Credit, shocks and production efficiency of rice farmers in Vietnam

authored by
Thanh-Tung Nguyen, Trung Thanh Nguyen, Ulrike Grote
Abstract

Enhancing rice production efficiency in developing countries is important to improve the livelihoods of farmers and to ensure global food security for a growing population. Despite significant progress in recent decades, rice production is facing multiple challenges from climate change to the increasing competition for land, labor and capital from urbanization and industrialization. Given the fact that Vietnamese farmers often suffer from shocks and financial capital constraints, our paper aims to (i) investigate the impact of credit and shocks on rice production efficiency, and to (ii) examine the role of credit in mitigating the impact of shocks. Our findings show that weather shocks and land fragmentation are major sources of the inefficiency. Meanwhile, livestock, farm mechanization, and education are factors promoting rice production efficiency. Our results also show that access to credit plays a significant role in mitigating the negative impact of weather shocks. Our paper calls for more assistance and support to farmers in mitigating the severe effects of weather shocks, in particular via the promotion of rural credit markets. In addition, the encouragement of farm mechanization, land defragmentation, livestock farming, and the improvement of rural education should be given high priority to improve rice production efficiency.

Organisation(s)
Institute of Environmental Economics and World Trade
External Organisation(s)
University of Bonn
Type
Article
Journal
Economic Analysis and Policy
Volume
77
Pages
780-791
No. of pages
12
ISSN
0313-5926
Publication date
03.2023
Publication status
Published
Peer reviewed
Yes
ASJC Scopus subject areas
Economics and Econometrics, Economics, Econometrics and Finance (miscellaneous)
Sustainable Development Goals
SDG 2 - Zero Hunger, SDG 13 - Climate Action
Electronic version(s)
https://doi.org/10.1016/j.eap.2022.12.018 (Access: Closed)