Thesis Abstract of AGS Students

Economic analysis of rice production in red river delta of Viet Nam

Nguyen Trong Dac (1996)

The Red River Delta is the second largest rice producing area in Viet Nam after the Mekong Delta. Two season rice crops, Spring and Autumn, are produced annually, and cover an area of over 500,000 ha in each season.

The study was to compare rice production technologies in two seasons. In the Spring rice crop, a modified modern cultivation technique (MMCT) was compared with recent cultivation technique (RCT) on modern high yielding rice varieties (MHYV). For the Autumn rice crop, the tradi-tional high quality rice variety (THQV) was compared to modern high yielding variety (MHYV) under RCT.

The study employed budgeting analysis to examine profitability, economic efficiency of input utilization and used seemingly unrelated regression estimator (SURE) to estimate the elasticities of variable input demands and output supplies for rice production.

The findings showed that, in Spring rice crop, rice produced by MMCT received higher return to labor and to material than that by RCT. In the Autumn rice crop, MHYV produced in all areas received return to labor ratio of 3.28 and to material of 3.27, while, THQV produced only in Hai Phong subdistrict had a return to labor ratio of 8.15 and to material of 6.56. Similarly, for the Spring rice crop, MMCT produced a higher net return (119,400 Dong per sao) than that of RCT (98,900 Dong per sao). For the Autumn rice crop, MHYV produced a net return of 105,500 Dong per sao. While in Hai Phong, THQV produced a net return of 310,100 Dong per sao.

The estimation revealed that own-price elasticities of demands for labor and fertilizer were negative as expected. The cross-price elasticities of demands showed that there were complementary among inputs for rice production in the region, except the substitution of labor and fertilizer inputs for MHYV in the Autumn rice crop. Output supply elasticities with respect to rice prices, for all areas, were 0.42 and 0.67 for RCT and MMCT in the Spring rice crop, respectively, and 0.48 for MHYV in the Autumn rice crop. For THQV in the Autumn rice crop in Hai Phong subdistrict the output supply elasticity with respect to rice price was 0.13.

The rice price subsidy policy could increase the highest total rice output as well as farmers' income, but it would provide the largest cost to the government. Based on the present national economy, the government fertilizer-price subsidy in the region would be more appropriate to increase rice production and consequently to raise the income of the rural households, because the net impact of the policy is positive for the whole economy.

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