Crop diversification, economic performance and household’s behaviours Evidence from Vietnam

This study examines economic performances and household’s behaviours in multiple crops farming in Vietnam. Smallholder farming systems in Vietnam is being transformed by integration between cash cropping and main food cropping operations. This transformation into diversified farming systems can affect the economies of scope, technical efficiency, and performances of farms. By using the approach of input distance function, we find the first evidence of both scale and scope economies that have important economic performance implications. There is an existence of substantial technical inefficiency in multiple crops farming, which implies that there may be opportunities to expand crop outputs by eliminating technical inefficiency. Enhancing education and further land reforms are main technical efficiency shifters. We also find the complementarity evidence between family labour and other inputs, except hired labour. Thus, policies that lead to more incentives to invest in crop faming activities should focus on the reduction of input costs.