction costs," Land Use Policy, Elsevier, vol. 109(C).
    16. Tu, Vo Hong & Kopp, Steven W. & Trang, Nguyen Thuy & Hong, Nguyen Bich & Yabe, Mitsuyasu, 2021. "Land accumulation: An option for improving technical and environmental efficiencies of rice production in the Vietnamese Mekong Delta," Land Use Policy, Elsevier, vol. 108(C).
    17. Muraoka, Rie & Jin, Songqing & Jayne, T.S., 2018. "Land access, land rental and food security: Evidence from Kenya," Land Use Policy, Elsevier, vol. 70(C), pages 611-622.
    18. Che, Yi, 2009. "Mismatch: land reallocations, recovery land rental and land rental market development in rural China," MPRA Paper 39794, University Library of Munich, Germany.
    19. Nguyen, Huy Quynh & Warr, Peter, 2020. "Land consolidation as technical change: Economic impacts in rural Vietnam," World Development, Elsevier, vol. 127(C).
    20. Cheng, Wenli & Xu, Yuyun & Zhou, Nan & He, Zaizhong & Zhang, Longyao, 2019. "How did land titling affect China’s rural land rental market? Size, composition and efficiency," Land Use Policy, Elsevier, vol. 82(C), pages 609-619.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:nzar13:160264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/nzareea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.