TY - JOUR

T1 - Scale and scope economies in small household rice farming in Vietnam

AU - HOANG, Viet Ngu

AU - NGUYEN, Trung Thanh

AU - WILSON, Clevo

AU - HO, Thong Quoc

AU - KHANAL, Uttam

N1 - Funding Information: We thank the farmers in Vietnam for their support and cooperation. Support from the University of Economics Ho Chi Minh City, the German Research Foundation (DFG, funding No. DFG-FOR 756/1&2) and our colleagues at the Leibniz University Hannover for data collection within the research project “Thailand–Vietnam Socioeconomic Panel (www.tvsep.de)” is highly appreciated. The constructive comments and suggestions from two anonymous reviewers and an editor are greatly acknowledged. The publication of this article was funded by the Open Access Fund of Leibniz University Hannover, Germany.

PY - 2021/12

Y1 - 2021/12

N2 - The Vietnamese agricultural sector has experienced a dramatic structural change based on increased specialization in rice cultivation. However, small-scale rice-farmers have continued to grow multiple crops, especially in less developed provinces. While the literature advocates crop diversification for reasons of both economic and ecological sustainability, there lacks empirical evidence as to whether crop diversification brings efficiency and productivity gains to small farms. The present study is the first applications of the input-oriented stochastic distance function approach in estimating scale and scope economies using data of multi-crop farming households in Vietnam. We find strong evidence of product-specific economies of scale. Scope economies are also present for rice, vegetable, and other annual crop production. This suggests that crop diversification enhances efficiency and productivity. However, there still exists significant technical inefficiency in crop production, indicating opportunities to expand farm output at the existing level of inputs and technologies. More specifically, our empirical results indicate that it is desirable to expand vegetable and other annual crop production in mountainous areas while rice cultivation can be further expanded in delta and coastal regions.

AB - The Vietnamese agricultural sector has experienced a dramatic structural change based on increased specialization in rice cultivation. However, small-scale rice-farmers have continued to grow multiple crops, especially in less developed provinces. While the literature advocates crop diversification for reasons of both economic and ecological sustainability, there lacks empirical evidence as to whether crop diversification brings efficiency and productivity gains to small farms. The present study is the first applications of the input-oriented stochastic distance function approach in estimating scale and scope economies using data of multi-crop farming households in Vietnam. We find strong evidence of product-specific economies of scale. Scope economies are also present for rice, vegetable, and other annual crop production. This suggests that crop diversification enhances efficiency and productivity. However, there still exists significant technical inefficiency in crop production, indicating opportunities to expand farm output at the existing level of inputs and technologies. More specifically, our empirical results indicate that it is desirable to expand vegetable and other annual crop production in mountainous areas while rice cultivation can be further expanded in delta and coastal regions.

KW - economies of scale

KW - economies of scope

KW - input distance function

KW - product-specific

KW - stochastic frontier

UR - http://www.scopus.com/inward/record.url?scp=85117362737&partnerID=8YFLogxK

U2 - 10.1016/S2095-3119(21)63612-2

DO - 10.1016/S2095-3119(21)63612-2

M3 - Article

AN - SCOPUS:85117362737

VL - 20

SP - 3339

EP - 3351

JO - Journal of integrative agriculture

JF - Journal of integrative agriculture

SN - 2095-3119

IS - 12

ER -