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Improving resource allocation and incomes in Vietnamese agriculture


  • Dewbre, Joshua


This paper uses data collected in an extensive survey of farm costs in the Dong Nai River Basin of Vietnam to estimate the parameters of production functions for rice, vegetables, and coffee. These estimates are then combined with price information to estimate marginal value products for irrigation, fertilizer, labor, and other farm inputs. Comparing marginal value products of the various inputs across crops and with factor prices suggests there may be potential for improving resource allocation and farm incomes. One novel contribution is the consideration of water and irrigation—a concern of considerable interest amidst rising water scarcity in the region. Most notably, the results indicate that fertilizer is the primary constraint to increased yields and farm income. Across all crops the marginal return to phosphorous, for example, ranges from 6,000–20,000 Vietnamese dong (VND) (US$1 = VND1, 800).Making similar comparisons with irrigation water suggests there is potential for improving resource allocation by diverting water from vegetables and coffee toward rice production. The marginal return to irrigation water for rice production is VND 2,500. For coffee and vegetables, marginal returns are negative. For vegetables, preliminary evidence suggests that all irrigation water is not created equal—groundwater and sprinkler irrigation systems have marginal physical products more than double that of traditional sources.

Suggested Citation

  • Dewbre, Joshua, 2010. "Improving resource allocation and incomes in Vietnamese agriculture," IFPRI discussion papers 984, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:984

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    References listed on IDEAS

    1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2008. "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya," American Economic Review, American Economic Association, vol. 98(2), pages 482-488, May.
    2. Martin Linde‐Rahr, 2005. "Differences in agricultural returns: an empirical test of efficiency in factor input allocation using Vietnamese data," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 35-45, January.
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    6. Schoengold, Karina & Zilberman, David, 2007. "The Economics of Water, Irrigation, and Development," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.),Handbook of Agricultural Economics, edition 1, volume 3, chapter 58, pages 2933-2977, Elsevier.
    7. Finger, Robert & Hediger, Werner, 2007. "The Application of Robust Regression to a Production Function Comparison – the Example of Swiss Corn," MPRA Paper 4740, University Library of Munich, Germany.
    8. Lichtenberg, Erik & Nguyen, Khanh Linh Thi, 2001. "Pesticide Productivity in Green Revolution Rice Production: A Case Study of Vietnam," 2001 Annual meeting, August 5-8, Chicago, IL 20757, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Mundlak, Yair, 2001. "Production and supply," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.),Handbook of Agricultural Economics, edition 1, volume 1, chapter 1, pages 3-85, Elsevier.
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    Dong Nai basin; farm input allocation; irrigation efficiency; translog production function; water allocation policy;

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