Market constraints, misallocation, and productivity in Vietnam agriculture. (July 2020)

• Record Type: Journal Article
• Authors: Ayerst, Stephen; Brandt, Loren; Restuccia, Diego
• Is Part Of: Food policy. Volume 94(2020)
• Publication Date: 2020-07
• Subjects: O11 -- O14 -- O4 -- E02 -- Q1; Agriculture -- Misallocation -- Vietnam -- Productivity -- Regions; Food supply -- Periodicals; Food security -- Periodicals; Food -- Quality -- Periodicals; Food Supply -- Periodicals; Alimentation -- Périodiques; Electronic journals; 338.1905
• DOI: 10.1016/j.foodpol.2020.101840
• Languages: English
• ISSNs: 0306-9192

Abstract

Highlights: Vietnam experienced rapid growth in output and productivity in agriculture between 2006 and 2016. Misallocation of resources between farmers remains a serious problem however. Reallocation did not keep up with the widening dispersion in productivity between farmers. Significant differences exist that reflect historically-rooted institutional factors. Reducing the misallocation remains an important future source of output and productivity gains. Abstract: We examine important changes in agriculture in Vietnam in the context of ongoing structural changes in the economy. We use a household-level panel dataset and a quantitative framework to document the extent and consequences of factor misallocation in agriculture during the period between 2006 and 2016. Despite rapid growth in agricultural productivity and a reallocation of factor inputs to more productive farmers, we find that misallocation across farmers remains high and increased during the period. Reallocation of factor inputs has not been strong enough to accommodate substantial changes in farm productivity over time. Our analysis also reveals important differences between the north and south regions.