Production Capacity and Supply Response in Vietnam's Agriculture: An Application of an Economic Research Service Production-Distribution Model for Vietnam

Productive capacity of South Vietnam's agriculture was examined in terms of the quantity, and mix of agricultural commodities needed to maximize national agricultural income. The analysis started with the existing resource base and was extended to other plausible resource use situations, with emphasis on expanding the land resource. A linear programming model was tailored to the particular conditions and problems existing in South Vietnam. The model specifies resources and defines production relationships among resources, enterprises, and regions. It also explicitly reflects processing, marketing, transportation, and consumption phenomena and relationships. For two of the major resource bases, various assumptions relative to commodity prices and other variables were altered to determine the likely impact on income, supply mix, investment requirements, trade balances, and other phenomena. Various program alternatives related to South Vietnam's agricultural and economic development are implicitly suggested by the analysis. Information developed is being used by the Government of Vietnam in its 5-Year Economic Development Plan.