Assessing the Impact of Rice Policy Changes in Viet Nam and the Contribution of Policy Research

Analysis of the economic impact of IFPRI research on the rice policy and marketing in Vietnam between 1995-1997.The research is described, and the conclusions and recommendations that emerged are discussed in the context of the decisionmaking processes in Viet Nam. The role of IFPRI's publication and communication activities in association with the project in informing the policy environment are discussed. It is clear these played a crucial role in building consensus among the disparate groups involved in the policy process. This aspect was widely acknowledged by partners and stakeholders as having high value.From extensive interviews the author describes the perceptions of partners and stakeholders of the influence of the outcomes of the IFPRI project. They show that the research was regarded as being of high quality, independent, rigorous, and timely. A strong foundation of primary and secondary data gathering and analysis from Viet Nam gave the modeling work on policy options a high degree of credibility among key policymakers. Linking the spatial equilibrium model with income distribution analysis based on national household surveys allowed IFPRI to satisfy policymakers that relaxing rice export quotas and internal trade restrictions on rice would not adversely impact on regional disparities and food security and would have beneficial effects on farm prices and poverty. These were major concerns of policymakers prior to the project. The research on these and other policy options gave a degree of confidence to policymakers that relaxing the controls would be in Viet Nam's national interest. They made these decisions earlier than would have been the case without the IFPRI research.A framework for the evaluation of policy research and advice is described, which explicitly recognizes the possibility of alternative suppliers of these two components to IFPRI. The framework is used to assess the impact of IFPRI's research with Viet Nam on alternative internal and external trade policies for rice in that country.The policy assessment framework is used to measure the economic impact of the policy changes, and the contribution of IFPRI's work with Viet Nam on the policies from 1995–97. The relaxation of rice export quotas and internal restrictions on rice trade made by the government of Viet Nam in 1995–97 are estimated to have had a present (1995) value to Viet Nam of $61 million using a 5 percent discount rate. If continued to 2000, this will rise to $222 million and to $966 million by 2020. For an incremental investment of less than US$1 million, a conservative estimate of the benefit to Viet Nam of the IFPRI contribution to the policy changes effected in Viet Nam from the reduction in the policy implementation lag indicates a present value in 1995 terms of US$45 million. This represents a benefit-cost ratio of 56. A more optimistic assessment is that the present value is US$91 million with a benefit-cost ratio of 114. In addition to the welfare gainsto Viet Nam, there were sizeable gains to the rest of the world from IFPRI's contribution. Inclusion of these benefits increases present value and benefit-cost estimates by 34 to 84 percent. Around 40 percent of the contribution of IFPRI is estimated to have accrued to the rest of the world as Viet Nam is now a major player in world rice trade. [author]