Food supply systems in transition: the case of Vietnam

Response parameters were estimated from time-series cross section data set from 1976 to 1992 using Mundlak's indigenous technology and sequential decision model. Total area of the four food crops, rice, corn, cassava, and sweet potato respond positively to the expected own prices. The immediate response to changes in crop revenues is higher for total area than for irrigated area. In general, introduction of the reforms reduces investment on total food crop area except for the Mekong Delta where irrigated rice area was still expanded moderately through cropping intensity. Elasticity of rice area share with respect to its own expected revenue is almost negligible in northern and southern regions. Elasticities of potato and cassava area share with respect to own expected revenues are higher than those of rice. Procurement policy and collectivization of rice land during the period 1976-80 resulted in large increase of cassava and potato during this period but then declined afterwards when the reform started. Rice yield estimated elasticities with respect to crop's own price and low in both regions, ranging from 0.02 to 0.09. Yields are more sensitive to fertilizer price than crop price. More mobility of labor force and job opportunity created by the recent policy reforms in agriculture resulted in positive estimated coefficients of crop yield response with respect to labor price. Remarkable impact of policy reforms is observed on crop yield and input demand. Liberalization of agricultural production induces farmers' private investment and higher yield. Increase in total planted area and cropping intensity accompanying with decline in rice area in the three northern regions indicates that crop diversification is taking place. This diversification is induced by market price and by autonomous investment decision of farmers which is made possible by the liberalization policy